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Monday, March 5, 2012

Floridians Are About To Get Raped - Again

Posted 2012-03-05 10:01
by Karl Denninger
in Editorial
Ignore this thread  
You'd think that the "nobody committed any crimes" crowd could muscle up some objection to this sort of bill, but it appears they haven't and won't.
Indeed, the very working title of the bill is a fraud -- "The Florida Fair Foreclosure Act."
It is in fact nothing of the sort.
Any time I see a bill that replaces the word "shall" with the word "may" in virtually every instance, and it is almost-impossible to find instances of the opposite, the hair goes up on the back of my neck.  The word shall is an important one in statutory construction, as it imposes hard limits on conduct and leaves no wiggle room, where the word "may" leaves ultimate discretion to people who are, in many cases, unelected and unaccountable.
There is exactly one good thing in this bill which will be trumpeted I'm sure by its apologists -- it purports to limit deficiency judgments (which are allowed in Florida) to an amount that "may not exceed the difference between the judgment amount or, in the case of a short sale, the outstanding debt and the fair market value of the property on the date of sale."
The problem with this alleged "limit" is the words "outstanding debt", not "outstanding principal."  Words matter, you see, and it is the practice of banks and servicers to lard up a foreclosure with junk fees such as force-placed insurance that they themselves own, turning a service not provided into an iron-clad debt with the stroke of a pen.  Then there are process service fees that are 3, 5, even 10 times what you'd actually pay a real process server, and this assumes you got actual service (in many cases we have documented sewer service in this state.)
So in point of fact the very premise of the bill is a fraud, just as are so many other debt-collection schemes, much like Student Loans w[h]ere you start with $20,000 in debt, become delinquent and by the time statutory penalties and fees are added you're suddenly facing a $40,000 bill -- with no way to reduce it.
The bill allegedly also requires foreclosing parties to prove standing, but is silent on any provisions for voiding judgments or imposing civil or criminal penalties for lies.  It thus does nothing of the kind to actually make foreclosures fair, in that false swearing has become the new stock-in-trade among banksters and servicers.  Indeed without this they'd have nothing, as the record shows that an overwhelming number of alleged "transfers" never actually took place -- that is, the so-called "trusts" were empty in the first instance.  Never mind that under the common law principle of equity you can't recover for your harms twice -- this, incidentally, prevents you from suing someone once you've recovered via an insurance payout.  Oh sure, the insurance company might sue to recover what they paid, but the principle of "unjust enrichment" bars you from profiting from a tort -- your recovery is limited to the loss you actually suffered, absent a punitive damage award.
Yet foreclosures have become in many cases punitive damages by other means.  Many of the alleged "losses" were covered by default insurance, overcollateralization or the loss in question was passed to the taxpayer via various bailout programs and scams, and thus has already been covered.  The alleged "real parties at interest" are never forced to show a true and accurate accounting of the losses they allege occurred -- the simple fact that you didn't pay is deemed "enough."
It's not enough, however, in law or equity.  To recover from someone via suit you must have actual monetary loss of some sort and you must be to prove it up.  I can sue you because I think you're ugly, but I can't win any money on that basis.  To win a judgment displacing your property (whether in the form of dollars or otherwise) I must show economic injury.  This basic principle has been lost in the shuffle of claims that "Joe Deadbeat didn't pay" while the snickering banksters have already sucked their "loss" back from the taxpayer and default-swap writer and thus, were they forced to show an actual accounting, would have to admit to they had no economic injury at all.
I know, you'll ask "who paid and where did the money come from?"
Are you really that obtuse?
On January 20th, 2009 the public debt stood at $6.31 trillion.
On February 24th 2012 the public debt stood at $10.68 trillion, or $4.37 trillion more.  By comparison the Social Security and Medicare deficit grew from $4.32 to $4.76 trillion, a paltry $440 billion, or 10% of the back-door bailout to the financial industry.
Incidentally, if you believe that the banksters took all these monstrous losses, then I'm sure you can find them for me on the Fed Z1.  I wish you the best of luck -- the 4th Quarter of 2008 recorded mortgage liability as $10.5 trillion; as of the last read available (2011 Q3) it was $9.88 trillion, or a decrease of $620 billion (about 6% from the time Obama took office, and down 7.3% from the peak in Q1 2008.)
Hmmm..... losses eh?  May I ask where the economic losses actually are and who holds them?  This much is quite certain based on the Fed Z1, if you believe it to be accurate -- the banks, pension funds and others who allege these economic losses in courtrooms across the country never took them, having passed them off to the taxpayer.
If someone ought to be standing in court foreclosing it is you and I, not some bank.
But it's not.
We have become the nation of lies and scams and this "Fair Foreclosure" bill is just the latest iteration of a sad story of the destruction of the Rule of Law in America.  We've become blinded by the promise of political partisans, even those in third parties.
Just this last weekend Gary Johnson, the Libertarian Presidential front-runner, was heard to tell delegates in California that government borrowing was good.  In a day when people had actual brains in their heads and were independent thinkers in a third party (especially the Libertarian Party) such a proclamation would have led to that person being run out of the convention hall with pitchforks and torches, especially when he has repeatedly claimed he will submit a "balanced" budget to Congress.
How do you square a balanced budget with the claim that borrowing is good?  You don't.
But instead of the immediate pitchfork reaction to this display of idiocy that was justly deserved he won the straw poll with more than 70% of the vote!
Not even the Libertarians have remaining within them the will to stand up and demand fiscal responsibility.  Or perhaps the entire California convention was full of people partaking of "medical marijuana" on the convention floor!
Folks, this is a serious time for serious people.  The so-called "MMT" theorists have had their own theories not only mathematically proved bankrupt but empirically they've been proved wrong as well, since were they correct Europe could have resolved Greece's problems by "simply" printing more money and spending it into existence.
But the Euro Zone's construction lays bare the fraud in these schemes and claims, because it forces exposure of the truth -- that all such schemes are nothing more than a tax levied against the people.  In a federation of currency users such as the Euro the person(s) who get financially gang*****d to support the profligate become immediately apparent and cannot be hidden -- in this case, it is the German people who are being asked to impoverish themselves so as to continue to allow the Greeks to spend beyond their means.
Such it is in America too, although we don't see the classifications divided so readily.  The diffusion gives cover to the liars and thieves, but diffusion does not change outcomes -- it simply makes them more difficult to discern prior to attainment of critical mass.
As gas prices rise and food has gone up by 6% over the last year, the premise of "2% inflation" becomes nothing more than a bad joke.  Never mind that even if 2% inflation was maintained (and it never has been) it results in 143% inflation over a working man's life.  When this is coupled to ever-greater levels of debt it appears for a short time that you're getting ahead, much as it did in the 2000s, but the truth is that median family incomes have not moved a millimeter during that time while at the actual inflation rate, close to 3%, the cost of living has gone up by 34% over that same ten years.
For those in the middle class and below a 34% increase in the cost of living against flat wage income is catastrophic, literally rending that average family destitute.  It is worse, by far, than the inflationary impact of the late 1970s and early 1980s.  Papering it over with more and more debt was the path taken in the 2000s, which did nothing more than temporarily hide the impact of the harm done to the American people.
And now, having stolen the money by shifting the liability to the taxpayer, effectively being paid in full, the banksters are going to get the law altered in Florida so they will never have to provide an actual accounting and thus expose the fact that they suffered no loss and are entitled to no recovery.
The "hot money" games will soon end, ladies and gentlemen, not because someone wants them to but because compound functions eventually go vertical, and the debt accumulation in play now is in the process of doing so.
I see a rolling wall cloud on the horizon.

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