Who is actually owed the money on your mortgage and how much is owed? Recently we’ve seen TARP documentation showing a flow of money into mortgage-backed securities.
If large banks like Bank of America routinely foreclose on the wrong house are we sure mortgage payment are going to the correct place?
Is the bank going to indemnify the homeowner from Uncle Sam’s claims when the mortgage is paid off in a short sale or even a simple refi?
– The Bank Slayer
U.S. tax dollars used by Federal Reserve to pay foreign partners of AIG
The New York Fed, led then by Timothy F. Geithner, who is now the Treasury Secretary, “refused to use its considerable leverage,” according to Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report released some time ago.
Just two days before the New York Fed paid A.I.G.’s partners 100 cents on the dollar to tear up their contracts with the insurance giant, one bank volunteered to take a modest haircut — but it never got the chance.
Mary Williams Walsh at the NY Times says that the Federal Reserve Bank of New York gave up much of its power in high-pressure negotiations with the American International Group’s trading partners last year.
Neil Garfied has a great commentary on this piece.
In her article you have the crux of the problem for the investors in mortgage backed securities, for the foreclosing servicers and for aptly named pretender lenders.
What did the taxpayer actually pay for and what did they get for it?
Consider that if all went to pay off credit default swaps at 100 cents on the dollar then are those obligations to be considered paid or still outstanding, due and owing? And if they are still due and owing, to whom?
Whether a home goes to sale at a foreclosure or not we are left with the same problem. To whom is the money owed?
If the Federal Reserve paid off the credit default swaps (READ: insurance) then doesn’t the Federal Reserve has some claim to the underlying asset to which the insurance was applied?
It seem quite clear that one of two scenarios has taken place.
My mortgage which is current is “owned” by the Federal Reserve
When my house which sold at a foreclosure auction bank to the bank should be delivered to the Federal Reserve.
Either way the Fed seems to have a clear claim to the money or the collateral.
http://livinglies.wordpress.com/2009/11/17/audit-faults-new-york-fed-in-a-i-g-bailout/
