Posted by: quiscus | October 26, 2010

October 26, 2010

1.  “Inhumane impact of DOMA

But most gay Americans married to a foreign national have no such luck.  Most people don’t have careers that enable them to live outside of the U.S., and even for those who do, many are married to foreign nationals from countries which also do not provide immigration rights to same-sex couples.  For the thousands of same-sex couples in that situation, the choices are grim indeed:  they can choose (1) to live illegally in one country or the other, or (2) separate and live thousands of miles away — for the indefinite future — from the person with whom they want to share their lives.  As the HRW Report put it:  “thousands of U.S. citizens and their foreign same-sex partners face enormous hardships, separation and even exile because discriminatory U.S. immigration policies deprive these couples of the basic right to be together.”

And when one listens to the actual human cost from this legalized discrimination, it’s hard to overstate just how malicious and warped are those who support it.  There are 16 countries in the world, spanning five continents, which refuse to force their gay citizens to choose between exile, living illegally or permanent separation, including many which do not recognize same-sex marriage.  Yet the U.S. continues to force that horrific choice on its gay citizens.  Most political debates have reasonable arguments on both sides.  Subjecting gay Americans to self-exile or preventing them from living on the same continent as their spouse is manifestly not one of them.  It’s a grave injustice completely bereft of any justification for being allowed to continue.”

2.  “How Did the Banks Get Away With Pledging Mortgages to Multiple Buyers?

I’ve repeatedly documented that mortgages were pledged multiple times to different buyers. See this, this and this.

In response, some people (including one of the country’s top bankruptcy lawyers) have told me they don’t buy it.

Specifically, they ask such questions as:

  • With a mortgage sold to two different entities, wouldn’t the income from the mortgage be shown on the books of both entities?
  • Was the interest/principal payments that were made by the homeowner before they stopped being divided between both entities? If so, wouldn’t this have rung alarm bells immediately?
  • If only one was getting it, why didn’t the other entity immediately try to foreclose?
  • If there was one servicer involved, was the servicer covering the difference between what was collected and the payments actually made? If so, how did the servicer do this and still remain in business?
  • If two servicers were involved, why didn’t this come out sooner or were both servicers hiding this fraud?

So I wrote to some of the leading experts on mortgage fraud – L. Randall Wray (economics professor), Christopher Whalen (banking expert with Institutional Risk Analytics), and William K. Black (professor of economics and law, and the senior regulator during the S & L crisis) – to seek their insight.

the lender could sell the mortgage to multiple buyers. Those buyers could have far lower incentives to check on prior pledges and less ability to check for prior pledges. The entity selling a loan to multiple parties (A) has a compelling incentive to hide the prior pledge(s), (B) is financially sophisticated, and
therefore more capable of deception than a homeowner, and (C) can pick who to make the multiple sales to — allowing them to select the most vulnerable targets for fraud.

Subpart (C) provides the logical transition to the second requisite for multiple pledge frauds — vulnerable victims. The characteristics they would exhibit include (A) growing massively, (B) purchasing nonprime loans without fully underwriting the quality of the loans (and quality in this context inherently requires superb “paperwork”), (C) poor internal and external controls, and (D) opaque systems that make it extremely difficult to determine the beneficial owner and locate key mortgage documents that would reveal multiple sales. Unfortunately, these four characteristics were characteristic of many purchasers of nonprime mortgages. That is why I have long stated that the process was dominated by the financial sector equivalent of “don’t ask; don’t tell.”


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