One of the outstanding interviews after President Obama announced there would be an investigative task force into the Wall Street banks’ mortgage fraud was aired on The Rachel Maddow Show on Jan. 28, 2012. It is a MUST WATCH TV interview – click here.
New York Attorney General Eric Super-Schneiderman has been appointed by President Obama as a key leader in the investigation. Needless to say AG Schneiderman has an inside view of the fraud that occurred during and as a result of the previous housing bubble and now, with Federal resources, there it is more likely that the full securitization fraud story will unfold.
Homeowners and their collateral were the “patsys” in this ‘too good to be true’ mortgage dream scheme. Investors were the “marks” or “pigeons” whose monies were scammed to the detriment of Trillion$ in retirement and pension fund accounts that have been obliterated in the biggest Ponzi scheme of the last two civilized centuries.
Yes, someone is accountable which is what this task force has been charged with determining.
The depth of the damage is yet unknown. The crooks had been planning the heist for several decades (and generations). Laws and statutes have been changed in nearly every state in the nation. And Federal laws have been altered and repealed in a planned effort to pull off the worldwide swindle. Economists do not think this was merely a miscalculated error. There was too much precision in the information gathered thus far. And the links to politicians who benefited from the “dole” and sweet favors have already started to surface. Open the doors and let them bolt – if they need to be found …they cannot hide.
Unknown to the average citizen are the subtle changes that were nurtured by the banks in our states’ Uniform Commercial Codes. One very interesting UCC statute is § 3-301 that was revised (along with various others) around the 1990s. The banks pushed the revisions under the guise of curtailing check fraud with claims that it was over-burdening the courts.
Nice cover if anyone could ever believe that was all they had in mind; however, the timeline interestingly enough coincides with the creation and foundation of the mortgage scheme that was carried over from the 1970s and 80s and redesigned with “MERS” in the early 1990s… Of course, that’s when most of the revisions were passed.
Hawaii House Representative Mele Carroll has introduced a bill HB 2705 to repeal the outdated HRS § 3-301. Every state in the union faced with fraudulent mortgage assignments and foreclosures should consider doing the same thing.
This is the UCC statute that needs to be repealed: § 3-301. PERSON ENTITLED TO ENFORCE INSTRUMENT.
“Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.
Yeah, it says even if the bank is in wrongful possession of a promissory note – it can still enforce the note… doesn’t sound like it was just designed for check fraud, does it?
Opinion is that the check fraud claim was just a cover to pass legislation that would create a great deal more money for the banks than the loss of fraudulent checks. In fact, this was the reverse, as § 3-301 allowed the banks to wrongfully possess hypothetical promissory notes and legally get away with it.
Since the 1990s, banks have become much more sophisticated and check writing has been substantially reduced with the use of debit cards as well as software safeguards make it much more difficult to pass a bad check. The uses for UCC § 3-301 have dramatically decreased except for allowing banks to get away with mortgage fraud. The time has come to roll back some of the bank manipulated revisions in legislation.
In the defense for repealing UCC § 3-301 is a very compelling argument in that New York refused to revise their UCC. It certainly doesn’t give the banks the edge and given that Wall Street exists in New York, New York probably knows something the rest of the country is just now learning – the banks are dirty. And if you have to compromise a total repeal here is the New York version:
2010 New York Code / UCC – Uniform Commercial Code
Article 3 – COMMERCIAL PAPER
Part 3 – § 3-301 – Rights of a Holder.
The holder of an instrument whether or not he is the owner may transfer or negotiate it and, except as otherwise provided in Section 3–603 on payment or satisfaction, discharge it or enforce payment in his own name.
While this one little statute doesn’t appear like it could do a lot of damage, Judges that are bank bought and/or bank friendly can lean on it to overrule a homeowner’s objections to a fraudulent Assignment of Mortgage. There are other defenses, but Judges know that every time they defeat the homeowner, the more costly it becomes for the fight to continue and their bank friends win by default.
This means you need to lean on your legislators to do the right thing. Repeal § 3-301 – give it a nap. 49 states need to take this action – learn from New York. If check fraud pops back up then bring it out of mothballs and plop it back in – but it’s doubtful that will happen given the today’s technology.
Remind your state and federal Legislators to beware of bank bribery and nurturing changes in the federal and state laws. Watch campaign donations and call this to your Legislators’ attention. We all need to be DOERS to effectuate change.
Thank you Cindy for the heads-up on the Maddow video – Awesome!
God Bless you Rep. Carroll for HB 2705. You are an inspiration.