Posted on 02/10/2010 2:53:22 PM PST by FromLori
You better be, when the implications of this one ripple through:
McLean, VA – Freddie Mac (NYSE: FRE) announced today that it will purchase substantially all 120 days or more delinquent mortgage loans from the company's related fixed-rate and adjustable-rate (ARM) mortgage Participation Certificate (PC) securities.
What this means is that all the defaulted loans in these packages that Freddie bought up, bundled up and then puked out into the marketplace are coming home.
To Freddie.
Well, at least initially.
But now, every one of these loan files is going to get the fine-tooth-comb treatment. And believe me, there's gonna be a lot of lice found in there, along with more than a few cockroaches.
This is going to be a problem folks, because those loans in which reps and warranties (that is, the promises made to Freddie by the banks when they were sold to them) were breached due to a material falsehood of some sort will be, as a matter of fiduciary responsibility, puked back onto the bank involved.
Note that most of the "warehouse" funded brokers and such are already gone. They went under in 2007 and 2008. They're done.
But those folks got their warehouse lines from the big banks. Countrywide (now BAC), Wells, WaMu (now absorbed), Chase, etc.
Now to be sure not all of these bad loans went bad because of some sort of fraud. Some were made to legitimate borrowers on legitimate terms with everything on the up-and-up - no lies, no schemes, income and assets were as represented, no fraud - but the borrower lost his job and, well, just doesn't have any money.
But I'm willing to bet that a huge percentage of these - likely a majority and perhaps even a supermajority - had some element of fraud in them.
Those, my friends, are headed home, and will land like a millstone around the neck of the bank that tendered them.
Bet on it.
http://www.zerohedge.com/article/obamas-budget-has-one-small-missing-piece-63-trillion-dollars
As I said last night, it’s gonna be a bumpy ride to the bottom.
ping
related
http://www.zerohedge.com/article/obamas-budget-has-one-small-missing-piece-63-trillion-dollars
also you should read this
Just the Ameriquest fraud would fill every jail we have.
How does this fit into all the other things going on?
Bump! Sure wish I knew someplace safe for a few $$$ - and no its not just gold! ;-)
Is that an official White House photo?
Obama gave Freddie and Fannie blank checks a couple of weeks ago. With no strings or requirements to pay it back. I guess you had to read the WSJ to know that. The other news outlets were covering his speech attacking the private banks.
$6.3 million, or $63 trillion ?
Our Government: Spending money like the world is gonna end Feb-11.
To late it ended on Tuesday, January 20, 2009, we just didn’t know it.
Buy treasuries. The yiels sucks but the dollar is still the safe haven currency.
Besides, if the USA actually does fall and cannot meet it’s obligations, it won’t matter where you have your money.
Bump
THIS explains Bernacke’s rate-hike warning...
The government needs to sell a BUNCH OF DEBT, fast...
$6.3 Trillion
>>To late it ended on Tuesday, January 20, 2009, we just didn’t know it.<<
I started saying, in April of 2009, that the US is a dead country walking. Nobody - not even Sarah Palin - can get us out of this mess. It will just have to happen and we can pick up the pieces afterward. And most of the rest of the world is going down with us. Maybe Greece will be first, followed by Spain. Whatever happened to Iceland?
$6.3 TRILLION I think you mean.
ping
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