To Protect Sub-prime Borrowers and Nation's Housing Market, NCRC Urges Administration and Congress to Allow FHA to Refinance Loans in Default and Establish a National Rescue Fund
Posted Mar 16, 2007 07:16 PM PST
Category: ECONOMY
This is a repeat of the S&L bailout of the 80s, which was one of the greatest swindles of the American people in history. Under Presidents Reagan and Bush I, the laws were changed that made it easy for S&Ls to invest in high-risk ventures. At the same time, Bush I increased the maximum limit for insured d=savings to $100,000 per account. That set the stage for a huge rip-off of the taxpayers and here is how it worked.
Drug criminals. in many cases working for the CIA's Iran-Contra operation, mixed their drug cash in with legitimate proceeds from cash-heavy front companies such as convenience stores, office supply places, and multi-screen cinemas. That cash was deposited in S&L accounts always under the $100,000 limit.
The criminals would then form a new front company, buy some really crappy real-estate and flip it to run the price up. This is what happened with Whitewater, Castle Grande, Flowerwood, etc.
Then, either with a cooperative appraiser or possibly a compromised officer of the targeted S&L, the front company would borrow out their money using the inflated land as collateral. That money, being the proceeds of a loan, would be tax-free and clean, ready to be spent anywhere in the world.
The front company would close, the loan would default, and the S&L found itself not only with the bad debt and no place to go to collect it, but a piece of land that was not worth anywhere near what was borrowed on it.
So, the S&L collapsed. President Bush came in telling stories about widows and orphans, never mentioning that the vast majority of the involved accounts were numbered and brokered,. and the tax[ayers forked over the cash to make good on the S&L's bad debts.
And here is the punchline. Those drug criminals, the CIA Iran-Contra folks? They were still on the books for their original deposits, so even though they had already borrowed out their money using the land swindle, they were written a chec for their original deposit all over again.
It was a heck of a scam. Minus taxes and commissions this scam could turn 10 million in drug money into 18 million in just 6 months with no risk, and all on the backs of the US Taxpayers. Those RTC officials who looked too closely at the books for the defaulted S&Ls had a habit of falling from very tall buildings.
So, here we go again, only the financial vehicle isn't S&Ls but mortage lenders. But the game si the same. Invest some money, mortgage land for way more than it is worth through a front company, split with that money, then when the mortage company collapses lobby for a "National Rescue Fund" which will pay out the same money a second time, and all on the backs of the US Taxpayers.
Posted Mar 16, 2007 07:16 PM PST
Category: ECONOMY
This is a repeat of the S&L bailout of the 80s, which was one of the greatest swindles of the American people in history. Under Presidents Reagan and Bush I, the laws were changed that made it easy for S&Ls to invest in high-risk ventures. At the same time, Bush I increased the maximum limit for insured d=savings to $100,000 per account. That set the stage for a huge rip-off of the taxpayers and here is how it worked.
Drug criminals. in many cases working for the CIA's Iran-Contra operation, mixed their drug cash in with legitimate proceeds from cash-heavy front companies such as convenience stores, office supply places, and multi-screen cinemas. That cash was deposited in S&L accounts always under the $100,000 limit.
The criminals would then form a new front company, buy some really crappy real-estate and flip it to run the price up. This is what happened with Whitewater, Castle Grande, Flowerwood, etc.
Then, either with a cooperative appraiser or possibly a compromised officer of the targeted S&L, the front company would borrow out their money using the inflated land as collateral. That money, being the proceeds of a loan, would be tax-free and clean, ready to be spent anywhere in the world.
The front company would close, the loan would default, and the S&L found itself not only with the bad debt and no place to go to collect it, but a piece of land that was not worth anywhere near what was borrowed on it.
So, the S&L collapsed. President Bush came in telling stories about widows and orphans, never mentioning that the vast majority of the involved accounts were numbered and brokered,. and the tax[ayers forked over the cash to make good on the S&L's bad debts.
And here is the punchline. Those drug criminals, the CIA Iran-Contra folks? They were still on the books for their original deposits, so even though they had already borrowed out their money using the land swindle, they were written a chec for their original deposit all over again.
It was a heck of a scam. Minus taxes and commissions this scam could turn 10 million in drug money into 18 million in just 6 months with no risk, and all on the backs of the US Taxpayers. Those RTC officials who looked too closely at the books for the defaulted S&Ls had a habit of falling from very tall buildings.
So, here we go again, only the financial vehicle isn't S&Ls but mortage lenders. But the game si the same. Invest some money, mortgage land for way more than it is worth through a front company, split with that money, then when the mortage company collapses lobby for a "National Rescue Fund" which will pay out the same money a second time, and all on the backs of the US Taxpayers.
