Archive for August, 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAOhgVw78e3U
This case has the potential to change so many aspects of our lives. Will the Federal Reserve be permitted to operate in perpetual secrecy? They don’t want to disclose which banks took the loans so that we the people, as investors and economic actors, are misled into doing business, banking and investing in these banks. Look at how the financial sector has led our current stock market rally. Now factor in that we don’t get to know which, if not all, of them are simply zombie banks supported by unsustainable government loans.
When this comes down, it will be the little guy who bears the burden while the people responsible on Wall Street and in Washington laugh and walk away with your money.
We are being subjected to media propaganda encouraging us to get out and spend. Are the boom times back? Well, that is what corporate media is feeding us.
Meanwhile, back at the ranch, corporate insiders are selling their equity holdings at a 53:1 ratio!
http://www.kitco.com/ind/Thomson/aug252009.html
I think that the 401K zombies in middle America are about to be sheared again.
All the talk is about the mortgage crisis, in the meantime the real story is the collapse of the commercial credit market.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aM9Q_6ozzhMU
This is a far larger threat to the economy than the mortgage crisis and no one seems to even notice this while we waste time debating health care we cannot afford any way.
By taking our eye off the real economic disaster unfolding around us, the health care debate has wasted time and concern that should have been focused on averting another catastrophic market collapse.
Mr. Prompt and I began to unravel his Real Estate empire by contacting the people living in the 6 properties. My office assistant, a licensed Realtor, visited each property, some occupied, some vacant and destroyed. The residents of the occupied homes had documents, what is a known as a Contract for Deed, for their home and each thought they owned the property. The agreements were written by the Hill Group and their company named ilovehappyhomes.com and purported to convey ownership to the tenant upon a 6 year payment schedule. Most of these folks had been paying for months, making improvements and planning a future.
I contacted this Hill Group and got to talk to the head Hill himself. He told me that the properties were owned by his company and that they had merely titled them in Mr. Prompts name for financing. When I asked if they had brought Mr. Prompt to a closing when the property was bought, he explained that under their *system* closing was not necessary as all documents were signed with the permission of the *participant*, such as Mr. Prompt. I asked him to provide me some evidence of this agreement between the Hills and Mr. Prompt.
That is when he got nasty. That is when he got a lawyer and sent her after me.
Of course she was aggressive. She was going to put me in my place. She came to my office with a demand that I leave her client and his tenants alone.
I showed her the registered title to the property in Mr. Prompts name. She left. She quit, sent me a nice letter explaining that she had no idea what kind of operation Mr. Hill was running. I still see her now and again at the Court, she asks how Mr. Hill is.
The same day she quit, I get a package from the Hill group containing all the documents for the 6 properties and a letter telling me that they are my problem now. As I look through the file I come to see notice after notice indicating non-payment of mortgages, insurance and taxes.
None of these properties had been paying mortgages, 1sts or 2nds, no insurance, no taxes, nada.
It seems Mr. Hill had discovered a way to reduce his costs; simply ignore all the bills!
So my office assistant and I start tracking down the mortgage companies. Out of 12 mortgages on the 6 properties, 9 of them were written by the now infamous Bear Stearns.
What I learned from Bear Stearns made me realize that they had embraced and embodied their company initials to a ruinous degree. BS was all they had left.
Through a series of calls, we were finally directed to Mr. Ford, the man in charge of the mortgage fraud investigation dept. for Bear Stearns. Mr. Ford asked what we had, and we showed him the ilovehappyhomes.com scheme and the Hill companies behind it.
On that June day, Mr. Ford frightened me.
He told me that he knew all about the Hills. They had done HUNDREDS of homes in North Texas under this scheme. Mr. Ford told me that they had already been in contact with the FBI and that the Hill family was going to be sued by Bear Stearns.
Over the next few days I spoke with Mr. Ford about this case. He told me that the Hills were just one group and that he had files like this all over the country. I asked him what had happened? How had they got to the point where they had so many bogus mortgages.
He told me that the company was out of control. He even told me that he figured the company would not make it through this mess. There were too many bad loans.
This was in July 2007. By September of that year, Mr. Ford was gone. The phones to his dept. all rang fast busy.
Bear Stearns collapsed in public in March of 2008, but I can tell you that the company stopped operating as a viable concern sometime in September of 2007.
What of the property in North Texas?
No one wanted Mr. Prompts 6 properties, not Mr. Prompt, not Bear Stearns, not even the Hills. Many of the tenants remained, rent free, for the next 10 m0nths until the houses were finally foreclosed in the summer of 2008.
To this day, 2 of the properties remain unsold, vacant and not even listed for sale. This mess is not over.
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Opinion and commentary about law and life.