Ashes to Ashes...
One of the most important topics I discuss week after week in the Friday Road Trip is the GIGANTIC PROBLEMS in the mortgage markets. When I say "massive" I mean every single mortgage and mortgage derivative is now in question. All credibility is lost. The entire industry is in meltdown mode and our fragile banking system cannot sustain it much longer (likely only a matter of weeks!)
Here's the latest from the brilliant folks over at Zero Hedge:
Massive Mortgage Mess Update: Title Companies Stop Insuring Foreclosed Properties
Today's latest chapter in what is now known as the new 3M: the Massive Mortgage Mess, is that Fidelity National has told lenders to halt foreclosures, and to stop sales of bank owned properties. The reason, and this should be no surprise to anyone, is "possible document flaws." Fidelity is merely the next of, well, all.
And while the WaPo reports that the John Walsh, acting director of the OCC has reached out to seven lenders including Chase, Bank of America, Wells Fargo, Citi, PNC Bank, U.S. Bank and HSBC, to review their foreclosure processes in light of the Ally and JPM Chase situations, the news of the day comes from the NYT that Old Republic National Title has stopped insuring title to Ally-foreclosed properties "until further notice." And once the insurers lost faith in the product they are supposed to have 100% confidence in it is game over: virtually no foreclosure transactions will take place going forward. We hope RealtyTrac will provide an update on what they may be seeing in foreclosure trends in the past two weeks : we are confident these have plunged off a cliff across the land.
NYT: "As more defaulting homeowners become aware of the lenders' problems, they are expected to hire lawyers and challenge the proceedings against them. And if completed foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners."
"Apparently alarmed about such a possibility, one of the major title insurance companies, Old Republic National Title, has sent a bulletin to agents saying that "until further notice" it would not insure title to properties foreclosed upon by GMAC Mortgage, the country's fourth-largest home lender and one of the two big lenders at the center of the current controversy."
"GMAC declined to comment, and Old Republic representatives did not return calls."
Of course this is all PART OF THE PLAN!
Don't believe me? Just look at the Fed booklet "Banking Basics" that was released THE SAME DAY as "Wishes and Rainbows" and "The Road to Roota". These were both posted to the Fed Boston website on January 1, 2007. Both were remakes of prior publications and both had a HUGE RED EXCLAMATION POINT tacked onto the end...
http://www.bos.frb.org/education/pubs/bankingbasics.htm
Page 31
Why do banks fail?
A bank is a business, and like other businesses, they can fail. Sometimes they fail because the people who run them make poor business decisions such as expanding too quickly or putting too much money into one type of loan.
Sometimes they fail because of fraud. Maybe the president makes questionable loans to friends or hires unqualified relatives and pays them huge salaries. But banks also go out of business because changing economic conditions make it difficult or impossible for borrowers to repay their loans.
and page 33
Or take the case of Bedrock Bank . . .
Bedrock Bank Gets Too Big Too Fast
Bedrock Bank's new president was determined to turn his bank into the region's biggest lender. Bedrock's loan officers got the message and started making as many loans as they could for condominium developments, shopping centers, office buildings, and high-priced suburban housing developments. Loan applications were not always checked as closely as they had been in the past, and some of the loans were approved more quickly than they had been in the old days. But nobody seemed concerned because the local economy was strong and real estate values were rising rapidly.
Everything seemed fine; everyone was making money. But then the economy slowed down, and things took a turn for the worse. The weak economy forced many businesses to close, leaving lots of vacant office space. Real estate values plummeted, and many developers fell behind on their loan payments.
In the end, Bedrock Bank was losing so much money on bad real estate loans that government regulators were forced to step in and close it. The regulators tried to find a buyer for Bed- rock, but no other bank wanted to get stuck with all the loans that had gone bad. Eventually, another bank agreed to buy Bedrock if the federal government would agree to keep many of the problem loans.
END
We have arrived at the end game my friends. The total and complete collapse of our financial system has begun and it will take EVERY paper or electronic assets with it.
I hope you are ready
Bix
PS - For all you GATA fans look at the picture on page 32 of Banking Basics...There we see the Federal Reserve fully exposed in the sun with the door cracked open. Compare that to the GATA painting here: www.gata.org
CAN THEY MAKE IT ANY MORE OBVIOUS???!!!
