Foreclosure Fraud 2.0...

…appears to be on the horizon.  As the actual data on foreclosures and defaults gradually and steadily ticks upward, other data–including particularly a spike in household debt led by increased mortgage debt and recent consumer credit card binges–suggests that very soon it may be 2008 all over again and that a residential real estate market correction is imminent.  Most recent data shows that, in March 2022 foreclosures were up 29 percent from the previous month and 181 percent from March 2021.

If a real estate market correction is imminent, then the process will likely be much different, and for many potentially much more challenging, than it was from 2008 to 2014.  It will be different because in 2008 the problem from the point of the view of the powers that be (PTB) was that there was too little “liquidity.”   That is, the bad gamblers on Wall Street did not have enough money to pay their bad debts so new money had to be added to the system so they could pay off their bad bets.  As things stand right now, the bailout banks have $3.8 trillion in bailout dollars on deposit with the Federal Reserve.  This is high powered monetary base.  If and when the depositors (Fed member banks) withdraw it and lend it into the economy it has the potential to materially increase the money supply and therefore inflation.  Unlike 2008, now the U.S. banking system is awash in actual and potential “liquidity.”

The reason this money has not escaped into Main Street circulation is that the Federal Reserve has been paying interest on these reserves since 2008.  Since October of 2008, the Federal Reserve has been incentivizing American banks not to lend to Main Street.  Interest on excess reserves (IOER), now interest on all reserves (IOR), was the brainchild of Ben Bernanke’s mentor and Fed governor Stanley Fischer.  In the 1980’s, Fischer was an Israeli central banker and experienced Israel’s mass inflation first hand.  IOER/IOR operates like a Main Street lending spigot.  If banks can make more on riskless IOER/IOR than they can by lending into a risky Main Street economy, then they will keep their reserves deposited with the Fed.  If the Fed started charging rent on reserves rather than paying interest, the U.S. would likely experience a Weimar Republic-like currency collapse.  The post-pandemic inflation is not a result of the 2008 bailouts, it is the result of the 2020-to date direct stimulus payments.  The Fed’s M1 chart provides clear evidence of this.

If we are about to experience a controlled demolition of the real estate market (and other markets) the excess reserves sitting on deposit with the Fed therefore represent a potential weapon of mass confiscation.  Very large institutional buyers, like BlackRock and Berkshire Hathaway, are already flush with cash and for several years have been surreptitously scooping up properties nationwide.  In an economic downturn, the well-funded Wall Street cronies with lots of cash will be good credit risks, certainly better credit risks than most in the Main Street economy.  Whale real estate investors with cash on hand and access to much more makes a future foreclosure crisis doubly perilous for Main Street homeowners who are already on their heels from the economic shutdowns related to the pandemic narrative.

And at the same time, if Foreclosure Fraud 2.0 visits Main Street soon, much also will be similar to the 2008 to 2014 time period.  This is because the underlying problem in 2008–62 million fatally void securitized mortgages–has never been remedied.

The 2008 financial crisis awakened millions of debt-saturated Main Street homeowners to the fact they may have made some bad choices while under the intoxicating influence of five years of artifically low interest rates from 2003 to 2008.  It also awakened Wall Street to the fact that the Federal Reserve’s low-interest soma had caused Wall Street, in its frenzy to profit from residential mortgage securitization, to fail to dot its i’s and cross its t’s in its pretend “securitization” of 62 million residential real estate loans.

Read the Whole Article