The next big shoe to drop in real estate is the "scam" known as title
With the recent halt in foreclosures by Bank of America, JP Morgan
Chase, GMAC Mortgage & others, you have to ask the question, why the
suddenness and scope?
Did they just watch the 1947 classic film "It's A Wonderful Life" and
realize they've turned into the greedy soulless Mr. Potter and that
their business model should be more like the Bailey Savings & Loan?
Did the "robo-signer" expose finally get the attention of Mahogany Row?
Here's the real story behind the story:
There's no gold in Fort Knox. Just as we need to audit our gold reserves
to see what we really have, if any, we need to examine what we have with
regard to title insurance. If there is a sudden "run" on title insurers,
what do they have in reserve to pay those claims? Are we looking at
another credit default swap scenario where we really have nothing but
the paper it's written on?
This is likely to reveal itself as yet another "papyrus ponzi scheme".
What happens to those buyers or investors that snapped up foreclosed
properties for cash and are not required to buy title insurance? What
claims do the original owners who were illegally foreclosed on have to
their property? Will the banks have to eat principal write downs or buy
out the new owners? Who will buy a property in this market when the
prospect of re-selling is uncertain because there is no clean title?
Why aren't banks who are sitting on trillions of dollars in cash and
short-term financial instruments lending at a much higher rate? The
political environment has certainly led to uncertainty in policy and
could help to explain them sitting on their hands. But what if the banks
know that they may be facing huge write downs as it relates to real
estate and are simply padding their balance sheets in anticipation of
when the write down happens. They'll need hundreds of billions of
dollars to meet capital requirements and we the non-lent-to taxpayers
will once again be there to clean up their mess.
The real estate bubble was not the cause of the financial meltdown. It
was the first place the "financial incest" showed itself.
We will live through a lost decade unless Wall St and the bought and
paid for politicians come clean with the American people.
The mid-term election is the equivalent of a political foreclosure notice.
We want our house back and if you don't abide by the terms of your term
in Congress, we're ready to evict you.
We deserve a "clean title" to America.