subject: Public Outrage Over Bank's Fraudulent Acts in Foreclosures [print this page] Public Outrage Over Bank's Fraudulent Acts in Foreclosures
More north Americans lost their houses to foreclosure in Aug than in any other month on record, as banks foreclosed 25 p.c more homes that month than in Aug of last year. Yet the more foreclosures they perform, the more we are exposing obvious acts of crime in their behaviour.
This all started in 1999 when the Glass Steagall Act was overturned. The aim of the Glass-Steagall Act was to forbid the banks from making dangerous investments with depositors' money. This Act came into being in 1933 after banks had acted recklessly and invested depositors' cash in the stock market. When the market crashed, money was gone and runs on the banks were forthcoming. Eventually the US regime provided FDIC Insurance. In 1999, the Gramm-Leach-Bailey Act eliminated the restrictions of the GSA and banks were permitted to take risks again.
Immediately banks began to securitize loans and sell them on the secondary market for larger profit. This is how it would work : If Joe Public got a $150,000 loan on a home at a 6% rate, the banks would profit $173,000 over thirty years. The banks would immediately take the $173,000 and sell it on the secondary market. The banks began easing their lending standards and more houses were being sold. As more homes were being sold, the prices were going up and loans were getting more rewarding. Banks then created new loan packages,eg the adjustable rate Mortgage, that were appealing in the 1st couple of years but then became more expensive to the borrower ( yet more profitable to the bank ). The profit equation for the banks were higher home values and higher loan amounts and higher rates = profit.
in the chaotic time of crazy profits for the banks, they did not remember to follow some basic guidelines and are now finding out there are results to their irresponsible actions. Now that the market has gone south, their fake actions, short cuts, and illegal behavior are being brought out to light.
It's so bad that as more homes are being foreclosed upon, it is being found out that the banks do not even have title nor the inalienable right to foreclose. And worse yet is that the real holder of the title / deed is not even known without a forensic research and in most situations may never be traced in any way.
thus now the banks ( who took taxpayer cash to stop them from crumbling ) are now doing everything feasible to foreclose quickly without the general public understanding that they may not have the prerogative to foreclose. It's even being reported that major US banks systematically was faking documents in order to speed up repossessions for hundreds of thousands of householders, a mounting body of evidence shows. It seems likely that Fed and state laws were damaged in the process.
