US Government’s Foreclosure Scam Is Ignored By
By Ted Newcomen
December 12, 2012 "Information Clearing House" - The ‘lamestream’ media has been both conspicuously and curiously lax at explaining how the US government buys up bailed-out bank’s toxic assets. This is achieved through the home foreclosure process which rewards corrupt & incompetent financial institutions and simultaneously screws working American families who are trying to get a foothold on the affordable housing ladder. For readers benefit this is how the scam works in my particular part of the United States.
A couple of years back I attended a foreclosure auction on the steps of Centreville Courthouse on the Eastern Shore of Maryland. The foreclosed property, a small townhouse just over 4 years old had been vacated by the owner who simply handed in his keys & walked away. The original mortgage holder, Countrywide, was then stuck with the original loan for the home, the missed interest & Escrow payments, and all legal fees etc. Countrywide, as we all know, went out of business and the property was acquired by Bank of America - a recipient of $45 billion in taxpayer TARP funds!
It was fascinating to watch the courthouse foreclosure auction as the bids curiously went well over the fair market price of the property. It was not possible to determine the identities of the bidders but from what I observed they effectively blocked at least one young local couple out of the process. I was totally mystified why anyone would pay so much money for the property, so a couple of weeks later decided to do a little investigating and asked the Clerk of the Courts to see the documentation trail to follow the foreclosure process, and this is what I discovered.
The original over-inflated purchase price for the home paid by the first owner during the housing boom in November 2005 was $212,900, including a mortgage for $170,000. By the time the owner was in default in June of 2009 the outstanding balance owed was still $168,501. By July 2010 this had racked up to $189,993 including missing interest payments, Escrow debits, and unexplained but seemingly very lucrative 'corporate advances' made to the lender. Now remember, this property may have been owned by Bank of America but that is basically the US taxpayer.
The bank then put the home up for auction at the Centreville courthouse where they sold the property for $198,178 (incl.commissions, fees etc). Not only did the bank get back their original loan, but they got enough money to cover all the missed mortgage payments, all their legal fees, and even made a nice little profit on the deal!
I later found out from court documents that the winning bid that paid well over the current fair market price for this home & effectively excluded all local buyers was non other than Freddie Mac. Yes, the government-backed mortgage broker who with its zombie twin Fannie May looks like costing the US taxpayer another $154 billion in handouts before this fiasco is over!
Anyway, the town house then remained empty for months and I lost interest in the outcome. However, a recent follow up investigation reveals that the property was finally put up for sale with a local real estate agent who sold it in July 2011 for $160,000. That’s almost $40,000 less than the figure paid at auction by one government subsidized organization to a government bailed out bank – all done with US taxpayer’s money!
Now think about it – really think about it! All over the USA in hundreds of courthouses, there are thousands, maybe even millions of foreclosed homes that have been sold, or will be sold into a rigged market, by dysfunctional financial institutions to incompetent government backed mortgage brokers.
Here we have the ultimate ‘legal’ scam! The crooked banksters get back all their losses and even make a profit; Freddie Mac makes money on the fees it charges, and working Americans are bid out of buying affordable homes at foreclosure auctions but they still have to borrow money from those same bailed out banks and mortgage brokers when the properties are finally sold in the open market - and its all done with our taxpayer $’s!
I’m no lawyer but surely if ordinary citizens indulged in such price-rigging practices they would be considered unethical if not actually illegal – either a restraint of fair trade or outright fraud? This is crony capitalism on an industrial scale and the results of the recent US elections will change absolutely nothing and nobody in the media is talking about it! Why?
Ted Newcomen is a retired, citizen-journalist who is tired of the ‘lamestream’ media which is obsessed with celebrity culture & just recycles press releases for our corporate masters.