"Foreclosuregate"

There exists, if you look in the right places, virtually endless dialogue on the issue of "Foreclosuregate".

Banks have clearly failed to pay attention to the details. The issue is an obscure legal one involving the signatures on affidavits by bank executives at its genesis. Turns out that when a bank attempts to take possession of an asset  in the event of default by a borrower, in 23 states they are forced, by the court, to PROVE that they are legally entitled to do so. Absent the actual title documents asserting their claim banks have often been authorized by the courts to produce an affidavit by a bank executive which contends that he/she has seen the documents in question but cannot produce them. Are you with me so far?

Well, in courthouses all over Florida, and now spreading throughout the fruited plains, attorneys representing evicted homeowners are unraveling MOUNTAINS of evidence of "robosignings", bank executives, lawyers, etc. who are admitting to signing these affidavits with no discovery whatsoever. Some have even admitted to signing thousands of documents per day for months on end!

What does this mean? Well, it means that moments like what happened with the Earl family in Simi Valley, CA. will begin happening with increasing regularity. They simply hired a locksmith, changed the locks, and moved back in to the home from which they had been evicted. On the advice from their attorney, who has considerable evidence of mortgage fraud, they made a stand against the bank while the police stood by as impotent bystanders.

But.... what does it REALLY mean? It means that the banks were willing to go to ANY length to establish legitimate title to the property, up to and including forgery in many cases. So what does THAT mean? That means that the banks have failed to perfect legal claims to the MILLIONS of properties on whom they have mortgages!

This could be the straw that breaks the camels back, so to speak. Think about it. If the banks find themselves awash in trillions, or at least hundreds of billions, worth of uncollateralized debt obligations then they only have a few ways to go. They either pass new laws which waive the legal requirements, beg for yet another federal bailout, or go under.

Are the American people going to stand for ANOTHER bailout? I hope not. Are they going to stand for changing the age old laws which govern property rights (the foundation of our very republic)? I hope not. That leaves one solution, the biggest banks in the U.S. finally collapse. Their assets liquidated and absorbed by regional banks.

I don't know what will eventually happen but I scour the net each for news of the crisis.

When money is nothing but debt, the end game is bankruptcy. The question is: "Who should go broke?"