Injecting Integrity into the Mortgage Business

This is good to know because you can’t clean it up if you don’t understand it. And we all know how intentionally convoluted the mortgage racket was made. Most big developers did the same thing – this was not unusual. The slime was not in the construction and sales. The corruption is in the software used by Wall Street that had turned off its built-in fraud detection. No one knew what was really going on or how the pension funds and unions were being attacked. Wall Street saw unions as a problem for business and it appears wanted to end them or severely cripple their strong organizations. Wall Street thrived in over-leveraging business by manipulating their pension funds that were not properly protected. IMHO these were intentional acts stemming from Wall Street top management and cleverly covered up and silenced in a shroud of exorbitant bonus $$$, lavish and deviate lifestyle.

No one knew the real inner circle. Mortgage brokers were given a slew of computer programs with relaxed controls from each of the major pretender lenders. Brokers were encouraged to make loans with the same promises homeowners were given – “don’t worry you can refinance in a couple of years as long as you keep up good credit” and “real estate has been going up for 70 years.” No one on the outside knew that the investors were being told by the hedge funds that the trusts were empty, appraisals intentionally inflated, and/or based on defaulting algorithms. Credit cash flow had stopped but investment banks still had money to finish up filling trusts – business as usual was the same mantra until Lehman was taken down.

Whether you like Trump or not, in his defense he was never in the Wall Street inner circle. He would not have known any better than any of the rest of us what was transpiring behind the securitization curtain – or that the 1990s brought with it a powerful doom that caused over 10 years of un-prosecuted corruption. My guess is Trump sees it now. Maybe he realizes that status quo is never going to fix it.

But take notice – no one in the media asks him directly about Wall Street. And as for his bankruptcies – it is remarkable that his companies emerged from Chapter 11. Again, this is conjecture – but like homeowners, Trump was over-leveraged in debt – likely an intentional Wall Street system with no safeguards. Foreclosure and re-sale is how they stay liquid. So, no doubt Trump understands how to save a company so deeply leveraged in debt and maybe that’s what it will take to save America… just look at the trillion$ our taxpayers have heaped on their backs.

Justice League

By Lynn Szymoniak March 7, 2016

March 7, 2016

Trump Mortgage was a company started in 2006 and closed 18 months later, following a scandal that involved significant over-stating of the credentials of the company’s president, E.J. Ridings.   When Trump Mortgage closed, Donald Trump licensed his name to First Meridian Mortgage as his next partner in the residential mortgage business.  How well did First Meridian Mortgage, a/k/a Trump Financial, operate?

First Meridian Mortgage made money, but not because of its careful lending practices.  First Meridian Mortgage made money by selling its loans to big banks and securities companies so that the loans could be included in residential mortgage-backed trusts that were being created and sold at breakneck speed from 2004 through the first half of 2007.

Donald Trump asserted when Trump Mortgage began that he wanted to inject integrity into the mortgage industry.  The mortgages made by First Meridian…

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2 thoughts on “Injecting Integrity into the Mortgage Business

  1. The author of this piece was one of the first and few attorneys who called attention to the MERS mortgage ponzi.

    I understand Donald has a plan to unclog the foreclosure logjam in the courts…The children of anyone who protests a notice of default will be waterboarded until they admit to being losers.

    • Oh – I thought that would be Clinton’s position given her allegiance to Goldman Sachs and Wall Street. They’ll probably dump the Notice of Default altogether as unnecessary and just give properties back to Wall Street who took them in the first place.

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