By Catherine Austin Fitts
I have been listening to commentators criticize the decision by regulators and financial institutions to loosen the terms and conditions in mortgage lending and securitization. The drumbeat thinking is that relaxed terms and conditions were the cause of the fiscal crisis.
This is simply not true. At the time of the bailouts, approximately $8 trillion would have extinguished all the single family mortgages in the country. Consequently, bailouts of over $27 trillion were not designed to deal with mortgages in arrears. They were designed to deal with trillions of mortgages issued on non-existent homes or on homes that had many mortgages on them, fraudulently issued and securitized with derivatives layered on top of that. That is how you get bailouts sufficient to pay off many multiples of ALL the home mortgages in the country.
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The mortgage markets were used to help engineer a financial coup d’etat. In the process, a massive amount of fraud was engineered by the Federal Reserve and the Executive branch working in concert with the NY Fed banks and – before it was over – the entire real estate and financial industry. This was a fraud that enjoyed widespread popularity.
Relaxed lending standards will make it easier for young people to buy homes and to refinance existing mortgages. That is different than introducing massive, systemic fraud.
Perhaps the fear is that relaxed lending standards will make it easier for the US government and its financial agents to engage in criminality. The logic of that, however, underscores the fact that whatever the problem, it is bigger than lending standards.
The US government has failed to publish audited financial statements as required by law since 1995. The latest estimate is over $12 trillion is missing and unaccounted for. Perhaps we should get it back and extinguish all home mortgages and student loan debt in the country.
Looks to me like our real problem is who gets to take vs. who has to borrow.
Related Reading:
FHFA Said to Plan Steps to Ease Lending to Riskier Buyers
Fannie, Freddie Near Deal That Could Boost Mortgage Lending
