The chart, entitled “Dan & Teri Securities Transaction Process Reverse Engineered 4.1,” traces the complex and convoluted path that one mortgage took on the path to securitization. It first appeared on financial blog Zero Hedge. Dan Edstrom — who performs securitization audits for a company called DTC-Systems — spent more than a year reverse-engineering his own family mortgage in order to produce the chart. The US economy depended, during the housing boom, on "speed of execution" in the mass securitization of mortgages. When the banks attempted in 2010 to unwind these mortgages at a matching speed, they were halted by litigation. What comes next is unknown. How does Dan and Teri's model of a mortgage get unwound from the incredible entanglements that nonetheless generated an enormous cash flow, banked long ago. The housing boom-- passed unnoticed by the mainstream press-- energized the advertising revenue of newspapers and TV, including the entire supply chain of land speculators, bankers, and assorted lobbyists and lawyers-- paying for countless college educations, braces, and European vacations. The only criticism one could find: environmentalists who shouted to a deaf nation that wetlands lost and habitats destroyed are much more difficult and vastly more expensive to piece back together once the damage has been done. And in Florida, under the rubric of free enterprise and free markets, a tremendous amount of damage was done. The thieves were crowned kings. The money changers ran the congregations, the churches and the temples. All the while, the US economy moved into a danger zone that any application of common sense would have predicted. So here we are. As far as Miami is concerned, it is an amazement that the same economic elites that caused the local crisis through the massive oversupply of sprawl ("what the market wants") are agitating for lower regulatory thresholds so they can unwind their personal and business debts, formed from speculative investments that are now languishing on bank balance sheets yet still priced to pre-bust values. That's why they need County Commissioner Natacha Seijas and the unreformable majority: for speculators to turn over their debts, unfreezing them through zoning changes even though there is no demand. Meanwhile, most homeowners in debt crises have no idea that the dramas of insolvency do not apply to the large indebted speculators who have a free pass by banks; all colluding to maintain the illusion of stability while drawing big paychecks on balance sheets that are fictions. What to do? Oink.
1 comment:
What an awful mess. I guess most people with mortgages have been securitized and they know nothing about it. Greedy for money, banks bundled them before the ink was dry on the mortgages and sold them to Wall Street. Maybe that is why they did not care if they were good loans or not because they were going to sell them and get their money. If the foreclosure crisis had not come about, we would know nothing about it. Now only the Lord knows who owns title to our mortgages. While the foreclosures have to be cleaned up first, the rest of us need to be cleaned up too because we might want to sell our houses, or pay off the mortgage.
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