But, I didn’t write that until just now. Following is the tirade I went into with my good friend never interrupting. I am sorry that I wrote it as a reply to his comment. But after reviewing it again, I have decided that it is pretty good stuff. So, now, with only minor edits, is my tirade presented as a scholarly review. If I am mad as a hatter, you will know early. If I am brilliant I doubt that will show up as well.

The Big Short is very accurate in its description of the unleashing of greed and crime by Wall Street's upper tier with the repeal of the 1934 Glass Steagall Act. But it misleads the media as to what a bad loan is. I have never run into a Bad Borrower. The ARM loans that I think represent a large majority of all loans between 2000 and 2008 were calendar ARMS (my term. I don't know what else to call them) where the Borrower qualifies at $1,000 per month, but in 3 years the interest jumps and the payment goes to $1,900 per month. WTF? 

The Borrower who knows nothing about mortgages (nor did the realtor. nor did the Title Company Escrow Agent "Closer") was told that yes the payment would go up in 3 years, but home value always goes up, so that when the interest rate jumped the Borrowers could just refinance and get a 30 year fixed loan. 

Problem solved. 

That is what the Christian Bale character in The Big Short was looking at in 2005. What he could see is that there were millions of loans that were going to double or more when the calendar ARMs all jumped at the same time in 2007. The crisis was ready to burn and when the higher than the qualification of income mortgage payments all began to jump to unaffordable payments it was metaphorically, the adding of gasoline to the fire.

You see, what I am saying is that it was the loans themselves that were bad and illogically criminal. The unwitting Borrowers were grossly misinformed. I sold the last 10 homes that my wife and I built to people who had been foreclosed a year or two before we began listing them as "Rent to Own" (Contract for Deed) on Craig's List. I never paid a real estate commission on the Buyer's side and I was the realtor on the Seller's side. 

In 2004 I owned the mortgage company that arranged my $390,000 loan. It was an ARM tied to the ten-year treasury bond. My interest rate went down every year. 

I had put $100,000 down on my home loan. Then with nothing but little coupons in the mail as proof of who my Lender was, I paid GMAC Mortgage and their criminal Robo-Signing Attorneys South and associates from Overland Park another $200,000 over the next ten years. 

Then they got me. I had been a real estate broker and a mortgage broker for many years and I had brokered the loan on my house with my mortgage company and I was still not connecting the dots. If they can fool me with all of my experience. What moron would think that the postman, car manufacturing plant worker, Auto Parts Salesman, Hair Salon Stylist or anyone else should have understood their loan? 

Although your loan has been involved in several, Nobody has ever described a credit default swap definitively. Most scholars don’t even try.  The Buyers in my first reply were getting loans with ratios as high as 103%. The Servicer that foreclosed on them had no money in the game (no consideration) and now they are foreclosing on Servicing Lists which explains why they never (yes I mean 100% of all loans) had the essential instrument The Promissory Note to prove their standing to foreclose. The Borrowers never had a chance for success. Anyone that thinks the situation has gotten better now with our brand new Frank-Dodd regulation is deaf, dumb and blind.

I have been talking to Title Insurance Brokers all over the country. They know that they were and still are insuring fraud, but not even one-tenth of one percent Borrowers who are foreclosed (300 per month in Jackson County Missouri for the last 5 years) can even find out if they have been a victim of crime. So they don’t fight back. 

So, hopefully, when all Americans find out that they can go back 30 years or more and file a lawsuit against any party that did not disclose the truth, the Title insurers actuarial tables are going to be way off. 

When everyone figures out what I now know, and that is that you can challenge the standing of the foreclosing party at any time (Article III of the Constitution) with no statute of limitations tolling. The longest court ruling citation that I have found is a judgment voided after 31 years because the Judge made the ruling without subject matter jurisdiction. 

The next big crisis will be suing the title insurers and suing the judge who allowed the foreclosure because judges do have immunity from lawsuits in almost every situation, but not if they rule on a case with no court “subject matter” jurisdiction. The claimant foreclosing party was not properly before the court. 

He, or she, were merely citizens when they began acting outside the cloak of immunity of the court. The crime they committed was "interference with interstate commerce". It's the new wave in my industry.

Then the “ta dum” (quoting Napolean). The title companies insured the original foreclosing party's standing. They will be in the way of a 6 million family tsunami of anger and I am only talking about the Borrowers who have been foreclosed on in a very, very large Ponzi Scheme. 

What about all the homes with payments that were paid every month right on time and then paid off to the wrong party

They are right now, at this moment subject to duplicative claims and are victims of conversion. The exposure (the size of which no one really knows) is most often estimated at 22 Trillion Dollars (USD). 

That is more than all of Wall Street and all of the title companies are worth collectively. The redistribution of wealth (in my crazed opinion?) will reverse.  It can only have a good ending if you are part of the 1 percent.  The money still exists.  All that needs to be done is to undistribute (sic) the earlier redistributed wealth.  Bring it back from the Caymans on a barge fleet.  $ame amount of money, but more people should be using it.  This has all been done with felony piled on felony anyway.  Just set it all straight.

The Big Short can be viewed on most premium channels.  But, viewing the Big Short is myopic and if you watch it, you really need to also watch "99 Homes" on Netflix DVD (Laura Dern and some other known stars). It tells the story more from the Borrowers' perspective. It balances the Big Short. To complete your understanding in a fundamental way on “Netflix streaming” you can now watch "Enron- the smartest guys in the room". It filled in the gaps about just how long ago the play money inventions of financial instruments out of thin air became vogue.

I monitor the title company closings and recordings at the courthouse very closely. I have for 5 years. I have just started seeing 97% and 103% of loans being tossed around. They are at it again. They will not stop until 1000 of them go to jail. (between 1988 and 1992 1000 bankers went to jail following the Savings and Loan Crisis”). The Savings and Loan failure crisis, which was ignited by the 1986 law act which went into effect on a single day, instead of doing it in stages. 

I lost 2 million dollars of equity in Promissory Notes that I held in what I thought was a Hartford Connecticut Loan institution. My loans were seized by the federal agency called the Resolution Trust in Benjamin Franklin Savings in Houston. I had never done business with Benjamin Franklin Savings in Houston Texas. 

My lender had been a company called Security Capital Credit based in Glastonbury, a suburb of Hartford, Connecticut. I was told that a Life Insurance Company was my lender. No one ever disclosed that they had bundled my collateral and sold it. They stopped answering their phones when they had no more stories to tell me. The phones were disconnected the next week. 

Then, 15 years later the Clinton Administration with a Republican congress repealed the Glass Steagall Act which let Stockbrokers and Bankers operate in the same company (which supposedly is what caused the same problem in 1929. You know.  It was called the Great Depression. 

This Act had prevented the same type of crisis since 1934. For more than eighty years it kept our financial system safe. We elected the sociopathic fools that repealed it. Next time let's really participate in our elections. We don't work for the government, the government works for us. But, we have gotten to be lazy lame-ass Americans lately and we are letting loose of the reins.

The Federal Reserve, or Fed, (which is not part of the US government? Who knew?) purchased 80 billion in securities per month for something like four years and called it quantitative easing (look up those two words) and it was supposed to help the US economy. But, half of those purchases were of what the Fed had earlier called toxic securities. They paid the big banks par. PAR? That is the price that the bond investors paid for these securities just after they were printed and before anyone yet knew that they were bad loans.

Did you read the writing on the screen at the end of the Big Short?

In 2015 five of the biggest "banks" began selling securities through an instrument called a "bespoke tranche opportunity". What the hell is that?  According to Bloomberg News, it is another name for a "CDO" or Collateralized Debt Obligation (which is another name for mortgage-backed security).

My opinion? We ain't seen nothing yet.

Sorry to come back with such a long blowhard string of what probably makes you question my sanity. But, I knew you would understand it. I don't get an opportunity to talk to very many people who don't keep looking at their watches. 

Don't go investing in Wells Fargo no matter what Warren Buffet says. I'm coming to St. Louis in a week or two. Do you feel safe having a visit with me if you are around?

And oh yeah, I hope my good friends that you are well.


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