A plan to help homeowners avoid foreclosure was good, in principle. In practice, it’s pushed the mortgage business toward yet another potential nightmare
MBS, CDO, IRS, CDS, the list is now infinite. like a synthetic currency, that only inbreds with massive access to credit and capital can access, just another tool, ultimately about transferring risk and building collateral for extreme leverage, for the myriad of ways, people, screw other people. especially greedy inbred wall st types.. all, a collection of "wolves on wall st".
a dem admin's blessing to their primary constituents: wall st banks. not that "party" affiliation means anything, they are clearly two wings of the same bird.
back when Nova on PBS still had a little teeth, they did a fabulous expose on Brooksley Born, the head of the CFTC, her efforts to regulate the derivatives, and the raw abuse she took from the usual pigs: clinton, summers, rubin, greenspan. Highly recommend this
the incompetence is so egregious, it's hard not to see conspiracy.
#CorruptionPredictsConspiracy - Corruption today is so plainly EVIDENT, so widespread, there is little debate. Powerful forces naturally, and predictably, share common incentives to collaborate with one another to accomplish shared interests, even when outwardly, they would appear to be in opposition. Conspiracy MUST be anticipated, not mocked.
BTW Adam Smith totally agrees with you, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
I'm not a fan of Capitalism (esp this late stage neo-liberalism) but even Adam Smith knew that monopolies and market manipulation need strong oversight and enforcement to make sure the system works.
it is amazing, isn't it. the Neoliberals (extreme libertarians, really) captured, and carved, segments of adam smith's writings, to serve their interests. but smith was against unearned income (rentier economy) somehow they just scrub those segments of his papers.
"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed." - Adam Smith
I believe Sheila Bair was also trying to warn everyone about the derivatives madness, but she and Born were ignored while The Committee to Save the World, Summers, Rubin and Greenspan, who later admitted he had made a "fundamental error in his understanding of the market" while testifying to Congress after the 2008 implosion, won the day, much to the delight of Bill Clinton, whose biggest success in office was to get free BJ's.
I seem to recall reading that it would have been cheaper for the government to just backstop all the bad mortgages than to do what they did, because the derivatives, which were supposed to decrease risk, actually multiplied it because such things such as naked credit default swaps allowed the same mortgages to have bets made on them multiple times.
Since March 11, the Federal Reserve has increased its balance sheet by $2.41 trillion, i.e it has printed $2.41 trillion to support the asset prices of Wall Street and the wealthy.
If instead that $2.41 trillion had been spread equally over the 130 million households in the U.S., this would have amounted to $18,535 per household. For many this would have been welcome relief to get through the crisis.
But no. We know where the Fed's priorities lie. Making sure that Wall Street and the wealthy suffer no losses.
Nels, perhaps you can answer this: is that debt held by the Fed considered part of the national debt, or is it kept separate, and if so, can it just forgive its own debt, especially seeing as how we apparently cannot audit it?
The more I learn about how the money game is played, the more respect I have for counterfeiters. Will those etf's be using the money from the bailout to do so? By monetizing the debt, are you saying that the debt will disappear, to be replaced by "money"? If that's right, then what the whole game is is a balancing act between creating free money alongside debt to be repaid so as to both keep things moving while not creating too much money that will result in inflation at some point.
Forgive my lack of detailed knowledge despite my attempts to learn.
Treasury will indemnify the Fed against losses from all these programs which magically ends up on our deficit. Treasury will print money or sell treasuries to fund it in the short term. All the debt they issue or money they print is just a number until people lose faith in the Fed and the dollar or we can’t find buyers for our debt.
Aren't most countries printing money right now to increase velocity? If so, doesn't that make most of the printing a wash globally? Meaning, if you're looking to invest, doesn't the situation look similar in each country with sovereign debt?
The problem that is brewing is who other than central banks is going to buy the debt? Every country is doing the same monetary policy which takes away a lot of natural treasury buyers for the US. At some point US markets are not going to indefinitely fund govt borrowing at these insanely low rates and then what? Is the Fed going to allow rates to rise to 3% or 5% which would kill current bond holders and increase interest expense for the govt to unsustainable levels. You must remember Treasury is funding the bulk of the deficit on short term debt. Or do we just try MMT and print money indefinitely and debase the dollar. Doesn’t sound like a good choice either way.
What it comes down to is Dick Cheney was right for once in his life when he said deficits are just numbers, as a way to defend the cost of our military follies or tax cuts, though I would prefer our debt be used to promote the real economy and the people it's supposed to serve, a fanciful thought inside The Beltway.
I guess as long as the dollar maintains its position as the world's reserve trading currency, the idiots in D.C. will not change their tune one bit.
So appreciate the clear description of the mortgage servicers industry! Not to be trusted. Liars. Friends have told me as much, but it was anecdotal so I waited finally to have Matt make sense of it. Thank you!
While it is in the national interest to secure the mortgages of homeowners in order to avoid another housing crisis, bailing out mortgage servicers isn't the only way to do it. The government should buy defaulting mortgages at some fraction of their face value and service them in a new version of the New Deal Home Owners Loan Corporation (1933-54).
Why always bail out financial middlemen? Servicers are for-profit enterprises owned by investors, supported by bondholders who should endure the consequences of business reverses. If mortgage servicers can survive with this infusion of government cash for their bad mortgages, fine: they can continue to service their profitable mortgages. If not, they liquidate and pay any remaining proceeds to their bondholders and investors.
This ought to have been done the first time around in 2008, and not doing so in 2020 will further concentrate the mortgage service industry exactly as the bailout did the banking industry. And once again place the burden largely on homeowners at increased risk of foreclosure.
Here's a thought; maybe we could stop securitizing so much of the debt we create, and have actual mortgage companies hold the mortgages they create, at least for a fixed number of years, the length of that time being directly related to the riskiness of the debt. Or maybe, those WS geniuses have developed too much of a fondness for what Fabrice Toure termed the mental masturbation of the derivatives game.
10 'Murkan carrier battle groups still keep most of the world on the dollar. So long as this is the case, the Third Rothschild National Bank, a.k.a. Federal Reserve, can keep warehousing debt and pumping out more funnymoney.
These Servicers are the lowlife debt collectors that will use their name as the Plaintiff in the fraudclosure complaints against the homeowners. Even though they lent nothing hold nothing and own nothing. Let them all go Bankruptcy.
Maybe blockchain should be developed for the servicing process. Doesn't the CEO of Quicken Loans own 2 professional sports franchises and most of the buildings in downtown Detroit? Middle Manning worked out for him.
Not if you have an FHA, VA, USDA, Freddie or Fannie backed mortgage (which captures about 70% of the mortgage market). After forbearance, which is authorized by the CARES Act to be an option for up to 360 days, an analysis by the servicer will be conducted of your financial situation (with documents, applications, etc) to determine the repayment options which may also depend on loan type. Some options: lump-sum, repay over time, add to the end of the loan with either a balloon or additional months of payment, or if income is reduced, apply for a loan modification. That process has, at this time, no statute or guidance to provide clarity and will be a complete mess because: mortgage servicers. Another thing for homeowners to consider is if they pay property taxes and insurance and HOA dues on their own (not escrowed and paid through their mortgage servicer), those payments will have to be kept current and if those expenses are escrowed, it's possible those expenses will have to be repaid somehow upon exiting forbearance even if the principal and interest are shifted to the end of the loan.
Yes, links are available for Freddie and Fannie lookup tools. Your original mortgage documents and possibly notations on your credit report entries will refer to FHA or VA. If you are having trouble with a mortgage servicer, there are 1) free HUD counselors, 2) file complaint with the CFPB (those complaints are anonymized and can be viewed by media and researchers who can use them to expose homeowner harms), your state and federal lawmakers, and your state AG; 3) file a complaint with FHFA (Freddie & Fannie loans), VA for VA loans, HUD for FHA loans and USDA for those loans.
From CFPB website: Forbearance does not erase what you owe. You’ll have to repay any missed or reduced payments in the future. So, if you’re able to keep up with your payments, keep making them. The types of forbearance available vary by loan type.
So the payments will be due at some point. WHEN is not spelled out or clear as far as I can tell
Whom would I contact if Mr. Cooper, my MSP goes bust? Who would contact me to let me know? Should I cal all my US or State representative?. And how would I know Mr. Cooper is out of business? I know my mortgage is deducted automatically from my bank account each month.
Thank you for everything you do, Matt. Reporting on the stories that matter, and that nobody else is covering.
derivatives. "looks good on paper, boss".
MBS, CDO, IRS, CDS, the list is now infinite. like a synthetic currency, that only inbreds with massive access to credit and capital can access, just another tool, ultimately about transferring risk and building collateral for extreme leverage, for the myriad of ways, people, screw other people. especially greedy inbred wall st types.. all, a collection of "wolves on wall st".
a dem admin's blessing to their primary constituents: wall st banks. not that "party" affiliation means anything, they are clearly two wings of the same bird.
back when Nova on PBS still had a little teeth, they did a fabulous expose on Brooksley Born, the head of the CFTC, her efforts to regulate the derivatives, and the raw abuse she took from the usual pigs: clinton, summers, rubin, greenspan. Highly recommend this
https://www.pbs.org/video/frontline-the-warning/
the incompetence is so egregious, it's hard not to see conspiracy.
#CorruptionPredictsConspiracy - Corruption today is so plainly EVIDENT, so widespread, there is little debate. Powerful forces naturally, and predictably, share common incentives to collaborate with one another to accomplish shared interests, even when outwardly, they would appear to be in opposition. Conspiracy MUST be anticipated, not mocked.
BTW Adam Smith totally agrees with you, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
I'm not a fan of Capitalism (esp this late stage neo-liberalism) but even Adam Smith knew that monopolies and market manipulation need strong oversight and enforcement to make sure the system works.
it is amazing, isn't it. the Neoliberals (extreme libertarians, really) captured, and carved, segments of adam smith's writings, to serve their interests. but smith was against unearned income (rentier economy) somehow they just scrub those segments of his papers.
"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed." - Adam Smith
I believe Sheila Bair was also trying to warn everyone about the derivatives madness, but she and Born were ignored while The Committee to Save the World, Summers, Rubin and Greenspan, who later admitted he had made a "fundamental error in his understanding of the market" while testifying to Congress after the 2008 implosion, won the day, much to the delight of Bill Clinton, whose biggest success in office was to get free BJ's.
I seem to recall reading that it would have been cheaper for the government to just backstop all the bad mortgages than to do what they did, because the derivatives, which were supposed to decrease risk, actually multiplied it because such things such as naked credit default swaps allowed the same mortgages to have bets made on them multiple times.
Since March 11, the Federal Reserve has increased its balance sheet by $2.41 trillion, i.e it has printed $2.41 trillion to support the asset prices of Wall Street and the wealthy.
If instead that $2.41 trillion had been spread equally over the 130 million households in the U.S., this would have amounted to $18,535 per household. For many this would have been welcome relief to get through the crisis.
But no. We know where the Fed's priorities lie. Making sure that Wall Street and the wealthy suffer no losses.
Nels, perhaps you can answer this: is that debt held by the Fed considered part of the national debt, or is it kept separate, and if so, can it just forgive its own debt, especially seeing as how we apparently cannot audit it?
The treasury is going to indemnify the Fed so we basically are monetizing all that debt. The high yield etf’s they are about to buy also.
The more I learn about how the money game is played, the more respect I have for counterfeiters. Will those etf's be using the money from the bailout to do so? By monetizing the debt, are you saying that the debt will disappear, to be replaced by "money"? If that's right, then what the whole game is is a balancing act between creating free money alongside debt to be repaid so as to both keep things moving while not creating too much money that will result in inflation at some point.
Forgive my lack of detailed knowledge despite my attempts to learn.
Treasury will indemnify the Fed against losses from all these programs which magically ends up on our deficit. Treasury will print money or sell treasuries to fund it in the short term. All the debt they issue or money they print is just a number until people lose faith in the Fed and the dollar or we can’t find buyers for our debt.
Aren't most countries printing money right now to increase velocity? If so, doesn't that make most of the printing a wash globally? Meaning, if you're looking to invest, doesn't the situation look similar in each country with sovereign debt?
The problem that is brewing is who other than central banks is going to buy the debt? Every country is doing the same monetary policy which takes away a lot of natural treasury buyers for the US. At some point US markets are not going to indefinitely fund govt borrowing at these insanely low rates and then what? Is the Fed going to allow rates to rise to 3% or 5% which would kill current bond holders and increase interest expense for the govt to unsustainable levels. You must remember Treasury is funding the bulk of the deficit on short term debt. Or do we just try MMT and print money indefinitely and debase the dollar. Doesn’t sound like a good choice either way.
Appreciate it, Byron.
What it comes down to is Dick Cheney was right for once in his life when he said deficits are just numbers, as a way to defend the cost of our military follies or tax cuts, though I would prefer our debt be used to promote the real economy and the people it's supposed to serve, a fanciful thought inside The Beltway.
I guess as long as the dollar maintains its position as the world's reserve trading currency, the idiots in D.C. will not change their tune one bit.
So appreciate the clear description of the mortgage servicers industry! Not to be trusted. Liars. Friends have told me as much, but it was anecdotal so I waited finally to have Matt make sense of it. Thank you!
While it is in the national interest to secure the mortgages of homeowners in order to avoid another housing crisis, bailing out mortgage servicers isn't the only way to do it. The government should buy defaulting mortgages at some fraction of their face value and service them in a new version of the New Deal Home Owners Loan Corporation (1933-54).
n.wikipedia.org/wiki/Home_Owners%27_Loan_Corporation
Why always bail out financial middlemen? Servicers are for-profit enterprises owned by investors, supported by bondholders who should endure the consequences of business reverses. If mortgage servicers can survive with this infusion of government cash for their bad mortgages, fine: they can continue to service their profitable mortgages. If not, they liquidate and pay any remaining proceeds to their bondholders and investors.
This ought to have been done the first time around in 2008, and not doing so in 2020 will further concentrate the mortgage service industry exactly as the bailout did the banking industry. And once again place the burden largely on homeowners at increased risk of foreclosure.
Here's a thought; maybe we could stop securitizing so much of the debt we create, and have actual mortgage companies hold the mortgages they create, at least for a fixed number of years, the length of that time being directly related to the riskiness of the debt. Or maybe, those WS geniuses have developed too much of a fondness for what Fabrice Toure termed the mental masturbation of the derivatives game.
Bravo Matt for bringing to light in real colorful language another way the financial system is stupid and selfish and everyone’s problem
“THEY TOOK MY FUCKING THUMBS, CHAHLIE”
Anytime Taibbi and Dayen are tag teaming in the same arena you might say time to panic.
Why do the services need to pay the mortgage note holders (FNMA FMAC) on the skipped months? So much for “We’re all in this together.”
10 'Murkan carrier battle groups still keep most of the world on the dollar. So long as this is the case, the Third Rothschild National Bank, a.k.a. Federal Reserve, can keep warehousing debt and pumping out more funnymoney.
These Servicers are the lowlife debt collectors that will use their name as the Plaintiff in the fraudclosure complaints against the homeowners. Even though they lent nothing hold nothing and own nothing. Let them all go Bankruptcy.
Maybe blockchain should be developed for the servicing process. Doesn't the CEO of Quicken Loans own 2 professional sports franchises and most of the buildings in downtown Detroit? Middle Manning worked out for him.
Will payments be made for homeowners here in New York or not ? Will they have to be paid back
Thank you
Still unclear: will payments not made during forbearance be due at the end or not?? Thanks MT
Not if you have an FHA, VA, USDA, Freddie or Fannie backed mortgage (which captures about 70% of the mortgage market). After forbearance, which is authorized by the CARES Act to be an option for up to 360 days, an analysis by the servicer will be conducted of your financial situation (with documents, applications, etc) to determine the repayment options which may also depend on loan type. Some options: lump-sum, repay over time, add to the end of the loan with either a balloon or additional months of payment, or if income is reduced, apply for a loan modification. That process has, at this time, no statute or guidance to provide clarity and will be a complete mess because: mortgage servicers. Another thing for homeowners to consider is if they pay property taxes and insurance and HOA dues on their own (not escrowed and paid through their mortgage servicer), those payments will have to be kept current and if those expenses are escrowed, it's possible those expenses will have to be repaid somehow upon exiting forbearance even if the principal and interest are shifted to the end of the loan.
Thank you for the details. How do you know if you have a "FHA, VA, USDA, Freddie or Fannie backed mortgage"? Thanks!
I found the answer! https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/
Yes, links are available for Freddie and Fannie lookup tools. Your original mortgage documents and possibly notations on your credit report entries will refer to FHA or VA. If you are having trouble with a mortgage servicer, there are 1) free HUD counselors, 2) file complaint with the CFPB (those complaints are anonymized and can be viewed by media and researchers who can use them to expose homeowner harms), your state and federal lawmakers, and your state AG; 3) file a complaint with FHFA (Freddie & Fannie loans), VA for VA loans, HUD for FHA loans and USDA for those loans.
From CFPB website: Forbearance does not erase what you owe. You’ll have to repay any missed or reduced payments in the future. So, if you’re able to keep up with your payments, keep making them. The types of forbearance available vary by loan type.
So the payments will be due at some point. WHEN is not spelled out or clear as far as I can tell
So, that could cause a crisis of sorts when all of the money is due. Wouldn't you think?
Whom would I contact if Mr. Cooper, my MSP goes bust? Who would contact me to let me know? Should I cal all my US or State representative?. And how would I know Mr. Cooper is out of business? I know my mortgage is deducted automatically from my bank account each month.