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Rest of the Story: (February 15, 2010 4:56am)

The math on the loan example is correct. Failed bank buyers are getting GREAT deals with the loss share protection offered by the FDIC, but there’s a little more to the story…the FDIC loss share protection essentially limits the maximum credit losses for a buyer to about 10% of the loan principal amount. In order to buy a failed bank, the FDIC must go though a competitive bidding process. Bids have been averaging about 85% of par, thus “locking” in a “profit” of 5% of the loan balance on average. Some buyers have been successful bidding 70 or 75%, thus locking in an even bigger “profit.” BUT…TWO key parts of the puzzle the video doesn’t address are: (1) the buyer must pay for servicing and collecting the loans–many of which are defaulted–which takes a lot of manpower and money; and (2) the FDIC avoids having to do #1 – which saves the FDIC lots of money - this was a huge lesson learned from the S&L crisis. Lastly, the FDIC has NEVER relied on taxpayer money to pay for bank failures.

Saryl: (February 14, 2010 11:02pm)

Great work. I think they also get all kind of fees for going through the foreclosure process. Also the people buying are in a tight syndicate that is difficult to break into. And the bigger banks that are buying the smaller failing banks are buying with our bailout tax money. Also they get a hugh tax credit for doing the buyout so they will not be paying any taxes on this ripoff.

Ronald: (February 14, 2010 10:18pm)

This should piss off every American. Demicrat, Republican, Independant, etc...

Chris: (February 14, 2010 9:33pm)

MM...the same thing happened to my son...they just finished a short sale and less than 3 weeks later they got a 1099 for the dificit amount...they only had one lender "Everhome Mortgage"...may I please email you as well to get help for them?

pissed: (February 14, 2010 8:32pm)

The whole thing is for the bankers, by the bankers and funded by us... democrat or republican, they're all bought and paid for by Banks... Follow the money. Wish I could buy a French citizenship right now.

ProAmerica: (February 14, 2010 7:41pm)

it's [email protected] not mrc@ Adolph looks good compared where all of this BS is going to go...

Pro American: (February 14, 2010 7:39pm)

you have only part of the TRUE agenda... "redistribution of wealth" imcludes YOUR property and LIFE! nrcsaveshomes.org [email protected]

Welder702: (February 14, 2010 7:34pm)

Dogface: I read your comment and I can see you live under Obama's desk. You have no idea what you are talking about and we are all now dumber for reading what you wrote.

BH: (February 14, 2010 7:31pm)

Please see the NY Times article that was just released minutes ago, regarding the FDIC's "Unusual Response" to the video. http://www.nytimes.com/2010/02/15/business/15fdic.html Please notice that OneWest had no comment before the story ran.. Hmmmmmmm... Methinks things might get interesting this week...

MM: (February 14, 2010 7:11pm)

Junie... if that 1099 was for your first mortgage, you shouldn't have gotten one. There's a law in place that is supposed to protect short salers from the deficit tax. If it's your second mortgage, they do have a right to tax. Email me at [email protected] for a source that can provide reliable help for your options.

Mac10: (February 14, 2010 6:54pm)

Dogface 13 is an idiot!

Natter: (February 14, 2010 5:17pm)

DogFace, February 13, is a typical right wing nut. First thing he does is attack the commentators calling them "doughnut eaters". Second attack is on the way the commentator pronounced a name!? Thirdly, and most importantly, he misses the point completely when he refutes that "the new mortgage holders sell it for whatever they want". He says "They sell it for whatever a new buyer IS WILLING TO PAY, which depends on the value of the underlying collateral" HE MISSES THE POINT which is that REGARDLESS OF THE AMOUNT PAID, under the corrupt sweetheart deal given to the One West conspirators, they can't loose - only us tax payers get to do that. Lastly he goes into a neo-con rant about letting the pvt sector manage the money: the same unregulated pvt sector that got us into this mess in the first place. The real problem is the revolving door the fat cats use: one day pvt sector, next day they're sitting in a vital govnmt seat - case in point: Paulson, who gives deals to pals.

Junie: (February 14, 2010 4:40pm)

We had a short sale in September 09 and received a 1099 for the amount of the mortgage minus what the lender received at closing. Now we have to pay taxes on money we didn't get!! Where is the justice in this?

"Sass": (February 14, 2010 4:37pm)

If the FDIC is correct, and the 'Bad-Boyz' in the video were wrong, . . . Then why is the FIDC going broke, despite subsidies/contributions by member banks?

AK-71: (February 14, 2010 4:16pm)

Interesting response from FDIC. They talk of not having paid one penny (in the past tense although the video is about future losses). They also claim that the loss covers 7% of total assets of OneWest. What percent of IndyMac's assets would that be? And they also claim that they have not requested any money from the Treasury Department and that they are not funded by the taxpayers but by the banking industry. That last part is technically true as noted by the person who posted the first comment, but to believe that if FDIC collapses, taxpayers won't be in the picture is a fairy tale.

KdB: (February 14, 2010 3:52pm)

The last report I saw on the FDIC financial status was that they were down to $10 Billion as of Sep 09 as reported by the FDIC Chairman Bair and looking to triple healthy bank premiums. Though they have the $500 Billion option with the U.S. Treasury, the FDIC was not planning to exercise that option as of last year. However, with this year already seeing more bank closures in the same period of 2010 (16) vs 2009 (8), they may have no choice but to go to the Treasury for "virtual money". The year 2009 saw the largest number of bank closures since the Great Depression and much of that was due to the home mortgage debacle. Now the commercial loan debacle is setting in and the number of closures may set a new record.

Anonymous: (February 14, 2010 3:22pm)

The FDIC is insolvent. Why did the FDIC require an increase in its credit limit with the U.S. Treasury to $500 Billion? http://www.calculatedriskblog.com/2009/05/senate-passes-expanded-fdic-credit-line.html The FDIC is just as insolvent as the banks that it insures. It borrows money from the Treasury to pay off depositors and take over the bank. Where does the Treasury get the money? The Treasury sells Treasury notes and bonds to the Federal Reserve Bank (FED). Where does the FED get the money? The FED digitally prints the money via computer. Think I'm misinforming? It's straight from Ben Bernanke's mouth during one of his numerous testimonies before Congress and the Senate. The FED prints the digital money at the speed of light, and then issues orders to the U.S. Mint to print and delivery the physical paper money to one of the FED branches. It's a house of cards waiting for the next puff to blow it all down.

Old Ducker: (February 14, 2010 3:18pm)

Banker, that's ridiculous. Ultimately the FDIC is funded by bank customers.

gr: (February 14, 2010 3:16pm)

Banker, it is sad that smaller, well-run banks have to pay for these idiotic deals. I think the majority of Americans understand, however, that banks make money from their customers, which in most cases, are taxpayers. The basic premise is that when the banks have to pay more for FDIC premiums, they turn around and charge their customers to make up for the added expense. Hence, in the end, the taxpayer will be footing the bill for this.

Banker: (February 14, 2010 3:05pm)

There is just one glaring error in your story. You keep refering to the FDIC payments as coming from taxpayers - which is 100% wrong. The FDIC insurance fund is created from insurance premiums paid by banks, so its the banks who pay their ever increasing FDIC insurance premiums that are getting hosed on these deals. As a banker whose watched his annual FDIC insurance premiums go up from $300,000 in 2008 to $1.2 million in 2009, banks are paying the money into the FDIC insurance fund that is going back out to cover these insane deals. Stop mis-informing the taxpayer, these stupid deals cost them NOTHING!! If anyone should be upset it should be the well run banks out there who are being made to shoulder the burden of stupid deals as you've described. This is a non event for the taxpayer.

LaSoup: (February 14, 2010 1:23pm)

I think we all need to start working together against these banks, mortgage lenders and creditors. The creditor banks (JP Morgan, Citibank, etc.) are doing the exact same thing with credit card debt as others are with mortgages. I'm up against Citibank, and I invite anyone who would like to join me fighting this to please contact me at suse2001-at-yahoo-dot-com. I am not a lawyer or a Fed; just a private individual who cannot sit back and allow this injustice to continue.

Rod: (February 14, 2010 12:17pm)

What are the possibilities of filing a class action suit against these banks? In particular, those who are supposed to be working with customers on loan modifications but continue to delay, mislead, or just ignore requests. Have tried for loan modification on three different occasions, one by a "loan modification help firm", one by me personally contacting the bank, and currently, one by a HUD affiliated, non-profit organization, and constantly, in all 3 cases, hearing "you're qualified", "you're not qualified", "we don't have your paperwork", or "you'll need to refile". Isn't this "delaying tactic, the bank's attempt to make more money, at least against the intention of the President's plan, if not just totally illegal?

ILoveTreker: (February 14, 2010 10:54am)

"Think big work small" Great Job exposing the scheme! I would love to see you expose the deal how JP Morgan Chase STOLE Washington Mutual. For years JPM tried to buy Wamu but it didn't work out. Wamu had a very profitable branch network that JPM wanted bad. I understand that the FDIC hurried the sale by prematurely bringing Wamu down and selling it withing 1 hour to JPM Chase. FDIC owed several favors to JPM CEO DIMON for taking losses off their hands. If Wamu was helped with tarp money and restructuring like CITI and B of A I think they would still be around. I understand that Jamie Dimon is very powerful in high places and very ruthless. JPM has posted lots of profits which is fine with me however, not at the indirect expense of the public. It is almost impossible to get a loan with them. They have a credit card monopoly and if you try to deal with them for help on loans and credit cards they are arrogant and ruthless as their top management.

GerryG: (February 14, 2010 10:48am)

The problem here is the FDIC that sets up this scenario. And we think the government can run health care!

bh: (February 14, 2010 10:09am)

When was the last time you saw the FDIC take the time to release an official press release over a "video gone viral"? A video that wasn't put out by the mainstream media... Has this ever happened to anyone's knowledge? Perhaps there is more to this story than we thought? I mean, come on.... One of the biggest money machines in the world took the time to respond to this video. Just think about it!

oceansu: (February 14, 2010 10:03am)

Isn't it still the post homeowner who has to pay the taxes on the money saved through the short sale?

mthiker: (February 14, 2010 9:09am)

It is too obvious what is going on in the US - an insidious unearned transfer, through the "financial system" and the "health care/insurance system," of assets from those who have less to those who already have much more and control the government more than most can imagine. Pity the grandchildren of the middle and lower classes.

Frank: (February 13, 2010 10:53pm)

As the Wall Street Journal reports this morning, in what are called a "loss-share" agreements, buyers of failed banks are getting billions of dollars in government guarantees to snatch up the bank's bad assets. To entice buyers, the Federal Deposit Insurance Corporation is offering to cover around 80 percent of the losses associated with buying a bank. The result, the WSJ points out, is a massive subsidy to the private equity industry, and a huge risk to the American taxpayer. As bank failures have mounted this year, much has been made of the FDIC's dwindling Deposit Insurance Fund. But, as the WSJ reports, the FDIC's potential risk through loss-share agreements "is about six times the amount remaining in its fund that guarantees consumers' deposits." Though the WSJ doesn't go so far as to say the enormous guarantees are, in fact, sweetheart deals, it's hard to imagine a better scenario for bank buyers. (Except maybe the FDIC offering to guarantee 100 percent of the total losses associated with buying a failed bank.) "The FDIC, assuming its traditional role, brokered a sale of the bank's deposits to BB&T Co

househunter: (February 13, 2010 9:58pm)

@BOB, please share with me what how we can learn more about the Share Loss Agreement and Article 2c. This is crucial information. I'm an agent doing short sales. I just closed one with One West after 14 months. They were transitioning at the time apparently from IndyMac. I will definitely like to use your information for the next deal. You're the only one I've heard of that seemed to have a solution for negotiating similar short sale transactions with them. Please reply to [email protected] I value your advice on this.

FortuneTeller: (February 13, 2010 9:54pm)

Well, it looks like the FDIC press release has quieted the masses, once again. The sheep have all gone back to hiding their head in the head in the sand, now that the master has spoken. Sad, but true. Never mind the fact that the response was less than adequate... It was a response, and should now be taken as the gospel... Keep hiding your head in the sand folks... But remember this video a year from now, when things get even worse than they are today...

DC23: (February 13, 2010 3:00pm)

We were foreclosed on, which took 3-4 years to complete. During that time we tried everything possible to get them to work with us, but they were determined they wanted that house back! Plus, I actually went to the courthouse and pulled the leanholder's paperwork and it was not the same as the people that foreclosed on the home. We knew they had no right to foreclose, but there was little we could do without $30,000 or more. We had already given them $13,000. They would not even give us a payoff!

janielaurel: (February 13, 2010 2:55pm)

having been on the "receiving" end of a foreclosure (illegal), I know how it feels to be screwed. I'm sure they made a ton of $, and if I could figure out a way to get even, I would. thanks for bringing this to the attention of the public at large. the more people who know about this, the happier I will be.

ppbankruptcy atty: (February 13, 2010 1:19pm)

i am a bankruptcy atty in sacto. in my cases, the debtors have 1st dot, fail behind on pymts, file ch 13 to cure arrears, post-petition excrow advances are put into proof of claim to pay over 12 mos, and then they do a escrow analysis and use the same pre-petition escrow advances, this results in a post-petition mortgage payment, debtor cannot afford the increased pymt and gives up resulting in conversion to ch7 and foreclosure...which equals profit

Bob Chapman: (February 13, 2010 1:01pm)

If this is not posted on YuTube - can you do so.

Natter: (February 13, 2010 12:20pm)

I work exclusively in the short sale arena. There's a lot of screwy stuff happening right now. Just closed a deal where, to get the deal done, the first lien-holder COMPELLED buyer to pay it less he had offered! I wish you guys would look at Greentree lending and figure out what's behind their refusal to accept less than 5% of the sale price when they're in 2nd position.

Anonymous: (February 13, 2010 11:35am)

Hey one giant pain, I will be awaiting your continued blog about OneWest and the FDIC lawyers. Who can help in the regulation of all these big banks? What can we do?

Ultra: (February 13, 2010 11:21am)

The couple could not be reached for comment. They have an unlisted phone at the suburban South Euclid address listed on the summons issued to them. Jonathan Entin, a Case Western Reserve University law professor, said the Boyko ruling reflected the increasingly complex nature of mortgages. Entin said the case would send the message that lenders must be better prepared when they go to court to show they have a well defined interest in a property. "It does not mean borrowers are necessarily going to have an out, and I don't think Judge Boyko wrote his order in a way that can fairly be read that way," he said. The pooling of home loans into securities has been a long-standing practice. Some $6.5 trillion of securitized mortgage debt was outstanding at the end of 2006. When a loan goes into a securitization, the note is not sent to the trust and instead shows up as a data transfer. The actual note typically is kept at a separate document repository company. Larry Platt, who specializes in mortgage lending issues at the K&L Gates law firm in New York, downplayed the importance of the ruling. "I think it's scaring more lenders than it needs to. It is

Ultra: (February 13, 2010 11:20am)

In the often complex arena of the sale and pooling of mortgage loans, proof of just who holds a debt can become clouded. Boyko warned Deutsche Bank National Trust on Oct. 10 that he would dismiss the 14 foreclosures it was seeking through his court if proper mortgage ownership documents weren't produced. The judge said the documents filed with the court by the trust only indicated plans to turn over the documentation. Three weeks later, foreclosure actions were dismissed without prejudice, meaning they could be refiled. Boyko noted that institutions seeking foreclosures without proof of ownership "seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally, put to the test, their weak legal arguments compel the court to stop them at the gate." John Gallagher, a Deutsche Bank spokesman in New York, said the Frankfurt, Germany-based Deutsche Bank would not comment in detail on the ruling involving its trust arm, which had depended on a separate servicer to litigate the foreclosures. "The function of the trustee is largely an administrative one; the trust company has no own

Ultra: (February 13, 2010 11:17am)

Federal judge tells trust to show clear mortgage documentation in foreclosures By Thomas J. Sheeran ASSOCIATED PRESS CLEVELAND - A financial company serving as a trustee for securitized mortgages has been rebuffed in its attempt to foreclose on 14 homes. A federal court judge ruled the company didn't provide clear proof of mortgage ownership, questioning a practice that usually goes unchallenged. U.S. District Court Judge Christopher A. Boyko's decision on Oct. 31 in a foreclosure case brought by Los Angeles-based trustee Deutsche Bank National Trust Co. places more responsibilities on players in the secondary mortgage market, where investors acquire and pool mortgages for the investment return. It was unclear what, if any, effect the ruling may have on the increasing pace of foreclosures nationwide. The judge noted that people about to lose a home through a foreclosure typically want to remain in the home or quickly find a new place to live. Boyko said they usually don't challenge the institution to show proof of its right to foreclose. In the often complex arena of the sale and pooling of mortgage loans, proof of just who holds a debt can become cloud

Ultra: (February 13, 2010 11:15am)

There's an organization who claims it has the ability to help you get rid off your mortgage...How legite do you think their claim may be? I have included their website link (Learn more about what you can do about settling/correcting your mortgage at http://livingfreeandclear.com)

One giant pain in the: (February 13, 2010 11:09am)

I am a lawyer in RI. IndyMac, One West and is attorneys try to rape mortgagors in this state everyday. Loan Modifications with this company are impossible unless a lawsuit is filed. The funny part is that if the FDIC is named, it sends a team of lawyers trying to intimidate folks trying to save their homes. I will add more to this after I review my 16 One West files on Monday.

Angel: (February 13, 2010 10:55am)

It's my understanding that any good lawyer can avoid a foreclosure proceeding by simply demanding that the original mortgages and doucuments be produced at trial. It seems that most of these mortgages were sold over and over and that the original paper work is very difficult if not impossible to retrieve

TrainWreckWatcher: (February 13, 2010 10:13am)

Great example of the theft enabled by the FDIC. You should follow this up with the story of how IndyMac failed. NY Senator Schumer wrote an open letter about IndyMac's tenuous financial position sparking a Friday/Saturday run on NY branches. That run spread the following week and then the bank was siezed. Due to the RUN. The interesting this is this ~ an LA hedge fund had access to IndyMacs books because they were considering purchasing the bank. That same hedge fund is alledged to have ties to NY City and important Schumer supporters. The questions: Was Schumer's letter meant to break the camel's back? Did the hedge funds use Schumer? Did Schumer break any state or federal banking laws with his open letter?

solarc60: (February 13, 2010 10:08am)

My brother just had to short sell his house due to lossing his job. After signing the note for part of the difference for the short sell,he now owes income tax on the part the bank did right off.

DogFace: (February 13, 2010 10:05am)

These two bloated, donut eating hosts don't know what they're talking about. First, the guy's name is "Menuchin" not "Munchin" as they pronouced it. If you aren't doing your homework on the names of the players, how can we trust the rest of your facts? Second, they say the new mortgage holders "sell it for whatever they want". WRONG!They sell it for whatever a new buyer IS WILLING TO PAY, which depends on the value of the underlying collateral which some bone-headed banker loaned against at 100% loan-to-value in the first place. Third, why would you want the FDIC or any government agency to be managing mortgages and collections?? You want it in the private sector; buying the mortgage back from the FDIC gets money back to the government for what they paid to bail out the failed bank in the first place. They make money on the investment , which is:PRIVATE SECTOR injecting capital, also known as CAPITALISM.It's this kind of partially informed, populist ranting that is slowing the recovery

letsenjoy53: (February 13, 2010 9:32am)

Let me also say that in order to fully understand how things are, a great deal of research is required. The power elite as many of you refer to them as, have systematic plan to unite the world under one economic system. One World, One Monetary system is the goal. The method of getting there is really pissing me off. The are utilizing deceit, misdirection and feeding us imprecise information to redirect our attention away from their agendas. In essence we have been swept along by events which we should have had the ability to control. Unfortunately those before us forfeited that power to a select few in 1913 when we gave up control of our monetary system. I will try to change that. My name is Sir William L. Calder at [email protected]. Thank you Author, Michael Lindsay for revealing the light at the end of the tunnel.

txmoto: (February 13, 2010 9:14am)

www.daveramsey.com Thanks guys. When is the US taxpayer gonna WAKE THE HELL up? and thrown the bums out?

letsenjoy53: (February 13, 2010 9:13am)

Ladies and Gentlemen, the video definitely explains what the technocrats are doing with their authority, granted by all of us unwittingly, to maintain the monetary system in the hands of those who feel they know what is best. There is only one solution to the problem and Author Michael Lindsay is slowly educating everyone step by step. I've read his book "A Throne Awaits" and was floored. The messages hidden in the story are fabulous, simple and very realistic. His blog www.michaellindsayblog.com leaves no stones unturned. My investigation of the facts shows that removing the authority to create interest debt by the Fed out of thin air stops all the crap that is going on, plus levels the playing field, so this will never happen again.

professor: (February 13, 2010 9:07am)

Do you really think the time will come when the public does not get screwed? We could be here all day discussing " sweetheart deals" This video should be sent to every realtor and short sale lawyer in the country

FDIC Strikes Back "cont - 2": (February 13, 2010 8:58am)

Sorry FDIC, but not only did your press release not refute the video's claims in the least, but you just dug yourself an even deeper grave as every aspiring blogger and investigative reporter will now do everything in their power to find comparable examples of blatant "slap in the face" fraud expecting you to retort to any and all allegations, ensuring 15 minutes of fame for all implicated.

FDIC Strikes Back "cont.": (February 13, 2010 8:57am)

And somehow we are supposed to be comforted by this? A cursory public filing search for OneWest bank reveals no such organization. Maybe while it is denying the validity of the video the FDIC can advise taxpayers where they can get some information on what the correct reserve or loss accrual at OneWest is? Courtesy of the most opaque accounting rules in the history of America, OneWest could have already gotten way beyond the $2.5 billion threshold and is simply waiting for the proper time to spring this to the unwitting FDIC. And as for adhering to HAMP? Would that be the same program that will ultimately benefit less than 1% of US first mortgages due to ridiculous constrains that make the vast majority of participants ineligible? Aside from scoring one for the stupidity of the administration, does the FDIC actually believe that Americans will find this to be a relevant gating issue? Sorry FDIC, but not only did your press release not refute the video's claims in the least, but you just dug yourself an even deeper grave as every aspiring blogger and investigative reporter will now do everything in their power to find comparable examples of blatant "slap in the face&q

FDIC Strikes Back!: (February 13, 2010 8:55am)

A few days ago we posted "The Great Highway Robbery Continues: How the FDIC is Legally Transferring Billions in Taxpayer Money to Hedge Funds" which presented a clip by Think Big Work Small, highlighting what was seemingly a grand scheme to defraud taxpayers with the FDIC's complicity. Today, the FDIC strikes back, issuing a Press Release claiming the video contains "blatantly false claims", "perpetrates other falsehoods" and has "no credibility." The counterargument which is supposed to render all allegations of impropriety false: "OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets" and that "in order to be paid through loss share, OneWest must have adhered to HAMP." Unfortunately, reading between the lines of the response indicates that not only are the falsehoods actually truehoods, but the video is still credible. So to make sure we get this straight. OneWest could have an accrued loss balance of $2.499 billion as of today, and just one more loss will be enough to force the FDIC to make a lump sum payment instead of linear payments? And somehow we a

Anonymous: (February 13, 2010 8:52am)

Willow - that's true but they do have a 500 Billion dollar credit line with the treasury, and recently, in late 2009 the FDIC did say that they may have to tap into it. They haven't done it yet, but it's there.

Willow: (February 13, 2010 8:41am)

It is possible that in this long thread someone already made this comment; however, the video stated that the funds for the FDIC come from the taxpayers. That is not purely correct. The FDIC is an insurance fund into which premiums are paid by the member banks. Of course, ultimately businesses and consumers pay.

Wisteria01: (February 13, 2010 8:39am)

We're dealing with Indymac/One West now. After trying to modify they started foreclosure. After giving us a "reinstatement figure" to get current we paid it. But then they cashed the check andd wouldn't apply it. After we complained to the "Office of Thrift Supervision, Dept of the Treasury, Consumer aaAffairs Division," and they started a case file IndyMac said they applied it and we were current. Treasury closed the case. 2 months later, we've stayed current, back fees (from 2008) and additional lawyer fees appear on the statement. These were all supposed to be covered in the "reinstatement." Now we're trying to reopen the case (have to call it a "rebuttal). How long do you think before they will start foreclosure again, because our payments aren't being applied correctly?

Missy: (February 13, 2010 8:29am)

heyNo smarts, I feel for you dude. Get yourself a good realtor who can drag out the foreclosure as long as possible and live for free, but do not take it out on the home. I am an agent and they are starting to go after people who destroy their homes. As I said below, while everyone is bickering about what is true or not, the bottom line is thehomeowner. You do not ask a homeowner who is distressed and losing wife and home to sign a $75000 promissory note. These bankers and many of them are doing this, have cold hearts.We can only hope to see them in jail where their billions of $$$$ will do them no good. I believe in KARMA. You can not be a nasty cold hearted person and even like yourself. It is more important to take the HIGHROAD and watch the Bernie Madeoffs go to jail.I do have a hard time with those who took out money, 2nds and 3rds and then let the home go to foreclosure AND they take it out on the home.ARE THERE NO MORALS ANYMORE?

BOB : (February 13, 2010 8:10am)

Another thing to think about... I have been involved with 9 or 10 OneWest Short Sales. In each case, they demanded a promissory note, just as they did in this video. In 100% of the cases, when we produced the loss share agreement, along with Article 2C (short sale formula sheet), plugging in the numbers of the deal into the worksheet, OneWest immediately agreed to waive the promissory note, and approved the short sale. So, the question that begs to be asked is.... Why, when faced with the reality of the shared-loss agreement, does OneWest capitulate and agree to waive the prom note and proceed with the short sale? Could there possibly more to this deal that we don't know about? Me thinks so....

bob : (February 13, 2010 8:03am)

Please take note of the play on words by Mr. Gray in the Press Release.."The Loss-share agreement is limited to 7% of the total assets that OneWest SERVICES. Who cares about the loans that they service? The video talks about the loans that they OWN, and the loss share agreement that is associated with these loans.

Hawaii Mom: (February 13, 2010 7:53am)

I've been in the midst of this "financial" devil for nearly 2.5 years now. Couldn't get a loan modification, finally got frustrated enough to walk out the door and leave the keys, with notice to the bank of course...I have more class than that, however, now that the foreclosure sale is complete ($300,000 loan was bought back by Citi for a whopping $87,750 - and this is a condo in Hawaii, not a realistic buy back at all for here), I am being sued for the "balance" of the loan. Hence, bankruptcy was my only alternative, not an easy pill to swallow for someone who has always worked, paid their taxes, contributed to society all of their lives. I don't quite understand where the "help" and/or justice is in the banking business. I have lost all faith.

ab: (February 13, 2010 7:42am)

Hey Gizmo - you might think the video is not an accurate representation - BUT what happened to us is absolutely true (scroll down and look at my "ab" entry about 5 or 6 below). Turns out the people that stole the house to the tune of 60k of taxpayer dollars were working for related Banks in the deal. So if the video is not 100% accurate, the greed and fraud perpetrated on the taxpayers is spot on. AB

Gizmo Williams: (February 13, 2010 7:33am)

Also, remember that most of this is done at a portfolio and not on a loan by loan basis. In most instances...especially foreclosure. The loss is realized in one month and the recovery can occur several months later. So there is a lot of accounting and administration that takes place with a Loss Sharing Arrangement that is glossed over or ignored here. This video is a very poor representation and is not at all what happens in the real world. BTW...I am no fan of the FDIC. Their actions resulted in a personal job loss and a considerable loss of wealth in 2008.

Gizmo Williams: (February 13, 2010 7:21am)

The calculation of the loss and recovery are done independently since they do not happen concurrently. Schedule 2-C is where the loss is calculated. The loss is entered in to Part 1 of Exhibit 1 A. When the assets are disposed of through short sale or auction...the proceeds of the sale are part of Exhibit 1B. At the end of the day, 80% of the short sale price goes to the FDIC and 20% goes to the purchasing bank. This is totally ignored in the video and completely changes the outcome. Further, the use of original loan amount as the basis for calculating the loss is not some sinister plan, either. The purchasing bank pays 70% for 100% of the book value of the asset. The $100K note is still worth $100K. What the bank pays does not change the underlying value of the asset. This video is full of holes and half truths it is ridiculous.

elizabeth: (February 13, 2010 6:44am)

We're trying to refi with ING because we are underwater. Their CFO wrote editorial in WSJ saying they were going to drag their feet because they don't like the federal policy. This really bites!

Q$: (February 13, 2010 6:41am)

great insight....is this scenario true for all lenders? even like wells purchasing wachovia, ect? this scenario true and same with the FDIC for all lenders?

Love my home: (February 13, 2010 6:38am)

C.Schmidt- I totally believe this video. I was turned down for the home loan modification. I've gone thru all my savings trying to stay current, and after 14 years of owning my home and never missing a payment, last month I fell short. I'm now on my way to forclosure. . . REALLY what is the solution to the problem? Voting NO next time will not save me/us now!

Liz: (February 13, 2010 4:22am)

"Is anyone listening out there? ANYONE!!!! Like the people who are supposed to watch out for the average joe one the street!!!" the answer is a resounding NOOOOOOOOOOOOOOOO!!!!!!!!!!!

ab: (February 13, 2010 1:14am)

Think this video is crazy? My indymac story: spring 2008 we are one of several sealed offers on a foreclosed home. We offer asking price at $630.We're told that we lost out - we were 2nd in line. 4 months later, still house hunting, we check the comps on the same neighborhood to see that the house sold/closed for $570!! Yes, folks, we were second to an offer $60K less than we would have Paid (PS, we had $400k to put down, credit scores in high 700's, and pre-qual'd for >$800k mortgage). Now I get why it didn't matter to the bank that they were taking a 60k bath to sell I'm sure to a buyer with "connections". The bank: IndyMac. My letters to every state and federal investigative and enforcement agency: Ignored with "not my jurisdiction" responses. No BS, true story. PS:no regrets, the same house is now worth about $500, but the corruption and greed is unbelievable.

rg: (February 12, 2010 10:23pm)

It's actually quite simple. Just plug the numbers from the video into Exhibit 2c. The numbers don't lie.

rg: (February 12, 2010 10:20pm)

Gizmo, by the way...80% of the recoveries are not netted out. 20% of the recoveries are netted out, as OWB covers 20%, until they reach 2.5 billion (according to the FDIC response tonight). The remaining 80% falls under the 80-95% reimbursement, depending on if they have reached the "threshold". So, this video is not garbage, as you say it is. Plus, please remember that OneWest bought these loans at 70% of Par, and are reimbursed at 80-95% of Par-Sales Price. Not only can they not lose, but they stand to make HUGE profits.

rg: (February 12, 2010 10:09pm)

Gizmo, I'm looking at the same documents, and I'm not coming to the same conclusion as you are. Where do you see a "share" in the loss? Please go to Exhibit 2c and tell us where this theory comes into play.

Gizmo Williams: (February 12, 2010 9:44pm)

The video totally misses some major provisions of loss sharing arrangements which make its conclusions complete garbage. Most notably that the purchasing bank must share recoveries with the FDIC at the same rate as the loss sharing rate. The proceeds from the sale of the property would be filed in the monthly certificate and the 80% of the recoveries would be netted out. While loss sharing is not really down on a loan by loan basis....in this example though 80% of the proceeds from the sale need to be calculated and netted out of the payment to the bank. So OneWest ends up losing money on this particular loan and not making money as the video misrepresent. They lose less than if there was not a loss share in place...but they still lose and not make money. If you look up the loss sharing arrangement at the FDIC website, Exhibit 1B is where the recoveries are calculated and subtracted from the Monthly Loss in Exhibit 1A.

p: (February 12, 2010 9:27pm)

******YOU CAN ALSO READ ALL THE DETAILS,INCLUDING FDIC's RESPONSES TO THIS HUFFINGTON POST INVESTIGATION AND DECIDE FOR YOURSELF WHAT THE TRUTH IS********* "FDIC Chief Got Bank of America Loans While Working On Its Rescue Agency Grants Sheila Bair Retroactive Ethics Waiver on Mortgages" http://huffpostfund.org/stories/2010/01/fdic-chief-got-bank-america-loans-while-working-its-rescue#ixzz0fOHfNayu Under Creative Commons License: Attribution No Derivatives *imho*

p: (February 12, 2010 9:22pm)

YOU MUST READ THIS FROM NEW YORK TIMES ABOUT FDIC's misleading claim to justify their actions in PPIP, offering no-interest, non-recourse loans to private investors at the expense of the actual property or home owners. *******http://www.nytimes.com/2009/04/07/business/07sorkin.html?partner=rss&emc=rss****** There is also TLGP, where the FDIC is backing over $300 billion of bank bonds for Goldman Sachs, JP Morgan, etc and they are claiming it is a money-maker for them because it collected fees. It argues that because none of these banks have failed yet it has NOT COST the FDIC and the implicit tax dollar guarantee A PENNY. It is morally irresponsible to trick average consumers into believing whatever they are doing is justified!*imho*

p: (February 12, 2010 9:20pm)

YOU MUST READ THIS FROM NEW YORK TIMES ABOUT FDIC's misleading claim to justify their actions in PPIP, offering no-interest, non-recourse loans to private investors at the expense of the actual property or home owners. *******http://www.nytimes.com/2009/04/07/business/07sorkin.html?partner=rss&emc=rss****** There is also TLGP, where the FDIC is backing over $300 billion of bank bonds for Goldman Sachs, JP Morgan, etc and they are claiming it is a money-maker for them because it collected fees. It argues that because none of these banks have failed yet it has NOT COST the FDIC and the implicit tax dollar guarantee A PENNY. It is morally irresponsible to trick average consumers into believing whatever they are doing is justified!*imho*

p: (February 12, 2010 9:19pm)

YOU MUST READ THIS FROM NEW YORK TIMES ABOUT FDIC's misleading claim to justify their actions in PPIP, offering no-interest, non-recourse loans to private investors at the expense of the actual property or home owners. *******http://www.nytimes.com/2009/04/07/business/07sorkin.html?partner=rss&emc=rss****** There is also TLGP, where the FDIC is backing over $300 billion of bank bonds for Goldman Sachs, JP Morgan, etc and they are claiming it is a money-maker for them because it collected fees. It argues that because none of these banks have failed yet it has NOT COST the FDIC and the implicit tax dollar guarantee A PENNY. It is morally irresponsible to trick average consumers into believing whatever they are doing is justified!*imho*

Frank Garay: (February 12, 2010 7:28pm)

Rebuttal to FDIC rebuttal: A few days ago we posted "The Great Highway Robbery Continues: How the FDIC is Legally Transferring Billions in Taxpayer Money to Hedge Funds" which presented a clip by Think Big Work Small, highlighting what was seemingly a grand scheme to defraud taxpayers with the FDIC's complicity. Today, the FDIC strikes back, issuing a Press Release claiming the video contains "blatantly false claims", "perpetrates other falsehoods" and has "no credibility." The counterargument which is supposed to render all allegations of impropriety false: "OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets" and that "in order to be paid through loss share, OneWest must have adhered to HAMP." Unfortunately, reading between the lines of the response indicates that not only are the falsehoods actually truehoods, but the video is still credible. So to make sure we get this straight. OneWest could have an accrued loss balance of $2.499 billion as of today, and just one more loss will be enough to force the FDIC to make a lump sum payment instead of linear payments? And somehow we are supposed to be comforted by this? A cursory public filing search for OneWest bank reveals no such organization. Maybe while it is denying the validity of the video the FDIC can advise taxpayers where they can get some information on what the correct reserve or loss accrual at OneWest is? Courtesy of the most opaque accounting rules in the history of America, OneWest could have already gotten way beyond the $2.5 billion threshold and is simply waiting for the proper time to spring this to the unwitting FDIC.

Frank Garay: (February 12, 2010 7:23pm)

Rebuttal to FDIC rebuttal: A few days ago we posted "The Great Highway Robbery Continues: How the FDIC is Legally Transferring Billions in Taxpayer Money to Hedge Funds" which presented a clip by Think Big Work Small, highlighting what was seemingly a grand scheme to defraud taxpayers with the FDIC's complicity. Today, the FDIC strikes back, issuing a Press Release claiming the video contains "blatantly false claims", "perpetrates other falsehoods" and has "no credibility." The counterargument which is supposed to render all allegations of impropriety false: "OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets" and that "in order to be paid through loss share, OneWest must have adhered to HAMP." Unfortunately, reading between the lines of the response indicates that not only are the falsehoods actually truehoods, but the video is still credible. So to make sure we get this straight. OneWest could have an accrued loss balance of $2.499 billion as of today, and just one more loss will be enough to force the FDIC to make a lump sum payment instead of linear payments? And somehow we are supposed to be comforted by this? A cursory public filing search for OneWest bank reveals no such organization. Maybe while it is denying the validity of the video the FDIC can advise taxpayers where they can get some information on what the correct reserve or loss accrual at OneWest is? Courtesy of the most opaque accounting rules in the history of America, OneWest could have already gotten way beyond the $2.5 billion threshold and is simply waiting for the proper time to spring this to the unwitting FDIC.

no smarts: (February 12, 2010 7:22pm)

to Missy- Thank you for the warning. Believe me I would love nothing more than to stay in my home. This idea is out of anger based on how hard I worked for what I have. I have looked at this in a retaliation vs the banking system who received bailout money instead of the people receiving it - then turning around and keeping it for themselves instead of helping us like they were supposed to. And if I have nothing left, what can they take away from me? Give ME prison time for something they can't prove? The bank shareholders should be in prison along with many politicians. An 8th grader could have solved the economy problems better than Obama. I don't want to get started on him because it sounds like you know what that guy is worth.

san juan steve: (February 12, 2010 7:22pm)

your right fred. this whole thing seems to make so much sense. i wish i lived in your world. really?

fred: (February 12, 2010 7:18pm)

Get a life, peeps. The FDIC has nothing to do with taking over banks. Do your homework, only the Federal Reserve can do that, and when they do, bank management and shareholders in the company walk away with diddley-zip-point zero in their pockets.

Missy: (February 12, 2010 7:15pm)

Mike in Alaska; What do you think the bankers would say? Go to the FDIC website and they lay out the FORMULA exactly as the mortgage bankers on the video did. And to the woman criticizing the pronunciation of one of the investor's name. yes you showed us how much smarter you are than the rest of us. That does not make what they were saying wrong OOOPs heaven forbide I would misspell something, that make make it factually wrong

Bob : (February 12, 2010 7:07pm)

Let them come Brian. The fact that they felt compelled to respond, and leave out 90% of the facts in the video is very telling.

brian tbws: (February 12, 2010 6:56pm)

well i guess its happened. they're coming out to attack us.

PF: (February 12, 2010 6:50pm)

Last year there were two attempts in Congress to put foreclosures into the hands of bankruptcy court judges, giving those judges the power to reduce both interest rates and principal. This would have given homeowners the power to negotiate with the banks rather than leave homeowners at the mercy of their lenders. The two bills were voted down thanks to the power of the banking lobby. You should check to see how your Congressperson voted on those bills. If they voted against them then come November vote your Congressperson into retirement.

Missy: (February 12, 2010 6:37pm)

Obama said he will be coming down on the banks. RIGHT, I suppose he will keep that promise just like all his other failed promises. Yes, where did all the idiots come from? I am amazed when people said, "the government will pay for it". You are MORONS and must not pay taxes. You must think money grows on trees, like the Obama administration. VOTE THEM ALL OUT. B.O. is as crooked as the political scene he came from Chicago.

Mike in Alaska: (February 12, 2010 6:31pm)

The American Banker daily newspaper is reporting Friday night that the FDIC is saying this video is factually wrong.

DudeSickle: (February 12, 2010 6:18pm)

Hey Hu Flung Pu, You are an idiot. "Yeah, the taxpayers aren't paying for anything... the government is!" Where the he!! do you think the government gets the money? Oh yeah, the FDIC isn't the government I suppose you will say, too. That explains why all of the idiots in this country like you voted for Obama! DUH!!!

Missy: (February 12, 2010 5:52pm)

hey No Smarts- better think twice about destroying that home. They are coming after people for just that. You will live to regret it

mortgagedatanow.com: (February 12, 2010 5:34pm)

With America, we have watched unfolding events that are threatening to engulf the middle class in a protracted repeat of the Great Depression and effect a massive shift of wealth from property and home-owners to other segments of the economy. We believe this to be a major challenge to the concepts of individual rights and property upon which this country was founded, and something that needs to be opposed by concerted action on the part of property owners whose assets have been, are being, and will otherwise be, stripped from them. The price of freedom is eternal vigilance. What to do? Knowledge is power. How much is the price on your head? We can tell you roughly how much your government will reward your lender to get you out of your house. You need this to know how to deal with your lender effectively, and later your government. If you don't get it from us … get it from someone!

Appraiser67: (February 12, 2010 5:21pm)

Frugalone: As an appraiser for 25 years I would like to say your an idiot. Are you saying that no realtor told their clients to bid more in the boom so they could get the house? What happens when the sale price went up? Did you get paid more commision? Realtors are as bad as the rest of the prople you are blaming. Stop trying to be hollier than thou

Ruthieb: (February 12, 2010 5:08pm)

From FDIC website How does loss sharing work? The FDIC uses two forms of loss sharing. The first is for commercial assets and the other is for residential mortgages. For commercial assets, the agreements typically cover an eight-year period with the first five years for losses and recoveries and the final 3 years for recoveries only. FDIC will reimburse 80 percent of losses incurred by acquirer on covered assets up to a stated threshold amount (generally FDIC's dollar estimate of the total projected losses on loss share assets), with the assuming bank picking up 20 percent. Any losses above the stated threshold amount will be reimbursed at 95 percent of the losses booked by the acquirer. For single family mortgages, the length of the agreements tend to run for 10 years and have the same 80/20 and 95/5 split as the commercial assets. The FDIC provides coverage for four basic loss events: modification, short sale, foreclosure, and charge-off for some second liens.

Sean: (February 12, 2010 5:04pm)

Well, that's not entirely true. FDIC will very soon be taking hundreds of billions of dollars from the taxpayer. Hu Flung Pu, you sound like Paulson and Bernanke and Chris Dodd when they were arguing that Fannie and Freddie should take on a lot more loans and at one point Paulson said that the residential conforming loan cap should be $1 million. They said it was because Fannie and Freddie were solid. In reality, they knew Fannie and Freddie would be bankrupt within a year and there would be a federal bailout -- I bet you could get documents proving that. The same thing is going to happen with FDIC. And yes, if they own default swaps on some of the loans in these trusts, they can make additional money (probably from AIG, ha ha ha) on the insurance payouts. And all of that is secret.

GotDOCG: (February 12, 2010 5:03pm)

I wrote congress and blogged that this resurrection of the RTC would occur TWO YEARS AGO!!!

rg: (February 12, 2010 4:59pm)

Before all you FDIC & George Soros Lovers get all "giddy", please take a look at the "response to the response" at zerohedge.com http://www.zerohedge.com/article/fdic-responds-indymaconewest-video-alleging-sheila-bair-transferred-billions-taxpayer-funds-?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+zerohedge%2Ffeed+(zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero)

Hu Flung Pu: (February 12, 2010 4:49pm)

This video is so riddled with errors it's ridiculous. A couple of issues off the top of my head... First of all, the taxpayers aren't subsidizing these "losses" - banks are. This is coming from the FDIC and the FDIC insurance fund. Second, any "gain" on these residential RE transactions are accounted for (or "tracked") over 10 years and shared with the FDIC. The video makes is look as though One West gets to keep the entire gain. Wrong. I'm not saying that One West didn't get a deal. Perhaps they did. But it's nowhere near as sweet as the video insinuates, nor does it have anything to do with taxpayers. If anything, it's the OTHER banks paying into the FDIC insurance fund that should be upset. I don't think the folks who made the video understand the mechanics of the loss-share arrangements.

Warmane: (February 12, 2010 4:41pm)

Hey guys, you left out the best part. Paulson, Soros, and Goldman Sachs were among the biggest purchasers of CREDIT DEFAULT SWAPS. These were insurance policies that paid off 40 to 1 when a mortgage defaulted. Gee, with a pay-0ff like that, do you think there was any incentive for Wall Street to destroy the housing market?

CA Consumer: (February 12, 2010 4:36pm)

Where in the agreements listed does it say the FDIC has to only pay 7% and Indymac Bank has to incur a 2.5 billion dollar loss before that loss share kicks in? That FDIC press release is full of falsehoods as they claim about the tbws video. Sounds like a federal cover is going on now.

The Truth: (February 12, 2010 4:13pm)

Press Release FDIC Provides Additional Information on its Loss Share Agreement With OneWest Bank February 12, 2010 FDIC Director of Public Affairs Andrew Gray said, "It is unfortunate but necessary to respond to blatantly false claims in a web video that is being circulated about the loss-sharing agreement between the FDIC and OneWest Bank. Here are the facts: OneWest has not been paid one penny by the FDIC in loss-share claims. The loss-share agreement is limited to 7% of the total assets that OneWest services, and OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets. In order to be paid through loss share, OneWest must have adhered to the Home Affordable Modification Program (HAMP). The producers of this video perpetuate other falsehoods. The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed...

Larry: (February 12, 2010 4:05pm)

Have all you People complaining seen the FDIC press release!!!

no smarts: (February 12, 2010 3:49pm)

to Anonymous: I'm glad you think the economy is humorous. By the way... My ancestors had to fight in WWII in order to become a citizen of MY country. And my ancestors have always paid taxes in MY country. And true, I feel that if you are not a tax paying citizen, you should get out of MY country. And as funny as you think it is RIGHT NOW - I've brought in over $300k the last 2 years in a row (not much for some) and yet out of nowhere, I'll still lose my home. So don't think that you are safe because the Lord has told me that I'll be okay - but I'm no so sure for you.

Missy: (February 12, 2010 3:47pm)

First off, Stop blogging and write your Senators instead. Bombard them with letters. I have a fax and am VERY busy sending out letters about this. I think what some of you are missing here is that people are coming to sign closing documents and are being held hostage by the banks. They are being asked,by OneWest to sign a promissory note for $75000. One individual had lost his job,was going through a divorce and losing his home. The greedy bank said if he did not sign, that they would let his home to to foreclosure. Now he will not get to buy a home for 7 years and his credit is shot. AND, the banks will take advantage of him AGAIN, when they charge astronomical rates on anything he might want to purchase in the future. Poor guy is screwed again. If they would let him short sale, he would be able to purchase again in about 3 years. How greedy and nasty can this bank be?. Most other banks are doing exactly the same. Why is there no government oversight? Because they do not care us.

Scoot in AH: (February 12, 2010 3:44pm)

I just received a letter of denial for a short sale from IndyMac. The 1st is $1,000,000, the 2nd (different lender) is $350,000. The offer is $1,074,000. IndyMac wants full payoff on the 1st of $1,000,000. Obviously after costs Indy will net less than the loan and that leaves nothing for the 2nd. According to your video that means that One West Bank could stand to make more than $300,000.

Dude!: (February 12, 2010 3:40pm)

If you really want someones opinion about stuff like this go to google and type in "the guy from Boston"

Dude!: (February 12, 2010 3:33pm)

Here is what is really funny. We can watch videos all we want but no 1 knows what to do about the problems we have with this damn goverment we voted into office. The rich get rich and the poor just keep getting poorer. Do a video about who to contact and what to do about getting rid of all the dirty politions in office. We vote them in on promises and when they don't live up to their promises we just sit by and watch. Everyone needs to get off of their duff and start taking control of our own country again.

Madasyell: (February 12, 2010 2:47pm)

I have some banking stories that would make your head swim. I am so mad. I knew there was a reason they wouldn't work with small homebuilding companies to work out loans. We have lost everything we worked for the last 30 years to the banks. We were good paying customers and slapped in the face.

shamrock: (February 12, 2010 1:26pm)

bought a short sale in AZ last year for 50 cents on the dollar AND the stupid bank paid a realtor full commish. I thought they were crazy but figured there had to be some other incentive for them from the gov't. Unreal that media isn't hammering them on this.

Smarter than Most: (February 12, 2010 1:02pm)

Investigate Indy Mac even further...especially what the former CEO Frank Sillman & another former IndyMac executive Richard Wohl are doing today....the irony is that they created a company called Fortace LLC (http://www.facebook.com/l/d0540;www.fortace.com/) which...gets this....is a company that does post audits on loan files. For example "Repurchase Audits A top four bank retained Fortace to audit approximately 2000 defaulted mortgage loans per month and determine whether material fraud or misrepresentation had occurred." -- really?? I find this interesting that 2 execs from one of the worst mtg companies are now getting paid to audit defaulted loan files.... Think about it.

Joanne: (February 12, 2010 12:41pm)

Realtor who handles short sales says- From my experience, most of this information appears true. How this is being handled by the banks, should be illegal. These are the same banks who can not come up with a sensible loan modification for distressed home owners. The people & banks that got us into this mess are benifiting from property owners hardship! The way the loan amounts, sales & defiencies are calculated makes no sense- I'm sure someone is getting a big bonus for that math equation. Did you know that if the property is not a primary residence, in most cases a short sale IS NOT in the owners best financial interest - most are better off letting the bank foreclose. Does that make sense? A MI company can require sellers to sign promisary note for tens of thousands of dollars or forbid the short sale to go through. Property owners doing what they think is the RIGHT thing are finding that instead they are taking on more financial burden. For Who Does that make cents?

valley girl appraiser: (February 12, 2010 12:18pm)

Ok, peeps! The anger is palpable & rightly so. Bob H. sorry if someone tried to take credit for something you 'broke'. Bernando...glad you put it on your website. I did forward this to Glenn Beck [thanks to whomever posted the correct email address] as well as my current Congressman and the person who will be running against him. I am trying to get my nephew to upload it to YouTube...so if anyone [FRANK & BRIAN] are opposed to it, please notify me now. The more people outside of our industry know about what is REALLY going on...then we become empowered. And isn't THAT the goal here?

Bill: (February 12, 2010 11:55am)

Nicely produced piece... very slick. A couple things: 1) Any healthy bank can bid on these deals. The auction process is very open... no need to be a Goldman banker to get in on the action. 2) The FDIC makes payments to banks like OneWest out of their deposit insurance fund. That insurance fund is funded entirely by other banks. Not a nickel of government money has gone into the FDIC -- at least to date. So to the extent these deals are "sweetheart" deals, they are subsidized by other banks. 3) Any bank taking on a loss sharing arrangement covering single family mortgages is subject to the FDIC's loan modification program -- they can't just force short sales indiscriminately (at least not legally)

ashton: (February 12, 2010 11:49am)

@SnowJob > This needs to be exposed on mainstream media. > Passing it along to a friend at Fox. Was that a Joke?

NaNa: (February 12, 2010 11:15am)

What happens with the Mortgage Insurance Premiums that are paid each month?

Angry Citizen: (February 12, 2010 11:14am)

RE:anonymous. Guess what Sparky? You can't dispute the negetive economic impact that illegals and deadbeats have on our economy! Pull your head out Scooter, and own it!

Murphy: (February 12, 2010 11:04am)

BANK of (not) America....stinks

miami: (February 12, 2010 10:56am)

First off - you're going to be more believable if you learn how to pronounce Steve Mnuchin's name properly. Secondly, the FDIC organized this sale - run by Sheila Bair, someone with no GS links at all. George Soros is not affiliated with GS. He trades with them and every other large trading bank in the world - like JPM, Morgan Stanley, UBS, et al. John Paulson is ex- Bear Stearns. Blaming the ex- Sec'y of the Treasury for this deal is mega-retarded.

Nick : (February 12, 2010 10:56am)

@Bob Hertzog - blam! I can't stand it when people steal content!

aleskip: (February 12, 2010 10:54am)

If there is that much incentive for a bank to do short sales, why do they take months to process? Insufficient staff to handle them? There are plenty of unemployed Americans who could fill the slots and plenty of dollars to pay them if what you say is true...

Negotiator: (February 12, 2010 10:53am)

This is rather disturbing news, but it certainly explains in a nutshell why Indymac is so difficult to deal with, especially with foreclosures. I agree with loanlady, we all need to stand up. The worst bank by far is Bank of America, more the Countrywide legacy side of the bank. I don't know if a class action has been filed against them, but one needs to be. If anyone has any info regrading any class actions, I would be interested to know where my clients can start.

Nick : (February 12, 2010 10:50am)

@Bob Hertzog - blam! I can't stand it when people steal content!

Negotiator: (February 12, 2010 10:47am)

This is rather disturbing news, but it certainly explains in a nutshell why Indymac is so difficult to deal with, especially with foreclosures. I agree with loanlady, we all need to stand up. The worst bank by far is Bank of America, more the Countrywide legacy side of the bank. I don't know if a class action has been filed against them, but one needs to be. If anyone has any info regrading any class actions, I would be interested to know where my clients can start.

Anonymous: (February 12, 2010 10:45am)

Ohhhh, you poor pathetic "citizens". I'm pretty sure, if you aren't a decendent from an "American Indian" tribe, your ancestors were illegal immigrants and foreigners!! It is easy to blame someone else "No Smarts". Exactly Sparky, "No Smarts"!!!

Negotiator: (February 12, 2010 10:42am)

This is rather disturbing news, but it certainly explains in a nutshell why Indymac is so difficult to deal with, especially with foreclosures. I agree with loanlady, we all need to stand up. The worst bank by far is Bank of America, more the Countrywide legacy side of the bank. I don't know if a class action has been filed against them, but one needs to be. If anyone has any info regrading any class actions, I would be interested to know where my clients can start.

no smarts: (February 12, 2010 10:34am)

to BobR: Although the topic has gotten off track, i'll have to agree with r u kiddin. Unless one of us are a billionaire controlling the economy (which we are not), we should be on the same side 'helping each other'. The banks are not helping. True I haven't paid for my home in full but that is not a 'shattered American Dream'. If it weren't for our pathetic government who is only interested in people who can make them more money, we wouldn't be a country filled with illegal immigrants and foreigners whom take our jobs for less because they are not paying taxes, not spending money in this country, but yet they own everything and have utilization of our medical treatment and schools, it cost the hard working citizen too much to survive. If a TRUE American worked at a bank that doesn't help people, they should ALL quit and see what happens to the economy. But the BANKERS are just as greedy as the billionaires who really don't care about them. So they can have my home for little worth

pissedd: (February 12, 2010 10:01am)

in your video you forgot to add the fact that they can carry the gross loss over to the corporate tax return and offset net profits which will increase actual cash retained by about 39%

r u kiddin: (February 12, 2010 9:43am)

to Joann-sorry that I generalized Realtors and that you took it personal. I am a Black collar worker who owns his own business. I too know what it is like to work hard. (Hence "Black" collar) I come home every day with a "black" ring around my collar. I'm in construction and get ridiculed all the time about how much we charge. Although if it weren't for people like me, all those doctors, lawyers, insurance companies and worse yet BANKERS (BeeGee & RonB) and Government as a whole, wouldn't have a place to attend school to get a degree, work to earn a living, or home live in but yet they control this country and feel dominant above all others. I would be embarrassed to admit working for the government or banking. In fact I would be watching my back, losing sleep, be in fear for my life if I weren't making every effort to HELP my fellow mankind.

r u kiddin: (February 12, 2010 9:38am)

to Joann-sorry that I generalized Realtors and that you took it personal. I am a Black collar worker who owns his own business. I too know what it is like to work hard. (Hence "Black" collar) I come home every day with a "black" ring around my collar. I'm in construction and get ridiculed all the time about how much we charge. Although if it weren't for people like me, all those doctors, lawyers, insurance companies and worse yet BANKERS (BeeGee & RonB) and Government as a whole, wouldn't have a place to attend school to get a degree, work to earn a living, or home live in but yet they control this country and feel dominant above all others. I would be embarrassed to admit working for the government or banking. In fact I would be watching my back, losing sleep, be in fear for my life if I weren't making every effort to HELP my fellow mankind.

loanlady: (February 12, 2010 9:35am)

Rise up people, get mad as hell and fight for change in our government. If we don't, we all deserve what we get!

BobR: (February 12, 2010 9:14am)

To BeeGee from yesterday that the general public is not being harmed and that the FDIC is increasing assesments to the banks to cover these costs. BeeGee, do you really think that an assesment on the bank won't be passed on to the consumer? You would fit in very well with all these people trying to dig into my pocket.

Bob Hertzog: (February 12, 2010 9:10am)

Frank Bernardo: You have a lot of guts to come into this forum and claim this as being your blog, even going as far as to be upset that you didn't credit for "your blog". Please go to Active Rain and see my blog entitled "Is The FDIC Killing Short Sales?", dated September 19, 2009 (a month before you copied it and posted it on your blog site). This video was based on my original blog post, not the copy you made of it. Nice Try!

twitter.com/RealEstateDays: (February 12, 2010 9:09am)

This is very good information to share with all realtors and consumers... thank you guys... i will be be posting your link at my twitter account... http://twitter.com/RealEstateDays... hope everyone does the same.

Joann B. in PTC: (February 12, 2010 9:05am)

As a Realtor with our country's largest brand name co., I am dealing with both sides - Seller in Short sale and Buyers trying to qualify for loans. The mortgage industry leaders need to be regulated somehow for greed has had devastating consequences to our country's economy and many individual families. No need to cry for the banks with that video senario

Lynne : (February 12, 2010 9:01am)

what can we in the industry to get this changed.

RonB: (February 12, 2010 8:56am)

Question for "no smarts"...why do you call it "your home" if you never paid for it? So you somehow feel entitled to wreck the property because you can't have it for nothing? You're the victim of another shattered American dream, right? I guess you are right...you have "no smarts"

Frank Bernardo: (February 12, 2010 8:56am)

This came directly from my blog that I brok months ago. Michael dell is also an owner www.realestateandthings.blogspot.com Wished they would have given me a little credit one west is still buying banks and getting these deals. we are all standing by and letting this happen.

Lynne : (February 12, 2010 8:53am)

what can we in the industry to get this changed.

BeeGee: (February 12, 2010 8:52am)

The only one making any sense is ClayP. While the arrangement is absurd, it is not hurting the general public. The FDIC has just increased its assessments against banks to cover this. The FDIC has not taken a dime from taxpayers to cover these costs. Still, these arrangements are absurd and as a banker I'd like to know how I can get one of these sweet deals.

Brady: (February 12, 2010 8:51am)

I sold my house for over a million, and took back a second for 300K. When "recession" started the buyers walked away, leaving me with their new unassumable First mortgage with Wells Fargo. Wells has consistently refused to recognize my returned ownership, won't allow me (with great credit)to take over loan, and is foreclosing - auction next month. Four lawyers and a great short sale offer - all refused by Wells Fargo! Too many people think only people who spent more than they could afford are being foreclosed on - they should listen closer to individual stories of the victims of these bank thieves!

Frank Bernardo: (February 12, 2010 8:50am)

This came directly from my blog that I brok months ago. Michael dell is also an owner www.realestateandthings.blogspot.com Wished they would have given me a little credit one west is still buying banks and getting these deals. we are all standing by and letting this happen.

frugalone: (February 12, 2010 8:44am)

to ru kiddin.....try being a realtor and running your "own company" as a sole proprietor and then you will redefine what it actually means to work hard.....we didn;t create this mess, govt, bank, lenders and appraisers created it.....we don't set prices on homes OR lend money...get a clue

r u kiddin: (February 12, 2010 8:21am)

you're correct Joann but isn't that like the pot calling the kettle black? Realtor and greedy industry leaders...

im ready: (February 12, 2010 8:11am)

What these multi-Billionaires are not smart enough to figure out - is that they will no longer have the money when they are DEAD. Civil War anyone???

Wakeup: (February 12, 2010 8:07am)

Clay P - you are a tool. FDIC has enough money on hand to cover less than .5% of the deposits it is "insuring". FDIC as with the rest of government is a sham. Do you really think people in places of power use it to protect your interests? Keep drinking the koolaid.

Wakeup: (February 12, 2010 8:01am)

Clay P - you are a tool. FDIC has enough money on hand to cover less than .5% of the deposits it is "insuring". FDIC as with the rest of government is a sham. Do you really think people in places of power use it to protect your interests? Keep drinking the koolaid.

Anonymous: (February 12, 2010 8:00am)

I DON'T JUST SMELL A RAT... REEKS OF A WHOLE NEST! FOLLOW THE DROPPINGS http://cjintx.wordpress.com/2010/02/08/i-dont-just-smell-a-rat-reeks-of-a-whole-nest-follow-the-droppings/

no smarts: (February 12, 2010 7:50am)

All I know is that if my bank wont help me out - when they come to take my home, it wont be worth a dime when I am through with it.

becca: (February 12, 2010 7:42am)

Can you YouTube this for more exposure? I want to embed this video in a few thousand places!

snowbound: (February 12, 2010 7:27am)

Deliquent homeowners who are left with the option of "short sale" versus a traditional home sale are NOT necessarily left owing a deficiency balance. The lender has the option to pursue collecting a deficiency balance. This fact is usually based on the documents submitted to the lender at a short sale request i.e, bank statements, employment verification and tax forms, hardships letters etc. substantiating current income. This video is very misleading and before passing on, please do yourself a favor and invest a few minutes of your time in researching "short sale". This is how "panic" and "non-truths" get distributed through the internet. NOT everything you see or read is fact worthy!

snowbound: (February 12, 2010 7:22am)

Deliquent homeowners who are left with the option of "short sale" versus a traditional home sale are NOT necessarily left owing a deficiency balance. The lender has the option to pursue collecting a deficiency balance. This fact is usually based on the documents submitted to the lender at a short sale request i.e, bank statements, employment verification and tax forms, hardships letters etc. substantiating current income. This video is very misleading and before passing on, please do yourself a favor and invest a few minutes of your time in researching "short sale". This is how "panic" and "non-truths" get distributed through the internet. NOT everything you see or read is fact worthy!

snowbound: (February 12, 2010 7:17am)

Deliquent homeowners who are left with the option of "short sale" versus a traditional home sale are NOT necessarily left owing a deficiency balance. The lender has the option to pursue collecting a deficiency balance. This fact is usually based on the documents submitted to the lender at a short sale request i.e, bank statements, employment verification and tax forms, hardships letters etc. substantiating current income. This video is very misleading and before passing on, please do yourself a favor and invest a few minutes of your time in researching "short sale". This is how "panic" and "non-truths" get distributed through the internet. NOT everything you see or read is fact worthy!

bobbyb: (February 12, 2010 7:11am)

Everyone talking about how the FDIC is funded with bank fees is missing the whole point here. Its like saying "It really didn't cost us anything to get screwed". This video is correct when it points out that the banks have NO INCENTIVE to refinance mortgages & don't care at what price a property is sold. It is also correct in pointing out that the original homeowner still has a debt even though the bank made out like a bandit. Oh, and those loan guarantees DO come from us, the taxpayers, through Fannie and Freddie. This is just one more case of orchastrated bank robbery going on in full daylight right in front of us yet again. Did we learn from the S&L bailout? No. Are we learning now? No. We are being ripped off by the same people again. Do not be fooled. Nobody in Washington or Wall Street cares about you, your home, or your family.

no"smarts": (February 12, 2010 7:07am)

Well then I'm looking for advice since I don't have the "smarts". I'm in a position of needing a modification, but I don't qualify (because nobody does), so do I let the mortgage company repo my home or is there another card to play?

envguy: (February 12, 2010 6:48am)

Why does anyone think that fees paid by a bank do not come from bank customers. Banks do not create money. Yes FDIC is supported by bank fees but those come from bank customers. So yes we are subsidizing this effort. If the banks did not have to subsidize so much of the effort perhaps various banking fees consumers are subject to would not be so high.

Clay P: (February 12, 2010 6:40am)

Quite disturbing on the face of it. But the video has one very important fact wrong, which really makes its whole point wrong. The taxpayers do not bail out banks taken over by FDIC. FDIC is financed by premiums paid by member banks, not by taxpayers. Its purpose is to insure depositors and thereby avoid panics that cause runs on banks and destabilize the banking system. The premiums give FDIC a fund with which to take over failing banks and make their depositors whole, if necessary, up to $100,000 (temporarily raised to $250,000). FDIC's usual practice when it takes over a failed bank is to sell its assets and liabilities to another bank, which then takes care of the depositors. Usually, the depositors just keep banking with the acquiring bank, but they don't have to do it. They can, if they wish, withdraw their deposits up to $100,000 or $250,000, as the case may be.

Clay P: (February 12, 2010 6:35am)

Quite disturbing on the face of it. But the video has one very important fact wrong, which really makes its whole point wrong. The taxpayers do not bail out banks taken over by FDIC. FDIC is financed by premiums paid by member banks, not by taxpayers. Its purpose is to insure depositors and thereby avoid panics that cause runs on banks and destabilize the banking system. The premiums give FDIC a fund with which to take over failing banks and make their depositors whole, if necessary, up to $100,000 (temporarily raised to $250,000). FDIC's usual practice when it takes over a failed bank is to sell its assets and liabilities to another bank, which then takes care of the depositors. Usually, the depositors just keep banking with the acquiring bank, but they don't have to do it. They can, if they wish, withdraw their deposits up to $100,000 or $250,000, as the case may be.

Clay P: (February 12, 2010 6:30am)

Quite disturbing on the face of it. But the video has one very important fact wrong, which really makes its whole point wrong. The taxpayers do not bail out banks taken over by FDIC. FDIC is financed by premiums paid by member banks, not by taxpayers. Its purpose is to insure depositors and thereby avoid panics that cause runs on banks and destabilize the banking system. The premiums give FDIC a fund with which to take over failing banks and make their depositors whole, if necessary, up to $100,000 (temporarily raised to $250,000). FDIC's usual practice when it takes over a failed bank is to sell its assets and liabilities to another bank, which then takes care of the depositors. Usually, the depositors just keep banking with the acquiring bank, but they don't have to do it. They can, if they wish, withdraw their deposits up to $100,000 or $250,000, as the case may be.

MadInPVBFL: (February 12, 2010 6:02am)

Shut Up Former Lo! If you're going to knock people for their poor grammer and spelling, start checking your own work and learn how to spell "professionsals"! Dumb Ass!

p: (February 12, 2010 3:19am)

The FDIC, with -$8 billion in balance in Q3 2009, is offering millions of ZERO interest NON-RECOURSE loans to private investors. Where does it get the money and how does this help protect trillions of our deposits? "Lennar Pays $243M for $3B of Distressed Commercial and Residential Loans from FDIC... The FDIC is retaining the remaining 60% equity interest and is providing $627 million of non-recourse financing at zero % interest for seven years." http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-lennar-corporation-fdic-loan-sales-bank-reo-properties-rialto-capital-advisors-stuart-miller-jeffrey-krasnoff-2009.php *imho*

p: (February 12, 2010 2:03am)

The FDIC is not just an insurer, it is also a federal regulator for Class NM banks that also failed. The Office of Inspector General has issued many reports criticizing OCC, OTS, the Fed, and the FDIC for poor supervision. The FDIC ended Q3 2009 with -$8 billion in balance. It is currently backing at least $3 trillion in deposits, $13 trillion in total assets, over $300 billion of bank bonds for Goldman Sachs, Citigroup, JP Morgan, etc through TLGP, and offering millions of non-recourse financing for private investors buying loan portfolios at dirt cheap price (eg the FDIC is loaning millions to Lennar at 0% interest for 7 years). This agency has failed its most important mandate: deposit protection. It is being run like AIG, except the agency is able to do whatever it wants, for instance, picking whom to save and whom to sacrifice, using the implicit guarantee of unlimited amount of our tax dollars. There is no transparency or consistency in its bank seizures and sales. *imho*

p: (February 12, 2010 1:58am)

The FDIC is not just an insurer, it is also a federal regulator for Class NM banks that also failed. The Office of Inspector General has issued many reports criticizing OCC, OTS, the Fed, and the FDIC for poor supervision. The FDIC ended Q3 2009 with -$8 billion in balance. It is currently backing at least $3 trillion in deposits, $13 trillion in total assets, over $300 billion of bank bonds for Goldman Sachs, Citigroup, JP Morgan, etc through TLGP, and offering millions of non-recourse financing for private investors buying loan portfolios at dirt cheap price (eg the FDIC is loaning millions to Lennar at 0% interest for 7 years). This agency has failed its most important mandate: deposit protection. It is being run like AIG, except the agency is able to do whatever it wants, for instance, picking whom to save and whom to sacrifice, using the implicit guarantee of unlimited amount of our tax dollars. There is no transparency or consistency in its bank seizures and sales. *imho*

awakened_soul: (February 12, 2010 1:55am)

Who knows if Michael Moore will get this but maybe if enough people send the same message,,, http://www.michaelmoore.com/submit

awakened_soul: (February 12, 2010 1:09am)

ATTENTION EMAIL ADDRESS UPDATE: LESLIE OR THATCHER and fellow bloggers The [email protected] email isnt going thru,,,so please send to [email protected]

just another pee-on but one with some brains: (February 11, 2010 11:32pm)

First of all, these is some missunderstanding here, the FDIC is an insurance company providing all the little people like us with a guarantee that our money deposit in the bank will be there when they want it. The premium is paid by the banks not the tax payers. I was under the impression it was tax dollars too, and now that I work for the FDIC indirectly, I realized I was not finally getting back some of my tax dollars but instead some of the Banks insurance premiums. The FDIC liquidates what ever assets are seized at the closing and they do not close banks the supervising agencies do and then appoint them as a receiver. Inorder to continue to insure deposits they must liquidate. Otherwise kiss your money in the bank good bye. Do a little more research yourself by going to FDIC.gov and reading up on what they do and why they are in existance.

just another pee-on but one with some brains: (February 11, 2010 11:27pm)

First of all, these is some missunderstanding here, the FDIC is an insurance company providing all the little people like us with a guarantee that our money deposit in the bank will be there when they want it. The premium is paid by the banks not the tax payers. I was under the impression it was tax dollars too, and now that I work for the FDIC indirectly, I realized I was not finally getting back some of my tax dollars but instead some of the Banks insurance premiums. The FDIC liquidates what ever assets are seized at the closing and they do not close banks the supervising agencies do and then appoint them as a receiver. Inorder to continue to insure deposits they must liquidate. Otherwise kiss your money in the bank good bye. Do a little more research yourself by going to FDIC.gov and reading up on what they do and why they are in existance.

just another pee-on but one with some brains: (February 11, 2010 11:23pm)

First of all, these is some missunderstanding here, the FDIC is an insurance company providing all the little people like us with a guarantee that our money deposit in the bank will be there when they want it. The premium is paid by the banks not the tax payers. I was under the impression it was tax dollars too, and now that I work for the FDIC indirectly, I realized I was not finally getting back some of my tax dollars but instead some of the Banks insurance premiums. The FDIC liquidates what ever assets are seized at the closing and they do not close banks the supervising agencies do and then appoint them as a receiver. Inorder to continue to insure deposits they must liquidate. Otherwise kiss your money in the bank good bye. Do a little more research yourself by going to FDIC.gov and reading up on what they do and why they are in existance.

just another pee-on but one with some brains: (February 11, 2010 11:17pm)

First of all, these is some missunderstanding here, the FDIC is an insurance company providing all the little people like us with a guarantee that our money deposit in the bank will be there when they want it. The premium is paid by the banks not the tax payers. I was under the impression it was tax dollars too, and now that I work for the FDIC indirectly, I realized I was not finally getting back some of my tax dollars but instead some of the Banks insurance premiums. The FDIC liquidates what ever assets are seized at the closing and they do not close banks the supervising agencies do and then appoint them as a receiver. Inorder to continue to insure deposits they must liquidate. Otherwise kiss your money in the bank good bye. Do a little more research yourself by going to FDIC.gov and reading up on what they do and why they are in existance.

CAJeffO: (February 11, 2010 11:11pm)

Leslie from Denver -- The email you posted? [email protected] THAT EMAIL has been "Temporarily Suspended" give me another one

bunkermunk: (February 11, 2010 10:59pm)

You guys could really leverage up your impact by starting a Youtube channel for your videos.

Billy: (February 11, 2010 10:33pm)

Fire them all... Vote

Billy: (February 11, 2010 10:28pm)

Fire them all... Vote

Billy: (February 11, 2010 10:24pm)

Fire them all... Vote

Billy: (February 11, 2010 10:19pm)

Fire them all... Vote

Billy: (February 11, 2010 10:15pm)

Fire them all... Vote

Billy: (February 11, 2010 10:10pm)

Fire them all... Vote

Billy: (February 11, 2010 10:05pm)

Fire them all... Vote

Billy: (February 11, 2010 10:01pm)

Fire them all... Vote

Billy: (February 11, 2010 9:56pm)

Fire them all... Vote

Billy: (February 11, 2010 9:52pm)

Fire them all... Vote

Billy: (February 11, 2010 9:47pm)

Fire them all... Vote

Jon: (February 11, 2010 9:28pm)

I received an approval for a OWB on 2/8/10, and pulled one from November of 09. Let's see if I did the math right... 1.) $175,000 owed - ss net $80,000 = "loss" of $95,000, *.8 = $76,000 FDIC check to OWB. So $76,000 + $80,000 - $122,500 = $33,500 to OWB. 2.) $360,000 owed - ss net $317,000 = "loss" of $43,000, *.8 = $34,400 FDIC check to OWB. So $34,400 + $317,000 - $252,000 = $99,400 to OWB. Well...at least on neither of these did the bank ask for contribution from the homeowner, and both were exempt from paying taxes on the forgiven debt. Guess I facilitated over $100k of FDIC money to OWB, but I did have a fiduciary responsibility to the homeowners who were over a year behind on each, and do not to any of you...sorry guys! Those homeowners did make out like bandits though, living in a house they can't afford, a good amount with no rent, and won't have to pay back a dime for it, other than in taxes like the rest of us. I guess I can relate to Nick Nailer in Thank You for Smoking.

Anansi: (February 11, 2010 9:15pm)

Someone please send this to Michael Moore !!! I wish I knew how to get a hold of him !!

jambo99: (February 11, 2010 9:04pm)

Ladies and gentlemen I think the guys who did this video should send 535 copies to congress and 5 to the administration. Great work guys... I hate to be the bearer of bad news but this has happened at many banks. Bank America, Citi and a substantial number of those who took tarp funds. The TARP funds were to be used to prop up the balance sheets of many banks with toxic assets. Where did the TARP funds come from? The tax payer dollars! Now many of these banks, bought other banks just as depicted in the video instead of lending money to deserving businesses and folks with good credit. We had a mortgage lender with 5 billion in assets and about 200M in toxic loans. The Feds came in, seized the company and within 3 days had Bank of America own the remaining assets. My former bank Regions took 5B in tarp funds and stopped lending. I think all of DC is so ignorant or corrupt we should replace them all except possibly Scott Brown, he has not had time to become corrupt as he hasn't been there

Clay_Kime: (February 11, 2010 8:56pm)

Dear tender hearted DBW: Could I suggest Colossians 1:15. It's already done, before we were ever here to consider it.

Leslie in Denver: (February 11, 2010 8:49pm)

I am the one who sent this info to TBWS. I have gotten over 1,000 emails with this continuing discussion. I sent this info to 15 of 23 members of the Senate Banking & Finance Committee - AND, to our fearless leader, Pres. Obama. And to all the major media outlets (ABC, NBC, CBS, CNN, FOX and all the local affiliates.)Not even Beck has replied. I have not gotten a single, solitary reply! NOT ONE! Do you think there's a conspiracy going on? Ya think? Maybe? Hah! THE FLEECING OF AMERICA IS ALIVE AND WELL. I am so disgusted I could vomit.

Thatcher's Journal: (February 11, 2010 8:31pm)

In response to Leslie in Denver's post: I sent your post and the link to this video to Stu, the Executive Producer and Head Writer for the Glenn Beck Program. EVERYONE ELSE DO THE SAME - USE THE SUBJECT LINE: "this woman's voice should be heard - expose this please!!!" Email addy: [email protected] They get a lot of emails but the Beck program wants to showcase stories like this. If they get 100 emails with the same subject they'll respond; 100 is more than a coincidence and none of them will be forwards. If you want to help, copy Leslie's post, use the same subject line, and urge them to watch the video and make this voice heard (in 2 sentences, they won't read more than that). Freedom + Internet = ability....but only if we use it.

Clay_Kiime: (February 11, 2010 8:15pm)

Go Jambo99, Leslie and Anonomal! YourDeadMeat69 failed the math test. You missed the fraud. The servicer/investor was "made-whole" . . . they experienced no loss. Aside from the questionable profit from the transaction, the $75K note was little more than a scam on theh homeowner that put the homeowner in high risk of future default. Do note payments received go to the investor (owner of the loan)? That remains unclear. The American public is being "scammed" plain and simple. If that's acceptable to you, then OK, for the rest of us, we have work to do. Leslie has made a great start. You go girl! Let's follow up. I have already forwaded this to senior hill staffers that I know. Helps to be in the capital's suburbs, I hope.

alan riot: (February 11, 2010 8:13pm)

When do the riots start?

Clay_Kime: (February 11, 2010 7:47pm)

Jon, if you had taken a bit more time to do your research, you would also know that I also own www.NoForeclosureFor.Me and www.PlanToMove.com. Your conclusions are false. IndyMac/OWB is not a client. They have been the subject of numerous short sale transactions. I am enlightened by the video, not you or your inuendos. I find your comments offensive and basically uninformed. Have a good life!

Jon: (February 11, 2010 7:34pm)

I am just shocked that everyone else is so shocked by this, not condoning it. This happens all of the time, none is acceptable! Don't we have no-bid contracts, closed door auctions, pallets of billions of dollars of tax payer cash that went missing in Iraq, the repeal of Glass-Steagall, bail-out of AIG, elected officials that do not believe in evolution, etc. etc. to ad nauseum? I thought what was worse was in 2008 when Indymac charged people non-refundable ILLEGAL (in MA anyhow) upfront short sale fees. How is it to your shareholder/investor's benefit to risk mitigating thousands of dollars of loss to pocket an extra $300 on the side. And, Clay, your site is ownedbythebanks.com. You get more business if the banks foreclose as opposed to short sale or chapter 7, is that right? You get paid with tax-payer dollars from the sweetheart deal! "No missed incentives/bonuses for our clients - ever . . . Personally guaranteed?" OWB/Indymac ever one of your clients? People in glass houses, Clay.

Anonomal: (February 11, 2010 7:27pm)

The FDIC cut the exact same deal with Compass Bank (BBVA Compass). The FDIC shut down Guaranty Bank and sold the assets to Compass in 2009. The FDIC agreed to reimburse Compass up to 80% any mortgage losses Compass incurs--and the agreement is in effect for 10 years!!!!!!

[email protected]: (February 11, 2010 7:18pm)

The mortgage holder still made out like a bandit even at owing $75K. The deal allowed him to be forgiven 140K that was given to the bank by the FDIC. I don't think it has been discussed, but many banks in recourse states, when you do a short sale, can come after you years later for the difference. What was that--$486K-$241 or $245 the guy still "owed" in recourse states hanging over his head? And that $170K the mortgage holder "made" on the deal isn't taxable to him. No no, explain ALL of it before you get all starry eyed, the homeowner made out pretty good. Maybe he could have done better than $75K with negotiation, but, hey, he did pretty damn good.

Anonomal: (February 11, 2010 7:17pm)

I happen to know Compass Bank (BBVA Compass) got the exact same deal when they bought Guaranty Bank from the FDIC. The FDIC will reimburse Compass up to 80% of any mortgage losses they incur.

DBW: (February 11, 2010 7:15pm)

I knew that Henry Paulson robbed the taxpayes of America. However, I did not know all of the players or the reason behind the deal. How many elected representatives in Congress has stock in these banks? And did President Barack Hussein Obama know when he raised the FDIC insurance to protect the banks? So now "we the people" are governed by the best and slick of thieves. Only the Lord Jesus Christ can change the direction of this global thief against the middle class all around the world. Let us all pray on one accord to the Lord Jesus Christ that "He will judge these thieves hard and quick for the world sake." AMEN! The last time I checked this world belonged to the Lord not to the wicked. Thank God it is written "Thou shall not commit murder."

DBW: (February 11, 2010 7:09pm)

I knew that Henry Paulson robbed the taxpayes of America. However, I did not know all of the players or the reason behind the deal. How many elected representatives in Congress has stock in these banks? And did President Barack Hussein Obama know when he raised the FDIC insurance to protect the banks? So now "we the people" are governed by the best and slick of thieves. Only the Lord Jesus Christ can change the direction of this global thief against the middle class all around the world. Let us all pray on one accord to the Lord Jesus Christ that "He will judge these thieves hard and quick for the world sake." AMEN! The last time I checked this world belonged to the Lord not to the wicked. Thank God it is written "Thou shall not commit murder."

BOB: (February 11, 2010 7:05pm)

Hi Leslie! I'm the guy who wrote the original blog on this back in September/2009, and I'm so glad that you sent it to these guys. When I wrote the blog, it started to pick up traction, then slowly died out. I sent it to every major media outlet, government leader, etc. that I could think of, but to no avail. Business Week magazine actually ran an article in October/2009 on it, but failed to get into the details that these guys did. This video has brought it back to life, and hopefully the mainstream media will take it to the next level this time around. I can't tell you how many emails I've received from people all over the country, expressing thanks (and frustration). I just wanted to take a moment and thank you as well. Keep up the fight!

DBW: (February 11, 2010 7:04pm)

I thank God for raising you two Americans up to tell the truth to the American Citizens. You see I knew that Henry Paulson robbed the taxpayes of America. However, I did not know all of the players or the reason behind the deal. How many elected representatives in Congress has stock in these banks? And did President Barack Hussein Obama know when he raised the FDIC insurance to protect the banks? So now "we the people" are governed by the best and slick of thieves. Only the Lord Jesus Christ can change the direction of this global thief against the middle class all around the world. Let us all pray on one accord to the Lord Jesus Christ that "He will judge these thieves hard and quick for the world sake." AMEN! The last time I checked this world belonged to the Lord not to the wicked. Thank God it is written "Thou shall not commit murder."

Clay_Kime: (February 11, 2010 6:53pm)

Go Leslie! And thanks RG. I was feeling a bit lonely. Let's rock! Clay

rg: (February 11, 2010 6:47pm)

Clay: As a Broker myself, your your post is the first I've seen (and I've been following this for a couple of days) that make total sense! Some choose to not only hide their head in the sand, but defend the actions of these scumbags that are in charge of our economic future (without understanding the video and/or not taking the time to look through the FDIC documents). Finally, someone gets it!

Clay_Kime: (February 11, 2010 6:38pm)

Thanks for the expose'. The rest of you don't seem to understand a word of what this means. Jon, I truly hope you are NOT a realtor. An if you are, I will relish your prosecution for incompetnence and unworthiness. This has noting to do with understanding short sales, about which I am an expert. This is about corruption at the highest levels, with ourt clients and theh american taxpayers as the only true victims. Wake up and smell the coffee.

Jon: (February 11, 2010 6:23pm)

http://www.irs.gov/individuals/article/0,,id=179414,00.html

top5ray: (February 11, 2010 6:17pm)

The federal government is also having the bank approving the short sale issue a 1099 to the defaulting homeowner for the delta between the original loan amount and the short sale price. Have a friend that just got one for $400K as that was the difference between the $900k loan and the $500k short sale price.

top5ray: (February 11, 2010 6:12pm)

The federal government is also having the bank approving the short sale issue a 1099 to the defaulting homeowner for the delta between the original loan amount and the short sale price. Have a friend that just got one for $400K as that was the difference between the $900k loan and the $500k short sale price.

Destiny Real Estate: (February 11, 2010 6:09pm)

Thanks for making this crystal clear, this is going to help me negotiate a short-sale that is stalled.

otter: (February 11, 2010 6:05pm)

Jon...I LOVE your post this afternoon. Because it's EXACTLY what has happened to me, today as a matter of fact. Foreclosure yesterday, living rent free for the past 10 mos. and filing bankruptcy in the next two weeks because NO ONE WOULD MODIFY MY LOAN because of job loss. wow, what a great country we live in.

Jon: (February 11, 2010 5:59pm)

Clay, you do not understand shorts. A short sale can have your debt "paid settled" with you walking away clean (no prom note) or leave you with an unsecured note that is negotiable (saw Chase HELOC offer 25% of note for lien & deficiency release, GMAC 20% without conveyance) and does not preclude you from filing chapter 7 bankruptcy. Also, the terms of the deal between OWB and the FDIC is only for the mortgages that Indymac was the "investor" as opposed to the "servicer." Short sales and loan mods are not law, they are negotiations. The people you talk to at the bank are not well trained, and are usually given guidelines or script to go by. I had a guy in OWB's foreclosure department not know that chapter 7 means you do not owe the deficiency. http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter7.html. Is OWB's loss calculated on the auction price or REO sale price? What the video shows is "bad" but there's worse! Any word on AMTrust->FDIC->BofNY yet? Bueller? Bueller?

PapaBear: (February 11, 2010 5:42pm)

Small wonder that IndyMac/OneWest Bank has the most efficient short sale approval process in the country...I am a RE "Broke"r working the short sale inventory and this AhhHA does not make me feel warm & fuzzy in the least

jpys: (February 11, 2010 5:36pm)

Are we ready to get rid of the Federal Reserve, Freddy Mac, Fannie Mae, FDIC and lop off the hands of all other banksters among us yet?

Sam: (February 11, 2010 5:19pm)

That explains why Indy Mac won't talk to me about refinancing my loan...and I'll probably lose my property

Clay_Kime: (February 11, 2010 5:09pm)

I haven't read to the beginning of the thread, but those commenting of late have clearly missed the point of this video/report. This is one of the most outrageous corruption schemes ever concocted and exposed. Go back and watch the video, take notes if you must until you get it, again and again. If you are doing short sales and don't get the implication of this, you have the moral obligation to resign from real estate, because you must also fail to understand "fiduciary responsibility" to your clients. Please, every one of you . . . send this link to every Federal, State and Local legislator you have in your jurisdiction. Don't forget our fearless leader, president Obama. Regards, Clay

Jon: (February 11, 2010 3:38pm)

Being one of the "professionsals" I would like to take the time to point out the irony... My opinion, as concise as I can make it: Approach this like the banks do: look at your options in terms of cold, hard, math. If the house (house, not home) is worth less than what is owed on it perhaps keeping it is not the best option. Perhaps not making your mortgage payment, living "rent free" until the bank forecloses, make them offer you cash for keys, file chapter 7 bankruptcy to avoid deficiency if applicable, then rent until you can get a loan again is a better option. That is exactly what the banks would do in your shoes. Married with only your name on the mortgage? Guess which lucky spouse will be on the next mortgage before your bankruptcy clears up! The market will correct when we're on a level playing field. Folk can invest in gold, or widgets, or wherever they need to park their wealth when the dollar tanks. T-bills to the Chinese then inflation sounds okay to me! Fight back.

valley girl appraiser: (February 11, 2010 2:44pm)

I watch y'all daily...duh. Imagine my shock & surprise when this webcast showed up in my email...after having been forwarded by at least a few dozen people around the great state of Texas. Great job, guys! To former LO: obviously u havent been on the bloggosphere very long to know that most peeps that blog with NE regularity use shorthnd & completely disregard grammar etc. It's not englsh class....it's a forum.. don't like..then leave. BYE NOW!

InteractiveLawCenter.com: (February 11, 2010 2:36pm)

MadlnPBVFL - You did a great job getting contact information for actual people at OWB. I would like to learn more about your experience. Please submit an inquiry form at: http://www.CaliforniaForeclosureDefense.com

former lo: (February 11, 2010 2:22pm)

You people are, for the most part, professionsals. You have knowledge about this industry. Do any of you have any public speaking/writing skills? Trying to follow this discussion is unbelievably difficult...did you people deal with "average joe" and/or his family? If you did, you must have failed miserably. I can spit out the jargon as well as anyone, but reading these posts is something that should be on a late-night show......if you have a point, make the effort to get it across in a way that others can "wade" through....having to try and figure out your bad spelling, poor grammar and use of unfamiliar terms only complicates whatever point you're trying to make. Did any of you people ever have to take BASIC English in school?

former lo: (February 11, 2010 2:18pm)

You people are, for the most part, professionsals. You have knowledge about this industry. Do any of you have any public speaking/writing skills? Trying to follow this discussion is unbelievably difficult...did you people deal with "average joe" and/or his family? If you did, you must have failed miserably. I can spit out the jargon as well as anyone, but reading these posts is something that should be on a late-night show......if you have a point, make the effort to get it across in a way that others can "wade" through....having to try and figure out your bad spelling, poor grammar and use of unfamiliar terms only complicates whatever point you're trying to make. Did any of you people ever have to take BASIC English in school?

former lo: (February 11, 2010 2:14pm)

You people are, for the most part, professionsals. You have knowledge about this industry. Do any of you have any public speaking/writing skills? Trying to follow this discussion is unbelievably difficult...did you people deal with "average joe" and/or his family? If you did, you must have failed miserably. I can spit out the jargon as well as anyone, but reading these posts is something that should be on a late-night show......if you have a point, make the effort to get it across in a way that others can "wade" through....having to try and figure out your bad spelling, poor grammar and use of unfamiliar terms only complicates whatever point you're trying to make. Did any of you people ever have to take BASIC English in school?

former lo: (February 11, 2010 2:10pm)

You people are, for the most part, professionsals. You have knowledge about this industry. Do any of you have any public speaking/writing skills? Trying to follow this discussion is unbelievably difficult...did you people deal with "average joe" and/or his family? If you did, you must have failed miserably. I can spit out the jargon as well as anyone, but reading these posts is something that should be on a late-night show......if you have a point, make the effort to get it across in a way that others can "wade" through....having to try and figure out your bad spelling, poor grammar and use of unfamiliar terms only complicates whatever point you're trying to make. Did any of you people ever have to take BASIC English in school?

tomshup: (February 11, 2010 2:10pm)

Anyone who relies on wikipedia for the innerworkings of the FDIC is a frigging moron! Pay attention to the banking pros whose comments are here and you may learn something! TAXPAYERS are on the hook for the FDIC and all the shenanigans between NYC and the Beltway buffoons (Congress). TARP, GM, CHRYSLER, AIG, etc.

Jon: (February 11, 2010 2:07pm)

Emotion has no place in this equation. I remember hearing a piece on NPR between a bank exec and an investigative journalist, and the bank exec said something to the effect of "don't blame a shark for being a shark." We all had a choice; a dollar is a vote. By doing business with a company you are condoning/supporting their practices. It is all well and good to complain on some blog, but supporting only "good" businesses would be a better use of time! If you have a problem with your representive voting on legislation they do not understand, what are you doing about it? We already know that less regulation is not the answer, as evinced by The Jungle, sugar barons, and banks being able to leverage well above $12 of liability to $1 of asset. Three phrases I can think of are fitting: 1.) if you can't beat them (wealthy elite), join them; 2.) Caveat Emptor; 3.) if you look around the table and don't know who the sucker is...

LORGRDOTCOM: (February 11, 2010 1:55pm)

OMG that is TRULY messed up!

Jon: (February 11, 2010 1:40pm)

Redhot, The 1099 for "phantom profits" is only applicable, for the time being, to refi's where the cash didn't go back into the house, greater than 4 unit multi-s, and not primary residences (I think). As an honest question, how many people were upset in 2004 when loans came easy and the wine flowed like water? This current situation is the hangover. Banks are businesses. Who is at fault, the banks who offered dangerous products, or the person who "sign on the line that is dotted?" We incarcerate drug dealers as well as drug users, if that is a clue. Have no illusions (delusions?), loss mitigation is the name of the game. Loan mods and short sales are only on the table because sometimes they can recoup more money...helping people would be a PR fringe benefit. When values were still (artificially) increasing short sales were even less often approved, and loan mods were limited to you paying 1/3 total arrears with the rest added to your principal balance.

Esquire: (February 11, 2010 1:20pm)

The only thing that this video (below) does not include is that when the FDIC sold all of the assets to OneWest Bank it retained all of the liabilities. What this means is that if Indy Mac had any obligations to homeowners for Truth in Lending Act Violations Fraud, or otherwise, then those are wiped clean by the FDIC because Congress withdrew jurisdiction from all courts to restrain or affect the FDIC as Receiver from exercising its statutory powers and functions 12 U.S.C. § 1821(j). The FDIC’s powers as a receiver are sufficiently broad so it can take all actions necessary to resolve the problems of a failed financial institution. Sahni v. American Diversified Partners, 83 F. 3d 1054, 1058 (9th Cir. 1996). Ten U.S. Courts of Appeals, in at least 25 separate decisions, have held that section 1821(j) means that courts lack jurisdiction to grant any form of relief that would restrain or affect the Receiver’s exercise of its statutory powers and functions. Bottom Line no Homeowner redres

Esquire: (February 11, 2010 1:13pm)

The only thing that this video (below) does not include is that when the FDIC sold all of the assets to OneWest Bank it retained all of the liabilities. What this means is that if Indy Mac had any obligations to homeowners for Truth in Lending Act Violations Fraud, or otherwise, then those are wiped clean by the FDIC because Congress withdrew jurisdiction from all courts to restrain or affect the FDIC as Receiver from exercising its statutory powers and functions 12 U.S.C. § 1821(j). The FDIC’s powers as a receiver are sufficiently broad so it can take all actions necessary to resolve the problems of a failed financial institution. Sahni v. American Diversified Partners, 83 F. 3d 1054, 1058 (9th Cir. 1996). Ten U.S. Courts of Appeals, in at least 25 separate decisions, have held that section 1821(j) means that courts lack jurisdiction to grant any form of relief that would restrain or affect the Receiver’s exercise of its statutory powers and functions. See. E.g., Tri-State Hot

Redhot: (February 11, 2010 11:47am)

And the short sale seller, the previous owner of the home has to paid taxes on a 1099 they will get from the short sale. Thats crap

Benny: (February 11, 2010 11:44am)

You can sum up what's wrong with this country in just a few words...greedy corporate executives, corrupt politicians, thieving bankers, and Wall Street whores!

Clows to the left Jokers to the Rigth: (February 11, 2010 11:33am)

I think you have a very uninformed view of illegal immigration, most 'illegal' immigrants are in possession of fradulent documents get paid pay checks from which the same taxes you and I have withdrawn. If you want to stop illegal immigrants stop the people hiring them...if you're all about the 'free market' illegal immigration is the ultimate free market solution. And ACTUALLY and FACTUALLY the most effective deterent to illegal immigration has been the Recession.

Read Wikipedia: (February 11, 2010 11:26am)

The Truth and Esquire are about the only people right on this issue. Being a 'taxpayer' is a function you fufil when you PAY TAXES. It's not a title like citizen. When you put money in a bank this is you acting individually and privately. The Banks then pay an insurance premimum, true like most insurance it is a rip off in the short run. However, if your bank fails, which few do, but THEY DO. You're going to be happy the FDIC is there to safeguard your money, yes with money from an insurance pool. Just like if you get in an accident or get sick, yes your expenses will be covered by an insurance pool, ie a bunch of people who aren't you! To the extreme you people are taking it, then even private insurance is socialized medicine! Do yourselves a favor and read a wikipedia arcticle before you spout off what you thought up on the john this morning. Of all the sh#t going down in this country right you dumb***es are worried about the Godd*amn FDIC!!!!!!!!!!!!!!!!!!!!

sremains: (February 11, 2010 11:15am)

Hatnem, couldn't agree more. Check out the FairTax.org--it tackles many of our problems head on. It calls for the elimination of all personal, inheritance, corporate, and capital gains taxes--essentially all taxes--and its stead, a national sales tax. All illegal aliens will be paying into the system under this design, and if they want their poverty level equalizer, they'll have to become legal to get it. Check it out. It's worth getting behind. There are very few good ideas circulating in Washington right now, but this is one of them.

Esquire: (February 11, 2010 11:02am)

This is why the public (& government) needs to stay out of banking and insurance. Neither understands what they are talking about. FDIC is a QUASI-GOVERNMENT agency. If it goes under then it does so on its own UNLESS some idiot president bails them out. FDIC is an insurance company. NO INSURER can survive by putting premiums in a bag. Yes they invest in treasuries which is the same as handing the money over to the government in exchange for an IOU. But, if they buy stocks, you people will say they are in bed with Wall Street. They need investments w/ suitable returns & low risk. The so called sweetheart deal is what the FDIC does. Banks rarely "go under." FDIC negotiates sales of the bank or its assets & deposits. Unless the purchasing bank fails this shouldn't be a problem & will be a lot cheaper than paying depositors. People need to quit LOOKING for conspiracies under every rock and either learn & understand what they are talking about or keep silent.

Esquire: (February 11, 2010 10:58am)

This is why the public (& government) needs to stay out of banking and insurance. Neither understands what they are talking about. FDIC is a QUASI-GOVERNMENT agency. If it goes under then it does so on its own UNLESS some idiot president bails them out. FDIC is an insurance company. NO INSURER can survive by putting premiums in a bag. Yes they invest in treasuries which is the same as handing the money over to the government in exchange for an IOU. But, if they buy stocks, you people will say they are in bed with Wall Street. They need investments w/ suitable returns & low risk. The so called sweetheart deal is what the FDIC does. Banks rarely "go under." FDIC negotiates sales of the bank or its assets & deposits. Unless the purchasing bank fails this shouldn't be a problem & will be a lot cheaper than paying depositors. People need to quit LOOKING for conspiracies under every rock and either learn & understand what they are talking about or keep silent.

hatnem: (February 11, 2010 10:26am)

We all need to take a breath here. Washington is broke, and nothing will change until WE affect a change. The Madwoman (Pelosi) wants to give ILLEGAL ALLIENS free healthcare, education, and now Social Security benefits. Even though they are here ILLEGALLY and have never paid into the system. And who's footing that bill? And while they are here, we're likely paying for there comfy life with welfare, food stamps, medical benefits, fuel assistance, unemployment benefits, etc. While Middleclass Joe Taxpayer works hard, pays for everything and still tries to make ends meet for himself. It's time we take back America. We can start by cleaning house in the beltway.

clark: (February 11, 2010 10:19am)

I insure a small regional bank in Wisconsin. They told me their FDIC premium was going from $35,000 in 09 to $$700,000! That's a 2000% increase! And you're right, we all pay.

Get It Right: (February 11, 2010 10:15am)

To'The Truth'. When FDIC head Shelia Bair says her agency might have to bolster the FDIC's insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there's an actual FDIC fund in need of bolstering. We were wrong. As a former FDIC chairman, Bill Isaac, points out here, the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government's general coffers for "spending . . . on missiles, school lunches, water projects, and the like." The insurance premiums aren't really premiums at all, therefore. They're a tax by another name. http://seekingalpha.com/article/95129-fdic-insurance-fund-it-doesn-t-actually-exist

Anonymous: (February 11, 2010 10:09am)

To the COMPLETE IDIOT at 9:44 am....... Where do you think the funds come from that the banks PAY into the FDIC so that there is a pool of money to "cover losses"......ever thought that those "FEES" YOU and everyone else pay on your bank statements would ever go towards the any of the "COSTS" that banks incur (such as the nifty FDIC insurance premiums they pay out)? Get a clue, the end consumer ALWAYS pays the bill no matter WHAT the issue, ALL costs are ALWAYS passed on to the consuder including all TAXES businesses are "charged". Business don't PAY taxes expenses or "fees", they COLLECT them from you. Wise up and understand how things work in your evey day life and just MAYBE you might get educated enough to understand why people are so ANGRY at our state of financial affairs in this country!

gravey: (February 11, 2010 10:05am)

"The Truth" you are mistaken. if you knew the history of the Federal Reserve and the FDIC then you would know the burden falls onto the taxpayer. The Treasury has no money. so the treasury goes down to the federal reserve and takes out a loan and who pays that off? you and me numbnutz. do a little research + diligence and maybe you will find the truth.

Get It right: (February 11, 2010 10:01am)

A Reply to 'The Truth'. When FDIC head Shelia Bair says her agency might have to bolster the FDIC's insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there's an actual FDIC fund in need of bolstering. We were wrong. As a former FDIC chairman, Bill Isaac, points out here, the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government's general coffers for "spending . . . on missiles, school lunches, water projects, and the like." The insurance premiums aren't really premiums at all, therefore. They're a tax by another name. http://seekingalpha.com/article/95129-fdic-insurance-fund-it-doesn-t-actually-exist

Hammered in SouthWest Florida: (February 11, 2010 10:00am)

i have the ability to pay my mortgage now and i cant get INDYMAC to agree to anything. i was not making any money before but i am making enough now and they just keep saying No to me.

hatnem: (February 11, 2010 9:56am)

boxsox fan.....please, get a clue. Obviously like me you're from Boston. You just put a black mark on the city with your comments. The banks have a very sweet deal here thanks to the FDIC, Fed guarantees, and Joe Taxpayer. The banks were pumped with cash from TARP funds to sell their MBS paper and promote lending, but are not lending to push the economy forward. And now the Feds are trying to encourage them to continue to hold more money in reserves rather than lend by increasing the excess reserves interest rate it (WE) pay the banks. The MBS market is a mess. The banks will take some up-front losses. A lot of people will be forced into a foreclosure and lose their homes. And the taxpayer has to foot the bill for all of it. In the end banks will PROFIT from all this, not suffer any losses.

MT Chair: (February 11, 2010 9:56am)

.... Add into the math per se the upfront closing costs on the original loan, the number of years of amortized payments BEFORE the shortsale/foreclosure... money, money, money!! The oldest rule in real estate - lend on a property, take back the property then lend on it again. - $$$$

The Truth: (February 11, 2010 9:50am)

Why don’t you, nut jobs read the FDIC’s Shared Loss Agreement with OneWest and the Master Agreement? You’ll find that OneWest assumes the first 20% of losses. Even if the FDIC does eventually share losses, they are based on the portfolio, and not on individual loans. So, the agreement does not affect OneWest’s decision on a loan by loan basis. OneWest has no incentive to pass up any cost-saving opportunities. As of today, the FDIC has not paid a penny to cover Shared Losses from this deal with OneWest. Get well, soon.

The Truth: (February 11, 2010 9:44am)

These two s*#t stirrers in the video are wrong. The taxpayer does not pay for FDIC losses, and the FDIC is not funded by the public. FDIC is an insurance pool - it’s collects premiums from its member banks. The FDIC pays for its own losses with their own funds collected from their members. The insurer (FDIC) covers losses when something bad happens. When the FDIC needs to BORROW money, they borrow from the US Treasury. Over time, they pay the Treasury back from the fees they collect.

Paula: (February 11, 2010 9:41am)

Is this really "new" news? http://preview.tinyurl.com/yk99gy4

James: (February 11, 2010 8:08am)

In addition to the corruption in the housing loan market, look at the corruption in the commercial market and how it has impacted the construction industry employment statistics. The flow-down from every corrupt decision by these banks is tremendous, and has impacts that most bankers and attorneys are either ignorant of, don't care, or are benefiting from. See the recent case of Reger Development v. National City Bank (another unethical bank) and others that reek of corruption an insider bank fraud.

MadInPVBFL: (February 11, 2010 8:05am)

bk: Thanks for the response. I live in Florida and I purchased the home in Jan 2005 for $165K with a conventional loan with 20% down. I refi'd in 2007 into an ARM to take cash out to pay off credit cards. I have put more than $60K of my own money into the house since then. On Dec 3rd, OWB sent me a letter to validate my debt. It says "If you dispute the debt in writing....the law requires us to stop our collection efforts (through litigation or otherwise) until we mail the info to you". I responded in writing in the timeframe permitted but they still foreclosed on Dec 24th! This is when their attorneys got involved which caused the additional fees. I'm not an attorney but I understood that to mean that I would have some time to get my repayment plan together.

bk: (February 11, 2010 7:10am)

Re:MadInPVBFL. Depending on the state you live in and the loan purpose (purchase, refi, cash-out) the lender may be able to foreclose and sue under the note. I'd suggest that you try to make up the full amount for reinstatement and then talk to an attorney. In most states, lenders need to demonstrate that late fees, attorney fees, etc are "reasonable."

jambo99: (February 11, 2010 7:07am)

bosoxfan, taxedtodeath has it right, you are so far off base you should be sent to the loony house. Like TTD, I am a small businessman that is TTD. Last year I paid nearly $750K on Fed Income tax. And over 100K in local tax. Guess what, some portion of my hard earned tax dollars went to bail out the banks and the failed stimulus that created no jobs but may have saved a few. I have a group of physicians who want to build a new building, they need in addition to the construction loan a $500K loan to operate on while the government holds their money for 120-150 days. That is 40K each to personally guarantee. Guess what, they cannot get a loan. There are no loans for small business, with small business creating 90% of the jobs and paying 70% of the taxes how do you propose to get the economy going again? Your comment, We have have put China's financial system on the brink of collapse is nonsense. China owns us. While a great amt of $$ the US is not a drop in the bucket to China.

Anonymous: (February 11, 2010 6:59am)

I had no choice this year but raise my deductions so high nothing gets taken out of my paycheck for Federal Income Tax. I qualify for Making Home Affordable, Tarp.. but I have been turned down by my mortgage lender 4 times so far. I get varied excuses like we need to deal with people who are 30, 60, and 90 days past due.. I am current.. Next excuse was I didn't have sufficient income to afford my payments even with a modification. But I have been current all along. Our household income dropped about $30,000 last year. I have did everything possible to cut wherever I can. I have refinanced by cars for lower payments. The only option left for me was to cut my deductions with taxes. I should be in a much better situation next year. If I owe a few grand.. That's what its going to have to be. When I owed money to the IRS, they were always good with setting up payments. I get nothing from my mortgage lender. It takes 3 to 6 months to receive an answer when you ask the lender for a mod.

JPL: (February 11, 2010 6:36am)

This is a shocking video. I'm surprised that we haven't seen this story in mainstream news, but I'm sure it's only a matter of time.

TaxedToDeath: (February 11, 2010 5:58am)

bosoxfan, You have lost your mind. I have not paid less than 20K in taxes in a single quarter since 1998 at an effective rate of 50% by the time phased out deductions, state taxes and laws that punish small business owners are factored in, and I resent every damn penny of it! I don't care how much the banks make as long as the government doesn't use my money to bail them out, at the same time those same banks refuse to loan money to small businesses while simultaneously sticking it to people in a tight spot like MadInPVBL. And before you start championing the efforts of US Banks over the European banks, you need to go investigate to whom the lion's share of the 180 billion that went AIG was dolled out. The European banks are laughing hard at people like you who do not have a clue.

bosoxfan: (February 11, 2010 5:45am)

Who cares what these US banks do anyway? This is all China's money that we're never going to pay back. Most people who complain about "taxpayer's money" probably never paid more than 20 grand in taxes in any year of their life. If it bothers you, make believe all your tax money goes to something you support, like body armor and new weapons for the military for some, windmills and new schools for others, whatever cause you feel good about your money going toward. Did you ever notice people who make LOTS of money never seem to be squawking about what their tax money is spent on? They spend their time trying to make more money so it won't matter. 50 years ago all the big banks were German, Dutch or Swiss. Now in just a short 20-30 years these enormous US banks have turned the Europeans into also-rans, while at the same time borrowing so much money from China that we have put their financial system on the brink of collapse. Not a bad days work. And these greedy bankers live and spend here!

nxid: (February 11, 2010 5:44am)

UMM you guys are silly. We had two choices: give "incentives" to healthy banks to spend and buy those bad debts or get used to living in a madmax type of world. I agree with everyone that decided to bail out the banks!

MadInPVBFL: (February 11, 2010 5:15am)

I missed my Oct payment with OWB. On Nov 17th they told me to pay up by Dec 18th or else. I wrote to them and said I wouldn't be able to pay until after the new year. On Jan 15th I called to make the late payments. I owed them $4564 for 4 payments. They told me my reinstatement amount was now $11,332 because they added Attorney fees, etc!! I owe them $153K and my house is worth about $230K. They refuse to remove the attorney fees and won't accept anything less than the full amount of $11K! I spoke to [email protected] and she referred me to escalation specialist [email protected] who offered me a repayment plan but the plan still included the additional fees which I can't afford to pay! OWB cannot find my original note because it has been lost or destroyed. If they foreclose on me, is it true that someone can come along later with the original note and sue me again?

mike in bakersfield: (February 11, 2010 4:30am)

subscribe to the show. these guys do great stuff everyday and its free.

overwhelmed: (February 11, 2010 4:12am)

I agree Indy reversed there dicission but only because this client had someone on top of it. How many other people have they done this too? That didnt have someone fighting for tem. HSBC conacted me and offered me a loan mod and then out of the blue 7 months later told me they no longer do loan mods I would have to go through AAcorn. I then sent all the paper work in to AAcorn and they said I did not qualify because I made to much money..I thought it was a good thing to be over qualified.. that way I could actally make the payments. Well we all know how AAcorn turned out. I did not vote for Obahma, yet honestly I do not believe he knew how dishonest and greedy the banks really are. I think he got a good dose of politics and educated very quickly on this one. I dont think he likes the egg on his face, he skirts the issue now. But it is still here! Lets get that CHANGE going!

DD: (February 11, 2010 2:44am)

SAS, IM WITH YOU, WE AS THE PEOPLE AND NEED TO FIGHT BACK, ABOUT A YEAR OR 18 MO AGO THEIR WAS SOME INFORMATION ONT HE WEB ABOUT HOW THE GOVERNMENT WORKS AND WHAT HAPPENS WHEN WE THE PEOPLE PURCHASE A HOME,,AND I CANT REMEMBER THEOTHER GUYS NAME I READ THE POST OF TONIGHT. aNY WAY I'LL GO BACK AND ADDRESS THAT LATER.. THE INFORMATION HAS DISAPEARED FROM ALL SITES,, i DO HAVE A COPY I REC RECENTLY FROM A GOOD FRIEND.. yOU WHO REALLY CARE AND WANT TO DO SOMETHING FOR YOURSELF OR THOES CLOSE TO YOU I HAVETHE DOCUMENTS THAT ARE NO LONGER AVAILABLE TO THE PUBLIC.. aLSO THE GUY WHO STATES THAT THEIR IS A WAY TO FIGHT TO KEEP YPUR HOME.. I WILL BE CONTACTING YOUR EMAIL THAT YOU HAVE DISCLOSED.. AND YOU THE ONE THWO SOULDS GREEDY AS HELL AND HAS NOTHING BETTER TO SATE THAN REMARKS ABOUT PEOPPELAS SPELLING,,, WELL NONE OF WHAT MAKES SENSE IT'S NOT YOUR BUSINESS SO STAY OUT..MY EMAIL ADDRESS IS [email protected].. LETS TALK AND COMPARE NOTES,,d

DD: (February 11, 2010 2:41am)

SAS, IM WITH YOU, WE AS THE PEOPLE AND NEED TO FIGHT BACK, ABOUT A YEAR OR 18 MO AGO THEIR WAS SOME INFORMATION ONT HE WEB ABOUT HOW THE GOVERNMENT WORKS AND WHAT HAPPENS WHEN WE THE PEOPLE PURCHASE A HOME,,AND I CANT REMEMBER THEOTHER GUYS NAME I READ THE POST OF TONIGHT. aNY WAY I'LL GO BACK AND ADDRESS THAT LATER.. THE INFORMATION HAS DISAPEARED FROM ALL SITES,, i DO HAVE A COPY I REC RECENTLY FROM A GOOD FRIEND.. yOU WHO REALLY CARE AND WANT TO DO SOMETHING FOR YOURSELF OR THOES CLOSE TO YOU I HAVETHE DOCUMENTS THAT ARE NO LONGER AVAILABLE TO THE PUBLIC.. aLSO THE GUY WHO STATES THAT THEIR IS A WAY TO FIGHT TO KEEP YPUR HOME.. I WILL BE CONTACTING YOUR EMAIL THAT YOU HAVE DISCLOSED.. AND YOU THE ONE THWO SOULDS GREEDY AS HELL AND HAS NOTHING BETTER TO SATE THAN REMARKS ABOUT PEOPPELAS SPELLING,,, WELL NONE OF WHAT MAKES SENSE IT'S NOT YOUR BUSINESS SO STAY OUT..MY EMAIL ADDRESS IS [email protected].. LETS TALK AND COMPARE NOTES,,d

DD: (February 11, 2010 2:38am)

SAS, IM WITH YOU, WE AS THE PEOPLE AND NEED TO FIGHT BACK, ABOUT A YEAR OR 18 MO AGO THEIR WAS SOME INFORMATION ONT HE WEB ABOUT HOW THE GOVERNMENT WORKS AND WHAT HAPPENS WHEN WE THE PEOPLE PURCHASE A HOME,,AND I CANT REMEMBER THEOTHER GUYS NAME I READ THE POST OF TONIGHT. aNY WAY I'LL GO BACK AND ADDRESS THAT LATER.. THE INFORMATION HAS DISAPEARED FROM ALL SITES,, i DO HAVE A COPY I REC RECENTLY FROM A GOOD FRIEND.. yOU WHO REALLY CARE AND WANT TO DO SOMETHING FOR YOURSELF OR THOES CLOSE TO YOU I HAVETHE DOCUMENTS THAT ARE NO LONGER AVAILABLE TO THE PUBLIC.. aLSO THE GUY WHO STATES THAT THEIR IS A WAY TO FIGHT TO KEEP YPUR HOME.. I WILL BE CONTACTING YOUR EMAIL THAT YOU HAVE DISCLOSED.. AND YOU THE ONE THWO SOULDS GREEDY AS HELL AND HAS NOTHING BETTER TO SATE THAN REMARKS ABOUT PEOPPELAS SPELLING,,, WELL NONE OF WHAT MAKES SENSE IT'S NOT YOUR BUSINESS SO STAY OUT..MY EMAIL ADDRESS IS [email protected].. LETS TALK AND COMPARE NOTES,,d

DD: (February 11, 2010 2:36am)

SAS, IM WITH YOU, WE AS THE PEOPLE AND NEED TO FIGHT BACK, ABOUT A YEAR OR 18 MO AGO THEIR WAS SOME INFORMATION ONT HE WEB ABOUT HOW THE GOVERNMENT WORKS AND WHAT HAPPENS WHEN WE THE PEOPLE PURCHASE A HOME,,AND I CANT REMEMBER THEOTHER GUYS NAME I READ THE POST OF TONIGHT. aNY WAY I'LL GO BACK AND ADDRESS THAT LATER.. THE INFORMATION HAS DISAPEARED FROM ALL SITES,, i DO HAVE A COPY I REC RECENTLY FROM A GOOD FRIEND.. yOU WHO REALLY CARE AND WANT TO DO SOMETHING FOR YOURSELF OR THOES CLOSE TO YOU I HAVETHE DOCUMENTS THAT ARE NO LONGER AVAILABLE TO THE PUBLIC.. aLSO THE GUY WHO STATES THAT THEIR IS A WAY TO FIGHT TO KEEP YPUR HOME.. I WILL BE CONTACTING YOUR EMAIL THAT YOU HAVE DISCLOSED.. AND YOU THE ONE THWO SOULDS GREEDY AS HELL AND HAS NOTHING BETTER TO SATE THAN REMARKS ABOUT PEOPPELAS SPELLING,,, WELL NONE OF WHAT MAKES SENSE IT'S NOT YOUR BUSINESS SO STAY OUT..MY EMAIL ADDRESS IS [email protected].. LETS TALK AND COMPARE NOTES,,d

DD: (February 11, 2010 2:33am)

SAS, IM WITH YOU, WE AS THE PEOPLE AND NEED TO FIGHT BACK, ABOUT A YEAR OR 18 MO AGO THEIR WAS SOME INFORMATION ONT HE WEB ABOUT HOW THE GOVERNMENT WORKS AND WHAT HAPPENS WHEN WE THE PEOPLE PURCHASE A HOME,,AND I CANT REMEMBER THEOTHER GUYS NAME I READ THE POST OF TONIGHT. aNY WAY I'LL GO BACK AND ADDRESS THAT LATER.. THE INFORMATION HAS DISAPEARED FROM ALL SITES,, i DO HAVE A COPY I REC RECENTLY FROM A GOOD FRIEND.. yOU WHO REALLY CARE AND WANT TO DO SOMETHING FOR YOURSELF OR THOES CLOSE TO YOU I HAVETHE DOCUMENTS THAT ARE NO LONGER AVAILABLE TO THE PUBLIC.. aLSO THE GUY WHO STATES THAT THEIR IS A WAY TO FIGHT TO KEEP YPUR HOME.. I WILL BE CONTACTING YOUR EMAIL THAT YOU HAVE DISCLOSED.. AND YOU THE ONE THWO SOULDS GREEDY AS HELL AND HAS NOTHING BETTER TO SATE THAN REMARKS ABOUT PEOPPELAS SPELLING,,, WELL NONE OF WHAT MAKES SENSE IT'S NOT YOUR BUSINESS SO STAY OUT..MY EMAIL ADDRESS IS [email protected].. LETS TALK AND COMPARE NOTES,,d

DD: (February 11, 2010 2:30am)

SAS, IM WITH YOU, WE AS THE PEOPLE AND NEED TO FIGHT BACK, ABOUT A YEAR OR 18 MO AGO THEIR WAS SOME INFORMATION ONT HE WEB ABOUT HOW THE GOVERNMENT WORKS AND WHAT HAPPENS WHEN WE THE PEOPLE PURCHASE A HOME,,AND I CANT REMEMBER THEOTHER GUYS NAME I READ THE POST OF TONIGHT. aNY WAY I'LL GO BACK AND ADDRESS THAT LATER.. THE INFORMATION HAS DISAPEARED FROM ALL SITES,, i DO HAVE A COPY I REC RECENTLY FROM A GOOD FRIEND.. yOU WHO REALLY CARE AND WANT TO DO SOMETHING FOR YOURSELF OR THOES CLOSE TO YOU I HAVETHE DOCUMENTS THAT ARE NO LONGER AVAILABLE TO THE PUBLIC.. aLSO THE GUY WHO STATES THAT THEIR IS A WAY TO FIGHT TO KEEP YPUR HOME.. I WILL BE CONTACTING YOUR EMAIL THAT YOU HAVE DISCLOSED.. AND YOU THE ONE THWO SOULDS GREEDY AS HELL AND HAS NOTHING BETTER TO SATE THAN REMARKS ABOUT PEOPPELAS SPELLING,,, WELL NONE OF WHAT MAKES SENSE IT'S NOT YOUR BUSINESS SO STAY OUT..MY EMAIL ADDRESS IS [email protected].. LETS TALK AND COMPARE NOTES,,d

DD: (February 11, 2010 2:28am)

SAS, IM WITH YOU, WE AS THE PEOPLE AND NEED TO FIGHT BACK, ABOUT A YEAR OR 18 MO AGO THEIR WAS SOME INFORMATION ONT HE WEB ABOUT HOW THE GOVERNMENT WORKS AND WHAT HAPPENS WHEN WE THE PEOPLE PURCHASE A HOME,,AND I CANT REMEMBER THEOTHER GUYS NAME I READ THE POST OF TONIGHT. aNY WAY I'LL GO BACK AND ADDRESS THAT LATER.. THE INFORMATION HAS DISAPEARED FROM ALL SITES,, i DO HAVE A COPY I REC RECENTLY FROM A GOOD FRIEND.. yOU WHO REALLY CARE AND WANT TO DO SOMETHING FOR YOURSELF OR THOES CLOSE TO YOU I HAVETHE DOCUMENTS THAT ARE NO LONGER AVAILABLE TO THE PUBLIC.. aLSO THE GUY WHO STATES THAT THEIR IS A WAY TO FIGHT TO KEEP YPUR HOME.. I WILL BE CONTACTING YOUR EMAIL THAT YOU HAVE DISCLOSED.. AND YOU THE ONE THWO SOULDS GREEDY AS HELL AND HAS NOTHING BETTER TO SATE THAN REMARKS ABOUT PEOPPELAS SPELLING,,, WELL NONE OF WHAT MAKES SENSE IT'S NOT YOUR BUSINESS SO STAY OUT..MY EMAIL ADDRESS IS [email protected].. LETS TALK AND COMPARE NOTES,,d

The Truth: (February 11, 2010 1:22am)

These two s*#t stirrers in the video are wrong. The taxpayer does not pay for FDIC losses, and the FDIC is not funded by the public. FDIC is an insurance pool - it’s collects premiums from its member banks. The FDIC pays for its own losses with their own funds collected from their members. The insurer (FDIC) covers losses when something bad happens. When the FDIC needs to BORROW money, they borrow from the US Treasury. Over time, they pay the Treasury back from the fees they collect.

Bad Shot : (February 10, 2010 11:34pm)

Bullets are cheap... Real cheap. 40 cents a solution... Get my meaning?

assetback: (February 10, 2010 9:53pm)

One thing you have to confirm is whether the loans are owned by One West or by a securitization trust. The money from the short sale would then go to the trust, as the owner of the loan, not to One West. There are other dynamics to the agreement that do protect One West.

Mikal: (February 10, 2010 9:27pm)

It's even worse. Indy never loaned anything to anyone. The money came from investors like pension funds. It and OneWest are "pretender lenders" literally stealing the money.

Mikal: (February 10, 2010 9:25pm)

It's even worse. Indy never loaned anything to anyone. The money came from investors like pension funds. It and OneWest are "pretender lenders" literally stealing the money.

Anonymous: (February 10, 2010 8:38pm)

What the Government should have done was temporarily suspended arms.. People in arms would have to immediately move to a fixed rate. Those who are in default or foreclosure, should start back from scratch with fixed rates. I agree these people signed a contract to buy those homes on an ARM.. But it is a crisis.. No different than bailing out banks for careless lending policies.. No different than bailing out GM and Chrysler for making stupid decisions.. at least we the people would have got the break.. There is another wave of ARMS about to reset.. and some economists are saying this could affect 2 million homes.

spbxn: (February 10, 2010 8:22pm)

Yes, we the tax payers are left holding the bag. There does need to be some policy change for sure. Hmmm. .. follow the money, particularily George Soros' campaign contributions.

Just Saying: (February 10, 2010 7:58pm)