Friday, March 6, 2009

The Banks' Fraud Disclosed

By the end of the first quarter of 2003 just over 4% of all Real Estate Loans made by Commercial Banks in the United States were either in default status or in foreclosure.

The problem really began even before the subprime loan explosion!

And it got worse, as the ARM (Adjustable Rate Mortgage) loans were more readily commercialized beginning in 2004. Foreclosure filings were reported on more than 2.3 million properties, or 1 in 54 homes, in 2008. That is an 81% increase from 2007 and a 225% increase from 2006, according to Foreclosure Data Firm, RealtyTrac.

Yet this all began prior to 2003, which was at the height of Commercial Bank Fraud.

Nevada led the nation with the highest foreclosure rate of 7.29%, followed by Florida at 4.52% and Arizona at 4.49%. The U.S. foreclosure rate as offered by the government was 1.84% for the year, if we accept their figures as accurate (?), and we do not!

All 50 states were aware of the Bank Fraud as early as the first quarter of 2003, but none did a thing to protect their citizens! Why? Were the Attorneys Generals on the take? I suspect many were, as I suspect were many State Court Judges and some Federal Judges and State and Federal Legislatures!

State Moratoriums and Stays from Freddie Mac and Fannie Mae had helped slow the pace of foreclosures for the fourth quarter of 2008, but by December, that effect had worn off. The number of foreclosure filings in December 2008 jumped 17% from November and 41% compared with December 2007, according to RealtyTrac. And with prices continuing to slide in most markets, more Americans are now making a conscious decision to walk away from their homes whose upside down values make way for a diminishing return.

"Clearly the foreclosure programs implemented to date have not had any real success in slowing down this foreclosure tsunami," James J. Saccacio, RealtyTrac's Chief Executive, said in a statement. (As if these programs had any real teeth or intent.)

Call it a case of too little too late, says Rod Dubitsky, Credit Suisse Managing Director, who now forecasts 8.1 million foreclosures over the next four years, up from his April estimate of 6.5 million. (Which by the way is about half the real expected number.)

"The absence of doing something (about this) on the front end has created far bigger problems on the back end," he says. Even now, struggling homeowners are having a hard time getting their banks' attention to avoid default.

Rising unemployment and the spike in foreclosure activity in December have many economists predicting a much longer real-estate recession than they had originally expected. Rick Sharga, a Senior Vice President at RealtyTrac, also expects 2009 to be far worse than 2008. And this time, he says, the culprit isn't subprime loans, but people with fixed-rate mortgages losing their jobs and the collapse of many of those stated-income loans.

The banks must stand behind the problem they created, and the Government MUST stop rewarding those who have committed the Fraud!

Let the Banks fall, their incompetence and greed has caused the Third Great Depression of the past 102 years.

Give the borrowers a moratorium!