The Six Trillion Dollar ProblemOctober 29, 2010
By Greg Hunter’s USAWatchdog.com
When I was an investigative reporter at the networks, the first question we would ask when trying to decide if we wanted to do a story was: How many? How many people have been hurt by a defective product? How many defective products of a certain kind were in use? How many dollars will it take to fix the problem? In the case of the recent mortgage crisis – “Foreclosuregate,” the question of how many has been answered.It has been widely reported that there are a little more than 60 million home mortgages in the Mortgage Electronic Registry System (MERS). If every one of the 60 million mortgages are worth $100,000, that would mean a total of at least $6 trillion in home mortgages that are electronically filed. In MERS, there is no physical written record of a “Promissory Note.” In almost all states, you need that original “Note” to prove ownership of a home. That means in almost every single state, the banks cannot legally foreclose on your home without this document. Some say the loan documents were lost on purpose because the bankers did not want their massive fraud to see the light of day. Whether or not the “Notes” were lost on purpose or accident, the fact is the original “Notes” are nowhere to be found. That is what the “Robo Signing” part of the story is all about. It has been widely reported that “foreclosure mills” were creating massive amounts of counterfeit Promissory Notes so banks could legally foreclose on homeowners.
In the post I did earlier this week called “The Perfect No-Prosecution Crime,” I laid out several layers of fraud and white collar crime of mortgage and foreclosure fraud. The lack of the Promissory Note is the biggest of all the problems in this chain of chicanery. Here’s why. A Promissory Note is a financial instrument. It is in the same family as a Federal Reserve Note. For example, if you copied a $100 bill and then tried to spend that copy in a store, because you lost the original, is it still money?–Of course not. You need the original financial instrument (in this case, $100 Federal Reserve Note) to make a legal transaction in a store. The same is true for a Promissory Note. You need the original Promissory Note to legally complete a foreclosure. A counterfeit, or copy, of a Promissory Note is not a financial instrument, just like a counterfeit or copy of a $100 bill is not a financial instrument!
Can you see how big this problem really is for the banks? This is $6 trillion in real estate that fat cat bankers cannot legally prove they own. Likewise, that means trillions of mortgage-backed securities HAVE NO BACKING. I think this is the biggest financial fraud in history. This was not an accident made by someone pressing the wrong button or a few documents that weren’t handled properly, but fraud on a massive scale that took years and tens of thousands of people to pull off. Ironically, this is all playing out against a backdrop of outrageous Wall Street pay. This year the big banks are going to pay a record $144 billion! (Click here for more on that story.)
One of my regular readers thinks Congress can simply pass a law and make all the crimes retroactively legal. To that I said, “So Congress is going to change hundreds of years of real estate document law in each and every state? Along with IRS tax laws broken, trust laws broken, security laws broken and on top of that, make crimes retroactively not crimes anymore? That’s a lot even for Congress. I think the path of least resistance is more likely printing money to paper over the problem. . . . I hope you are wrong on Congress because if they do change all of these laws to comfort the criminal banksters, we might as well change the name of the country to the United States of Crime.”
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