Band aid Politics leads
America into becoming a Third World Nation
By D’Anne Burley
Housing and Market Crisis We need to Speak out now
Catherine Austin Fitts, served as managing director and member of the board of directors of the Wall Street investment bank Dillon, Read & Co. Inc. As Assistant Secretary of Housing/Federal Housing Commissioner at the United States Department of Housing and Urban Development in the first Bush Administration, and as the president of Hamilton Securities Group, Inc., an investment banker and financial software developer, she knew about the theft within HUD years ago which was impacting public housing.
In the 80’s HUD properties which DID NOT EXIST on paper, in reality were given lots of money for repairs. The only issue was that the property was there indeed, but no Public Housing existed on those sites! Instead of a federally funded property with housing on the grounds for the poor, the property was on a vacant lot, and was used to create financial shells. The Federal Government paid to fix equipment and apartment(s) via privately held shell businesses which received Government contracts via HUD to do the work. Money out, money gone, but the poor received nothing. The tax payers paid for this nightmare. Poor families lost children and loved ones who stepped onto elevators which never arrived to their floor, and without looking they fell to their deaths due to non-working equipment. This was massive contract fraud and corruption. Was this money ever repaid to the system?
The issue of Real Estate, Housing and Mortgage Banking fraud began years ago and many watched from the inside with horror. The Mortgage guy and gal who were just attempting to do a service as the middleman in these loans were placed at risk. The consumers needed affordable housing growth. The condo scare was on, whereby many available rentals were converting over night. Renters with moderate incomes were being forced to purchase homes due to condo conversions, and housing availability in good areas. Then the conventional Mortgage Loan Market Place opened up to the subprime market. In the beginning you still had to have 20% down and at least a 560 credit score. Many of the banks required you to pay off your credit card debt prior to purchase. Then as time passed the requirement got weaker and weaker for consumer credit guidelines. In the mid 90’s the interest only program came out whereby loans were being done with the interest being 1,2,3% and very little being paid onto the principle. Properties were assessed within future value appraisals which no one speaks of today.
I know about these loans, because I was in the Mortgage Industry and was a Director of a Gold Coast Mortgage LLC. Money was being made. Greed factors were present. The real estate market became a playground for developers and others getting your mother’s and father’s property for $200-300k which they had originally purchased 20 years earlier for under $50k. The $50k homes were being replaced by $500k to 1 million dollar properties which offered up a large bank roll for all involved. For everybody except the consumer who is now the fall guy in the mortgage mess.
The game was to State Your Income on the Mortgage Application called the 1003.The consumer stated what they made in earnings, which was in many cases certified by CPAs. The game was to get the income bumped up so they could qualify for these new lending products. The consumer was not really aware of the money owed on the loan and how the adjustment worked after the loan was granted, or that it would be adjusted based upon being on an arm and that the adjustment figure would cause the loans to go from, for example, a 3% interest rate to maybe 6 or 10%. The increase added more to the mortgage payment as well as making it hard for many to pay back the debt to the bank! This meant that you had nothing built in to pull from if there was a crisis. No equity. The appraised value was on future values of property within your area, and you paid nothing into the principle of the loan. Your monthly payment mostly went directly into interest! The money was flowing in and out of the hands of the people within the banking industries and your property was being sold to security firms who held onto the paper making more and more money off your new debt. Those who owned property were no more than just glorified renters.
The secondary market had the homes, they held your paper, and served your debt, and this is where Freddie Mac and the other entire Mac businesses made there money when your loan defaulted. There was a value to your home on resale within the secondary market, if the home was foreclosed on then. But today they claim they cannot determine the value of these properties. The consumers are left on the doorsteps of the court house faced with administrative judgments known as "Summary Judgments" whereby you are already guilty of something. You cannot argue your case before the court because within this type of judgment the contract has determined, prior to your case, that you defaulted in payment, therefore failure to pay doomed your basic rights to fight your case.
A few weeks ago I visited a Chicago courthouse and saw 3 paralegals with at least 40 cases a piece on their desks, all within this hearing of just one courtroom calendar hour. That means, 120 people lost they’re homes in 60 minutes. Only three people, home owners, came to attempt to get some rights within the system. Because they had no money to fight with due to the loss of a job, lack of income and/or being in a home they could never have afforded, the judge granted them between 30-60 days to vacate. They were being evicted on to the streets. These people are Americans, middle class, the people who work everyday just getting by in today’s economy. They have children who are now being thrust into becoming the poor over night.