Yves Smith asked that this be cross-posted and I am happy to do it.  

I’m certainly not going to write about it.  I haven’t even read her piece yet and I’m not sure I’m going to.  But, by all means, feel free.  Click link below to read the rest on Yves’ site.  I can’t do what she does and respond to this stuff with thoughtful and indignant outrage.

Here’s the deal… I wrote a year ago when the whole AG/banker political circus started that I was not going to follow it, not going to write about it, and certainly not care about it.  It was a colossal waste of time by childlike participants who set out to embarrass themselves and succeeded.  Now everyone is upset that it didn’t turn out to be more.  Why?  It’s to be ignored… unless anyone feels like wagering on any of its promises, in which case, I’m your huckleberry and we should talk.

Remember how the whole thing started… AGs: We want $30 billion.  Banks: No, $5 billion.  AGs: okay $20 billion. Banks: No, $10 billion.  AGs: $20 billion.  Banks: $10 billion. 20… 10… 20… 10… 20… 10…

Like watching two 9 year olds.  No math involved.  Just a stupid tug of war over nothing.  Might as well have set the $20 BILLION ON FIRE!  That’s not a joke, I mean it… set it on fire for all the impact it will have… assuming it ever gets spent, and I’ll bet a whole bunch that unless the money is going to banks, it’s not getting spent.

Remember HAMP was to be $75 billion… then reduced to $50 billion… then reduced to $37 billion.  And we spent $2.4 billion and essentially all of that went to servicers.  Oh, but I’m sure the money is going to be handled very efficiently.  Just watching the jockeying is enough to turn my stomach.  Children… badly behaved children.  And Obama you have the leadership skills of a gerbil, the instincts towards transparency of a criminal. How dare you trumpet this as a success… treat the American people like their idiots… you should be ashamed.

Sorry, it’s Yves time…

Mandelman out.

The Top Twelve Reasons Why You Should Hate the Mortgage Settlement

1. Press Release | 3rd Annual Rally in Tally National Foreclosure Awareness Day February 16, 2012
2. Rally in Tally | National Foreclosure Awareness Day Febuary 16, 2012
3. “Rally in Tally”- Lawyers for Homeowner’s Rights Rally in Tallahassee

1. KABABABOOOOM! | Lender Processing Services’ DOCX, Lorraine O. Brown, Indicted on Criminal Forgery Charges
2. Fraud Digest | DocX, LLC., a Subsidiary of Lender Processing Services (“LPS”) & Lorraine O. Brown Indicted on Criminal Forgery Charges
3. Opinion Journal: Making a Mortgage Disaster with Gretchen Morgenson and Joshua Rosner VIDEO

1. Enough is Enough – Owners Stop Paying Mortgages, and Stop Fretting
2. Report | WALL STREET AND THE FINANCIAL CRISIS: Anatomy of a Financial Collapse
3. Fraudclosure | New York AG Investigates Banks’ Role in Financial Crisis

1. Enough is Enough – Owners Stop Paying Mortgages, and Stop Fretting
2. Report | WALL STREET AND THE FINANCIAL CRISIS: Anatomy of a Financial Collapse
3. Fraudclosure | New York AG Investigates Banks’ Role in Financial Crisis

1. Must View Video | William K Black Speech RE Wall Street Crimes
2. Bank of America Harasses Widow During Husband’s Wake Making Repeated Dunning Calls to a Speaker Phone Set Up for Condolences
3. MATT WEIDNER | WAKE UP AMERICA… TIME TO START PAYING ATTENTION AND DOING SOMETHING! (VIDEO)

It’s an issue that begs to be turned into a riddle, such as…  Who lives hopelessly underwater and in the desert at the same time?

Answer: Arizona’s homeowners.

Over this past year, Arizona State Senator Michelle Reagan (R) began a careful study of what appeared to be some very frightening numbers about her home state, but she was never willing to view them as a fait accompli.

“In Arizona we don’t ignore problems, nor do we pretend they aren’t there,” Sen. Reagan explains.  “Obviously, the federal programs aren’t going to address our state’s needs, and that’s fine.  We’re perfectly capable of doing what’s best for Arizona.”  

This past week Sen. Reagan brought her historically significant solution bill, SB 1451, to the Arizona State Senate.

According to CoreLogic, as of the third quarter of last year, more than 50 percent of Arizona’s homeowners were underwater, meaning they owed more on their mortgage than their homes were worth… 52 percent, to be specific.

If that weren’t bad enough, according to the latest Case-Schiller survey, which uses data from the Federal Housing Finance Agency (“FHFA”), by the third quarter of 2012, home prices in the Phoenix metro area are expected to drop another 9.6 percent, and the same study shows an additional 3.4 percent drop a year after that.

And the really frightening thing about such forecasts is that for at the last four or five years, the actual numbers have, in all cases, exceeded forecasted amounts.  The reverse is never true.

Now, run a tape on all that and you’ll be looking at 65 percent of Arizona homeowners being underwater by the third quarter of 2013, then add in the eight percent or so to account for the homeowners “effectively underwater,” meaning they would be underwater were real estate sales commissions and the like factored in, and we’re talking about well over 70 percent of Arizona homeowners underwater within a couple of years, which is to say nothing of the amounts involved.  Recently, one Arizona homeowner wrote to me about the sale of a home across the street from his for $310,000.  He was very upset.  His mortgage, I later learned, was $860,000.

Why hadn’t he just walked away, was my immediate question.  His response was the his adjustable rate mortgage had been reduced annually and was now at 2.25 percent.  Were interest rates to rise even to five percent and he’d be out of there in no time flat.

Want to know why there aren’t more strategic defaulters in places like Phoenix, AZ?  Now you know.

So, what’s the federal government’s response to the soggy situation?  Well, last fall the Obama Administration loosened restrictions on the HARP program, so now it can be used to refinance your home no matter how far it’s underwater… 100 percent, 200 percent… 300 percent… it doesn’t matter.  Of course, you’ll still be just as underwater as you were before, but you might shave a point or two off your interest rate, which might save you a couple hundred bucks a month… maybe.

Not surprisingly, the new HARP program has not exactly taken off like gangbusters in Arizona or anywhere else for that matter.  And just imagining someone signing a promissory note that obligates one to pay an amount two or three times the market value of  the property, will give you an idea why it doesn’t happen all that often.

Moody’s now pegs Arizona’s recovery in the housing markets at 2034, without adjusting for inflation.  One might as well have forecasted recovery as coming… never.  When 70 percent of a housing market is underwater, and recognizing that under normal circumstances at least two-thirds of home buyers are also home sellers, it’s easy to see that future demand will look nothing like demand seen in past years.

More homeowners realizing they are hopelessly underwater and walking away would seem a certainty.  Costs associated with foreclosed homes being incurred by the state are mounting beyond all previous forecasts and the resulting state budget deficits are becoming increasingly difficult to close.  By 2013, many state economies will be caught up in negative feedback loops that will prevent recovery as, for example, requisite budget cuts and tax increases further surpress consumer spending.

Foreclosures breed foreclosures…

So, after five years of being told that next year would be better… Sen. Reagan had enough.

First, she set out to learn everything about the economic meltdown and the situation related to foreclosures and underwater homes, and once she understood the dynamics, she set out to find a way to free homeowners in her home state from the downward spiral in which they were clearly locked, because she came to understand that otherwise the state’s future could only be bleak.  She assembled a team of experts in various disciplines and the result is found in Senate Bill 1451, The Housing Finance Reform Act of 2012.

I like to refer to it as… Raising Arizona… or, sometimes as, “The shot heard ’round the world.”  You’ll see why soon enough.

Senator Reagan’s bill represents BREAKTHROUGH THINKING as far as solutions to the housing crisis are concerned.  To be blunt, there’s been nothing like it proposed anywhere as yet, nothing close… but that’s not going to be the case for long… already other state legislatures are taking a close look.

Want a little taste?  How’s this just for starters… 

• Writes down mortgage balances for Arizona homeowners to up to 125% of  current market value.
• Lowers monthly mortgage payment by at least 33%.
• NO COST to taxpayers, not a dime.
• No credit score requirement, borrower must be current on mortgage or be able to bring loan current.

But, I’m not going to spoil it for you… CLICK PLAY BELOW and listen in on the conversation with Senator Michelle Reagan, along with key members of her team, Ira Hecht, Steve Kravitz and of course, yours truly, as we talk all about… what the bill is all about.  

(You’ll also find a copy of the bill below.)  

Mandelman out.

*******

ATTENTION ARIZONA HOMEOWNERS…

IF YOU WANT IT, YOU HAVE TO SPEAK OUT!

Sen. Reagan NEEDS YOUR SUPPORT to get this revolutionary mortgage financing bill passed into law.  It’s crucial that you email your state representatives and tell them how important this bill is to your life and your future.

To find email addresses for your state assembly and senate representatives…

 CLICK HERE. 

It’s easy and only takes a few seconds, I promise.

AZ Housing Finance Reform Act Bill

Uh oh.

Awfully thoughtful of the Times to toss this grenade in his lap just hours before Nevadans head out to caucus. Then again, what’s the worst that can happen? He loses by 30 points instead of 25? You know who this benefits? Once he became speaker in 1995, Mr. Gingrich’s support loomed large as the companies [...]

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Buying votes?

We got a big hint of this new proposal from Barack Obama in last week’s State of the Union message, and now Obama has rolled out his proposal to accelerate mortgage refinancing to bolster the housing market. However, it has at least one poison pill that will make it nearly impossible to get Congress to [...]

View the video »

1. Nevada Attorney General Masto Files 606 Count Criminal Indictment Against Two Lender Processing Services Officers
2. LPS Complaint | State of Nevada vs Lender Processing Services, Fidelity National, DOCX
3. Lender Processing Services (LPS) Responds to Nevada Attorney General Criminal Indictments

1. Nevada Attorney General Masto Files 606 Count Criminal Indictment Against Two Lender Processing Services Officers
2. LPS Complaint | State of Nevada vs Lender Processing Services, Fidelity National, DOCX
3. Lender Processing Services (LPS) Responds to Nevada Attorney General Criminal Indictments

1. Freddie Mac Seek $6 Billion of Treasury Aid After Executives Get Big Cash Bonuses (MILLIONS)
2. NY Times | Banks Want Pieces of Fannie-Freddie Pie
3. Fannie Mae Begs Treasury for $7.8 Billion MORE to Stay Afloat After HUGE Bonuses Given to Executives

1. Freddie Mac Seek $6 Billion of Treasury Aid After Executives Get Big Cash Bonuses (MILLIONS)
2. NY Times | Banks Want Pieces of Fannie-Freddie Pie
3. Fannie Mae Begs Treasury for $7.8 Billion MORE to Stay Afloat After HUGE Bonuses Given to Executives

1. Rally in Tally | National Foreclosure Awareness Day Febuary 16, 2012
2. “Rally in Tally”- Lawyers for Homeowner’s Rights Rally in Tallahassee
3. Fraudclosure | Second Annual RALLY IN TALLY! Participate! Get involved!

1. Kicked Out | Effective Immediately, New York Attorney General, Eric T. Schneiderman, has Been Removed from the Executive Committee of the Robosigning Multistate
2. AUDIO | California’s Attorney General Kamala Harris on Fraudclosure Settlement
3. Mortgage Electronic Registraton System (MERS) Subpoenaed by NY Attorney General Eric Schneiderman

1. More Zombie Debt | Deficiency Judgments for Unpaid Condo Fees and Unsatisfied Mortgages Come Back to Haunt Past Owners
2. Fannie and Freddie’s Regulator Opposes Reducing Mortgages for Struggling Homeowners
3. Bank of America Defrauded Homeowners About Tax Benefits of Mortgages, Says Lawsuit Filed by MIFSP

1. Naked Capitalism | Banks Win Again: Weak Mortgage Settlement Proposal Undermined by Phony Consent Decrees
2. David Dayen | The Schneiderman Gambit: Financial Fraud Unit Appears Designed to Fail, and Grease Skids for Foreclosure Fraud Settlement
3. Naked Capitalism | Mortgage Settlement Term Sheet: Bailout as Reward for Institutionalized Fraud

1. Hacker Collective Anonymous Issues Open Letter To Citizens Of The United States
2. Matt Weidner | The Bigger Picture, The Real Truth About What Foreclosure Means
3. Daily Finance | What the Mortgage Mess Settlement Proposal Really Means

1. Tammy Baldwin WI Stands Up for Middle Class Homeowners, Tells Holder Consumers Must Have Path to Recover Losses
2. Settlement FAIL | Banks Get Edge in Talks on Foreclosure Penalties as Feds Settle
3. Arkansas | Hot Springs County Clerk Mayme Brown Sues Mortgage Electronic Registration System (MERS) Banks for Tax (Filing Fee) Evasion

1. Kim v. JP Morgan Chase Bank | Court Sets Aside Foreclosure Sale Where Assignee Of Mortgage Failed To Record Its Interest Prior To Sale
2. Complaint | RICO Case Against JP Morgan/Chase – LINDA ZIMMERMAN V JPMORGAN CHASE BANK NA
3. Case Unsealed | IRVING H. PICARD, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, Plaintiff, v. JPMORGAN CHASE & CO., JPMORGAN CHASE BANK, N.A., J.P. MORGAN SECURITIES LLC, and J.P. MORGAN SECURITIES LTD

1. MTD Denied | FDIC has to Face a $10 Billion Lawsuit Tied to the Failure of Washington Mutual Bank
2. BAM! | FDIC OBJECTS TO BANK OF AMERICA’S $8.5 BILLION MORTGAGE SETTLEMENT
3. F.D.I.C. Approves ‘Too Big to Fail’ Plan, Looks for Public Comments

1. Naked Capitalism | Obama Pressing for a “Shock and Awe” Mortgage Mod Program, 3 Million in 6 Months
2. Naked Capitalism | Corrupt Obama Administration Pressuring New York Attorney General to Support Mortgage Whitewash
3. CNN Headliner | How to rescue the housing market: Foreclosures! Experts say it’s time to push delinquent borrowers through the foreclosure process

1. Florida 4th DCA Reverses Final Judgement Ruling – Elliott v. Aurora Loan Services
2. Wells Fargo Home Occupancy Inspector Beats Homeowner With Sledge Hammer – Inspector Tells Beaten Man He Was His “Judge, Jury and Executioner” Claims Homeowner
3. Despite Arizona Military Vet’s Proof of Loan Pay-Off, Bank of America Forecloses Anyway and Schedules Auction of His Home of 26 Years

1. Adam Levitin | Ibanez and Securitization Fail
2. Adam Levitin | The Loving and Merciful Act of Foreclosure
3. Adam Levitin | The Multistate Foreclosure Settlement

1. Michael Olenick: NAR’s Big Miss on Home Sales Underscores Lack of Transparency and Accuracy in Mortgage/Housing Data
2. Dig it! Dr. Housing Bubble’s “Shadow Inventory Amegeddon” is a very slick piece
3. CoreLogic: Shadow Inventory Jumps More Than 10 Percent in One Year, Pushing Total Unsold Inventory to 6.3 Million Units

1. Michael Olenick: NAR’s Big Miss on Home Sales Underscores Lack of Transparency and Accuracy in Mortgage/Housing Data
2. Dig it! Dr. Housing Bubble’s “Shadow Inventory Amegeddon” is a very slick piece
3. CoreLogic: Shadow Inventory Jumps More Than 10 Percent in One Year, Pushing Total Unsold Inventory to 6.3 Million Units

1. National Fraudclosure Legislation Introduced | Foreclosure Fraud and Homeowner Abuse Prevention Act
2. Hurry Up! Monthly Foreclosures Need to Double from April’s Record Pace to Clear the Distressed Pipeline – Lets Get Those Deadbeats OUT!
3. Fraudclosure – Marcy Kaptur on Dylan Ratigan, Inside the Country’s Mortgage Mess