Produce the Note

Make them produce the Note

http://money.cnn.com/video/#/video/news/2008/06/20/news.hunter.produce.note.cnnmoney

Keep Your Home (it IS Yours): DO NOT GO GENTLE INTO THAT GOOD NIGHT

December 26, 2008 · 1 Comment

DO NOT GO GENTLE INTO THAT GOOD NIGHT
From Wikipedia, the free encyclopedia

Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.

Though wise men at their end know dark is right,
Because their words had forked no lightning they
Do not go gentle into that good night.

Good men, the last wave by, crying how bright
Their frail deeds might have danced in a green bay,
Rage, rage against the dying of the light.

Wild men who caught and sang the sun in flight,
And learn, too late, they grieved it on its way,
Do not go gentle into that good night.

Grave men, near death, who see with blinding sight
Blind eyes could blaze like meteors and be gay,
Rage, rage against the dying of the light.

And you, my father, there on that sad height,
Curse, bless, me now with your fierce tears, I pray.
Do not go gentle into that good night.
Rage, rage against the dying of the light.

Analysis

Thomas watched his father, formerly in the Army, grow weak and frail with old age. Thus, the speaker in his poem tries to convince his father to fight against imminent death. The speaker addresses his father using wise men, good men, wild men, or serious, somber men as examples to illustrate the same message: that no matter how they have lived their lives or what they feel at the end they should die fighting. It is one of Thomas’ most popular, most easily accessible poems, and implies that one should not die without fighting for one’s life, or after life. [1]

Another explication is that the speaker admits that death is unavoidable, but encourages all men to fight death. This is not for their own sake, but to give closure and hope to the kin that they will leave behind. To support this, he gives examples of wise men, good men, wild men, and grave men to his father, who was dying at the time this poem was written. There is little textual evidence for this interpretation, however, except the words “curse, bless me now with your fierce tears, I pray.” Also, it has been historically stated that Thomas never showed this poem to his father; if so, it would seem that Thomas composed it more for his own benefit than his father’s.

A third reading of the poem observes the possibility that the speaker’s listing of various reactions of men in their final hours is a self-addressed rationalization of his father’s scolding catharsis before passing on. The line “Curse, bless, me now with your fierce tears, I pray,” might then suggest a negative interaction between the two generations, and because historical evidence leads readers to believe that the poet never in fact showed this poem to his father, it would not be ridiculous to think that Thomas wrote the poem knowing that his father was not the designated audience at all. He cites all of human beings’ rage, regardless of disposition, against death, and perhaps attempts to write off this negative interaction as a natural byproduct of death’s impending arrival.

Another reading of this poem shows the author’s own fear of death. He seems to fear having little separation between life and death such as in John Donne’s poem “A Valediction: Forbidding Mourning”, where:

“As virtuous men pass mildly away,

And whisper to their souls to go,

Whilst some of their sad friends do say,

“Now his breath goes,” and some say, “No.”[1]

It shows the author’s fear that there is very little that separates life from death. As such he feels the need for a strong indication of the difference between the two. It does not even matter whether he is being blessed or cursed, he wants to see a reaction (l. 17). The poem could be written as well in the hope that the speaker would be able to see his dying father. He gives the impression that since wise men, good men, wild men and grave men all regret leaving this world his father as well should not be wanting to leave this world without a fight. It seems to be a wild hope, that he will be able to see his father before he passes; that each will be able to say those last words to each other – whether curses or blessings.

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COMMENTARY: Also, from Wikipedia: “The term MORT GAGE comes from the Old French “dead pledge,” apparently meaning that the pledge ends (DIES) either when the obligation is fulfilled or the property is taken through FORECLOSURE.”

I’ve long been aware that the MORT of ‘mortgage’ means or comes from the root ‘DEATH.’ Many of us are fighting valiantly to prevent the DEATH of our American Dream through FORECLOSURE, a dying of the light against which we must RAGE.

Wasn’t our pledge – our GAGE – which we supported with our toil, sweat and sacrifice, after all, aggregated into a pool of assets that could be leveraged, sometimes egregiously, seventy to one, and ignited to produce explosive and insured profits totally disproportionate to what we put at risk? Did we MORTgagors participate or benefit from these excesses?

We should ‘not go gentle into that good night.’ We should accede neither to short sales nor to loan modifications that strip us of our rights.

Nor should we hand back the keys and walk away from a just fight, if our claim is superior or equity requires we stand our ground or firmly push back.

Remind those who took and parlayed our pledges- upon which we built our dreams – that to come with unclean hands and ask that justice be done, they too must do justice!

For countless millions, this presently is nothing short of a life and death struggle. Do not GO GENTLE! Rage, RAGE!

Do not go gentle into that good night.
Rage, rage against the dying of the light.

Allan

MSNBC.com

The following excerpt out of a recent article on MSNBC.com addresses the importance of establishing the ownership of a promissory note in foreclosure (or, for that matter, not in foreclosure):

• [M]aking an issue out of the actual ownership of the securitized title might strike some as a shameless stalling tactic aimed at abetting a debtor who, after all, owes the money. But [Florida attorney April] Charney said that if such basic legalities aren’t adhered to, a homeowner could pay his or her way out of a foreclosure jam only to wind up in another when a new plaintiff emerges claiming to own the debt. She described cases in which homeowners have been sued for foreclosure by two different trusts, each claiming they owned their house, and cases where trusts have been sent documents on the same case by two different servicers.(1)

***

• Bert Ely, a longtime analyst of the financial services industry and a scholar at the conservative Cato Institute who was among the first to predict the S&L scandal of the 1980s, said lenders may detest tactics like the ones Charney employs, but “this is well-established in bankruptcy practice, that you have to properly perfect the security interest, and if you haven’t, you’re screwed. … Debtors’ lawyers immediately start looking for flaws in how the debt is protected. Creditor attorneys always worry about this.”

 

• “It kind of boggles my mind that this is even an issue” in the nation’s current mortgage mess, he said. “I don’t understand how lawyers let this happen in the first place.” Mortgage-lending and servicing is “a matter of dotting the I’s and crossing the T’s. … That’s what puts the discipline in the process.”

“State proposes tough new rules for mortgage brokers”

Midnight Robber

State regulators are proposing the toughest mortgage regulations in Florida’s history to combat fraud and abuse.

·                          Read the full Herald investigation Borrowers Betrayed

 

 

BY JACK DOLAN, MATTHEW HAGGMAN AND ROB BARRY

jdolan@MiamiHerald.com

 

 

After months of stinging criticism for letting crooks and con artists prey on Florida borrowers, regulators have proposed sweeping changes in state law that would make Florida one of the most tightly regulated mortgage markets in the country.

The provisions call for annual criminal background checks for everyone selling mortgages in Florida, a ban on the most toxic types of loans and reviving a state fund that used to compensate victims of mortgage fraud.

The fund would provide up to $50,000 for people who can prove they were scammed by rogue brokers. Regulators quietly killed a similar fund more than 10 years ago, then used the money to pay for operating expenses, like salaries and conferences at five-star hotels, The Miami Herald reported in September.

Terry Straub, finance director for the Office of Financial Regulation, which is drafting the new bill, said restoring the fund is “the equitable thing to do.”

The measures would add to a regulatory overhaul that began in September after a Miami Herald investigation showed the agency allowed more than 10,000 people with criminal records to work in the mortgage profession between 2000 and 2007.

The Florida Cabinet imposed emergency rules, including a lifetime ban on anyone convicted of a felony involving fraud or financial wrongdoing.

The latest proposals — making the emergency rules harder to undo — will be debated when the legislative session begins in March. But many of the changes already have the support of top elected leaders.

”We are looking for more of an enforcement mentality,” said state Chief Financial officer Alex Sink, who joined with Gov. Charlie Crist in forcing the state’s top mortgage regulator to resign in response to the newspaper series.

The Miami Herald found that thousands cleared criminal background checks despite committing crimes state law specifically required regulators to screen, including fraud, bank robbery, racketeering and extortion.

In addition, more than half the criminals selling mortgages during the land boom — 5,306 — were not subject to any background check. In fact, the state refused to license and screen them for years, despite repeated pleas from industry leaders.

In their new bill, state regulators are pushing to screen and license everyone.

STRICTER THAN FEDS

The proposals — which reach far beyond a federal mortgage law passed last summer — also would require fresh nationwide criminal background checks every year, when licenses are renewed.

Under current state law, brokers are screened only when they apply for the first time. Their license can be revoked if they get convicted of a crime after that, but the state relies on the brokers to report their own arrests.

”This will give us a shot to look at everybody’s background once a year,” Straub said.

The Miami Herald found 564 brokers who were convicted of crimes after getting their licenses — including at least 20 convicted of mortgage fraud. All were allowed to keep selling loans.

The Miami Herald investigation also showed how regulators killed the victims’ compensation fund with virtually no public debate in the 1990s, despite warnings that mortgage fraud was on the rise.

Since then, Florida’s fraud rate has climbed to the highest in the nation — one of every four fraudulent loan applications in the U.S. now comes from Florida, according to the Mortgage Asset Research Institute.

The old victims’ fund was financed by a portion of mortgage broker license fees.

Regulators have continued to collect the money but have not compensated a single victim since 1997, the newspaper found.

GUARANTY FUND

The new bill proposes creation of a Mortgage Brokerage Guaranty Fund that would pay victims if they successfully sue their mortgage broker but can’t collect because the broker becomes insolvent.

Each borrower would be eligible for up to $50,000. If there were multiple claims against the same broker, payouts would be capped at $250,000.

All states are required to come up with a program to help compensate victims of mortgage fraud under the new federal law. But there are several options, including requiring brokers to buy insurance to cover fraud and making brokers show a minimum net worth.

Experts say guaranty funds are the most stringent and reliable because they collect money from brokers upfront, when they pay for their license.

David Bruns, spokesman for AARP Florida, one of the largest consumer groups in the state, said they’ll push for a victims’ fund.

”We regard this as a critical issue,” Bruns said. “The fact of the matter is, the mortgage crisis and mortgage fraud is still a critical problem in Florida. If anything, it has gotten worse.”

But Ritch Workman, president of the Florida Association of Mortgage Brokers who won a seat in the Florida House in November, is wavering on a campaign pledge to push for the fund.

The Melbourne Republican said lawmakers are leaning toward requiring brokers to buy bonds instead.

”What I want to do is dig deeper into bonding and see what that entails before I make a decision on whether I will stick to my guns on the guaranty fund,” Workman said.

Sink said she supports the creation of a victims’ fund.

The state’s latest proposals also contain language that would ban mortgage brokers from peddling some of the most toxic types of loans that became common during the land boom.

They would be barred from selling adjustable-rate loans with penalties built in to prevent borrowers from refinancing, and loans where the borrower actually owes the lender more money with each passing month.

Thomas Morcom of the Florida Association of Mortgage Brokers said banning particular loan types may face opposition because the law would not apply to federally chartered banks.

LIMITS ON CHOICES?

”That wouldn’t limit those products,” Morcom said. ‘Instead, it would just limit consumers’ choice to get those products.”

While the proposals won’t be considered by lawmakers until March, the Office of Financial Regulation’s Straub, who helped write the bill, warned the industry that drastic change is on the way.

”Everybody we’ve talked to indicates they understand the need for these things,” he said. “Thirty years ago, the industry was different and it wasn’t necessary. Now it is.”

 

Housing Prices Collapse at Near-Depression Pace

Dec. 23 (Bloomberg) — Sales of single-family houses in the U.S. dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing hopes that the market was close to a bottom.Association of Realtors said.mortgages, destroying household wealth and undermining consumers’ purchasing power.
resident-elect Barack Obama plans an unprecedented economic stimulus to restore growth, and pledged on Dec. 13 to limit foreclosures. One tenth of U.S. families who own a home are in financial distress, Obama said.sales fell 2.9 percent last month to a 17-year low of 407,000. The median sales price declined 11.5 percent from a year earlier to $220,400.

Purchases of both new and existing houses dropped 7.6 percent, the biggest decline since January 1989, to an annual rate of 4.43 million, government and industry figures showed today. A 13 percent drop in the median resale price was the most since records began in 1968 and was likely the largest since the 1930s, the National

“Housing is still in a freefall,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts.

The figures were worse than economists had forecast and signal that the battered housing market that led the economy into a recession may be taking another lurch down. Sliding property values mean more Americans will be under water on their

“We need desperately to get this economy moving,” Vice President-elect Joseph Biden, who is leading the incoming administration’s initiative to bolster the middle class, told reporters before a meeting with Obama’s economic advisers today. Transition officials are “getting very close” to an agreement with lawmakers on the size of the stimulus, Biden said.

Below Estimates

The Realtors’ figures showed home resales, including condos, fell 8.6 percent to an annual rate of 4.49 million, below all but one estimate in a Bloomberg News survey of 63 economists. The median resale price dropped to $181,300.

Separately, the Commerce Department reported that new- home

 

I don’t have a crystal ball

Trickster

I don’t have a crystal ball, but my forecasts have been fairly accurate and quite profitable over the past few years. While 2008 has been a tough year, all signs point to 2009 being much worse. Here is what I see on the horizon for the upcoming year.

1) The stock market decline will accelerate in 2009, with the Dow Jones Industrial Average dipping below 6,000. Extreme volatility will engulf the markets with plenty of counter-trend rallies that will be fueled by speculators “calling the bottom,” only to find a new bottom the following month.

2) Unemployment will rise dramatically as “official” statistics reach towards 10% and true unemployment rises closer to 20%.

3) Real estate prices will continue to drop as rates reset and foreclosures increase across the country. Commercial real estate will finally follow residential, as price declines accelerate due to foreclosures on shopping malls, retail outlets, office buildings, etc.

4) Bailouts will continue, with more industries lining up for government rescue packages and both the financial and auto industries returning to the trough for more of their fix. This will lead to prediction #5.

5) Deflation will subdue and the first signs of hyperinflation will appear in the back half of 2009 as the trillions in bailout dollars begin to flow into the economy. The price declines that are a result of liquidation and de-leveraging, will give way to skyrocketing prices as politicians continue trying to print and borrow our way out of bad times. This will lead to prediction #6.

6) The dollar will resume its downtrend and make new lows during the first half of 2009. This will continue throughout the year with the dollar reaching into the low 60’s as the world loses confidence in the U.S. currency and the U.S. government’s ability to repay its debt.

7) Oil will rise from current lows and find a “fair price” somewhere in the $75 – $100 range, where it will float for much of the year. This will benefit alternative energy companies, although any gains will be muted by credit contraction and the overall market decline.

Agriculture prices will return to an uptrend as declining investment and unpredictable weather patterns lead to supply shortages amidst an ever-expanding population and increase in inflation.

9) Gold will make a new all-time (nominal) high reaching a price of $1,400 or more during 2009. A panicked flight to safety could push gold towards $2,000, although the central banks will dump gold on the market or make other attempts at suppressing the price advance.

10) All of the above will lead to increased crime and civil unrest with protests in the streets, bank runs and an increased police and military presence trying to bring stability to cities.

I wish that my predictions were a bit more uplifting, but we are truly in dire straits with conditions only continuing to worsen. The United States is essentially bankrupt and running on borrowed money and borrowed time. Many Americans will be facing severe financial hardship for the first time in their lives.

The silver lining is that these conditions are necessary to shake our apathy, demand better from our government, our community and ourselves. It is tough medicine, but is a necessary prescription that will force the change that is needed in this country and the world. We have to hit rock bottom, feel hardship, liquidate excesses and rampant corruption from the system, restructure our government, economy and entire social system. It is not going to be a pleasant undertaking but I am optimistic that we will emerge with a much better world and way of life.

In the meantime, you should be doing everything you can to stay informed, protect your assets and prepare for the transition ahead. I caution my readers not to be suckered into so called “buying opportunities” as we are nowhere near the bottom and I don’t anticipate conditions will improve for at least another 3-5 years. If you want to know the specific investments that I am making and receive my monthly newsletter, consider the premium subscription service.

Those with metaphysical inclinations may also be interested to know that the 3-5 year time horizon forecasts that we reach a bottom somewhere around the year 2012. Dec 21st of 2012 is the end of the long count of the Mayan calendar which started 5,125 years ago and coincides with the first time in approximately 26,000 years that the Sun will rise to conjunct the intersection of the Milky Way (eye, heart, center) and the ecliptic plane. According to the ancient Maya, this date will mark the end of one world as we know it and the beginning of another. No matter your beliefs, we are in for a period of significant change that will require reflection, adjustment and adaptation to a very different world that awaits.

 

What is Predatory Lending?

Wherever there is a pool of low-income homeowners or other groups of individuals who are financially vulnerable, the potential for greedy mortgage companies or con-artists to step in looms large. While the actions of these companies may not always be illegal, the result can be the same: the homeowners may lose their home and the professionals who supposedly ‘helped them’ end up profiting. These helpers are predators – seeking their prey from the elderly, the sick, the poor. Predatory lending practices can leave victims homeless and defeated, stripped of self-respect and hope, their credit ruined.

The definition of predatory lending involves who really benefits in the mortgage transaction. The fact that the homeowner does NOT benefit is what turns a legal mortgage into a predatory lending practice which can and should be reported. There are many resources where one can report mortgage fraud and predatory lending. If uncertain whether a mortgage action is legal, or actually fraud or a form of predatory lending, then one should still report it and find out for sure. In many cases only a fine line divides actual fraud from an ethical and legal transaction.

Steering & Coercing
Predatory Lenders use quite a number of different abusive practices when putting together a subprime loan. The possible targets for these practices are the elderly, low-income, or minority homeowners who, in many cases, would actually qualify for a regular prime loan. Fannie Mae estimates that possibly up to 50% of the subprime refinanced loans could have been prime loans – saving the borrowers thousands of dollars in fees and interest rates. The abuse of subprime loans in minority neighborhoods is evidenced by a government study in an African-American neighborhood showing over 51% of the refinanced mortgages being subprime, compared to only 9% in predominantly white neighborhoods. Borrowers are often subjected to very aggressive sales tactics to steer them or coerce them into refinancing when it isn’t in their best interest. Many states are attempting to set up predatory lending laws to avert this type of activity.

Excessive Fees
A refinanced mortgage can be packed with excessive fees and/or unnecessary fees. A regular mortgage usually will have loan fees below 1% of the total loan amount. A predatory mortgage can have loan fees in excess of 5%. These excessive costs are tucked into the loan amount so the lender can easily disguise them, and these fees can put thousands of the homeowner’s dollars into the predator’s pockets. This practice falls within the definition of predatory lending.

Insurance and Other Unnecessary Products
Predators often add insurance and other unnecessary products to the loan amount. The insurance they either insist on or intimidate the borrower into buying can include regular mortgage insurance, fire and hazard insurance, life insurance, disability insurance, homeowner’s insurance, and health insurance. The insurance can be extended to include all family members, not just the borrowers themselves. The premium for these items is also added onto the loan amount where the cost is not easily spotted by the borrower. And, of course, the predator earns large commissions every year on the premiums paid. A variation of this happens when three or five years of premium are paid in advance.

Abusive and Abnormal Prepayment Penalties
Only about 2% of normal conventional mortgages have a prepayment penalty that might be difficult to meet. Up to 80% of subprime mortgage have an abusive prepayment penalty. Why? This is one more way the predators can gouge an unsuspecting homeowner. The prepayment penalty is a fee the lender requires the borrower to pay if the borrower should pay off the mortgage loan early. The subprime borrower usually has less-than-perfect credit when originally taking out the mortgage, and the prepayment penalty is hidden in the fine print. Over the next few years the borrowers may manage to improve their credit and want to obtain a new mortgage that has lower interest and lower payments. However, the prepayment penalty on the original mortgage (which often equals 5% of the original loan) is so high that it eats up any equity the homeowners have built up and can even leave them owing more money. Homeowners often are trapped into keeping the original, high-interest mortgage. This is also another case where the lender gives a kickback to the mortgage broker for helping to include the high prepayment penalty in the mortgage. In the future, when the homeowner has to pay the prepayment penalty, the mortgage broker pockets more money.

Because the predators using high prepayment penalties channel the borrowers into subprime loans, the honest conventional lenders lose a great deal of prime loan business. This indirectly affects the fees they need to charge their regular prime borrowers. Everyone loses when predatory lenders have their way.

Loan Flipping
Another form of predatory lending practices occurs when Con-Artists find a homeowner whom they can talk or coerce into refinancing their mortgage, even though the homeowner gains nothing from the transaction. The process is called loan flipping. While the transaction might put a few thousand dollars into the homeowner’s bank account, this amount is easily eaten up by the excessive fees, higher interest rate, and prepayment penalties of the new mortgage. A serious danger with loan flipping occurs when a balloon payment is inserted into the fine print. While the homeowners originally may have had twenty or thirty years to pay on the mortgage, under the loan flipping they might be signing for a two, three, or five year balloon payment. At the end of that time they need to find a way to refinance the house again or lose it completely. Of course, the ‘expert Con-Artists’ will be only to glad to do another loan flip and refinance it for them – once again pocketing thousands of dollars in the process and leaving the homeowner with even less equity in the property than before.

Mandatory Arbitration
Another practice that falls within the definition of predatory lending happens when a lender hides words in the fine print that make it illegal for the homeowner to take legal action against the lender. The borrowers sign away their rights to sue the lender for any fraud, predatory actions or illegal actions. The only right the borrowers have is to take their grievances to arbitration. The arbitration process is totally in the hands of the lenders, usually conducted in secret without the borrowers having adequate representation. Although the borrowers can usually have legal counsel, they find it difficult to find anyone who will represent them because the lawyers are not guaranteed payment of their fees in arbitration like they are in court. Many arbitration cases are handled over the phone and when a small individual is pitted against a large corporation and the proceedings are confidential with no stenographic or written record of the facts, the borrower is at a true disadvantage. Most arbitration decisions are binding and the borrowers cannot appeal them.

More than 50% of the lenders are now including mandatory arbitration in their loan documents, and the borrowers remain unaware of the implications. Lenders favor arbitration because it eliminates a borrower’s rights to do a class-action suit against the lender. The Fair Credit Reporting Act and the Truth in Lending Act have no bearing in an arbitration situation, only if one can go to court. And, some lenders keep their right to go to court but prohibit the borrower from doing so. The fees for arbitration can also be more expensive than filing a small claims court suit. Overall, the borrowers who sign a mandatory arbitration contract are bound to a very lopsided arrangement that rarely is in their best interest.

The major arbitration administrators that a borrower can utilize are the National Arbitration Forum, the American Arbitration Association (ADR), and Jams Endispute.

Predatory Lending Laws
Predatory lending laws are slowly being integrated into the legal systems of the federal government and the individual states. More than 35 states have already placed a legal limit on the maximum prepayment penalty that a homeowner should have to pay, and over half of the states have taken steps to limit predatory lending practices during the last five years. While the definition of predatory lending varies in each state, the awareness that individual citizens need to be protected by predatory lending laws is growing.

As more and more homeowners become aware that they have the right to report mortgage fraud and predatory lending, and policy makers, consumer advocates and civil rights leaders take stronger action against the Con-Artists specializing in predatory lending practices, then the elderly, minorities and those with less income are less likely to be prey for predators. Politicians on every level are becoming more aware of the need for predatory lending laws as the Con-Artists multiply, ultimately costing citizens billions of dollars. Organizations like the Center for Responsible Lending, the National Association of Mortgage Brokers, the Mortgage Bankers Association (MBA), and the American Bar Association actively work to promote predatory lending laws. They also know that educating the public is one of the strongest deterrents to mortgage fraud and predatory lending practices. These organizations are committed to providing this education.

Take a break,listen to some music

Greenspan: “Shocked Disbelief”

It marks the end of an era. Alan Greenspan, the maestro, defender of the market fundamentalist faith, champion of deregulation, celebrator of exotic banking inventions, admitted Thursday in a hearing before Rep. Henry Waxman’s House Committee and Oversight and Government Reform that he got it wrong.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he said.

As to the fantasy that banks could regulate themselves, that markets self-correct, that modern risk management enforced prudence: “The whole intellectual edifice, however, collapsed in the summer of last year.”

Greenspan spurned the Republican acolytes trying desperately to defend the faith and blame the crisis on the Community Reinvestment Act and the powerful lobby of poor people who forced powerless banks to do reckless things. Greenspan dismissed that goofiness in response to a question from one of its right-wing purveyors, Rep. Todd Platts, R-Pa., noting that subprime loans grew to a crisis only as the unregulated shadow financial system securitized mortgages, marketed them across the world, and pressured brokers to lower standards to generate a larger supply to meet the demand. Private greed, not public good, caused this catastrophe:

“The evidence now suggests, but only in retrospect, that this market evolved in a manner which if there were no securitization, it would have been a much smaller problem and, indeed, very unlikely to have taken on the dimensions that it did. It wasn’t until the securitization became a significant factor, which doesn’t occur until 2005, that you got this huge increase in demand for subprime loans, because remember that without securitization, there would not have been a single subprime mortgage held outside of the United States, that it’s the opening up of this market which created a huge demand from abroad for subprime mortgages as embodied in mortgage-backed securities”.

But having admitted the failure of his faith, Greenspan could not abandon it. Credit default swaps had to be “restrained,” he admitted. Those who create mortgages should be mandated to retain a piece of them to insure responsible lending. Otherwise, the old faith still applied. No new regulations were needed, because the markets “for the indefinite future will be far more restrained than would any currently contemplated new regulatory regime.”

Now hung over from their bender, the banks could be depended upon to remain sober “for the indefinite future.” Or until taxpayers’ money relieves their headaches, and they are free to party once more.