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Saturday, 9 October 2010

Takin' Care of Business

An article in The New York Post reminds me how precious childhood is....

Lupe Fuentes is possibly better known to aficionados of pornography as "Little Lupe"; a elfin like woman who could pass herself off as under-aged. Lupe is now in dispute with her former boss who bought the rights to "Little Lupe" for his website (no, I'm not providing a link). 

All of a sudden Ms Fuentes had got all precious about her "nom de porn" and is seeking to get that name back from her ex boss. Apparently "Little Lupe" has a special significance for the porn star. As a child her parents used to call her "Little Lupe" so it's quite special to her. 

Oh for goodness sake ! Will someone pass the sick bucket, please. 

It's always nice to view the mess in your neighbour's garden; it stops you worrying about the state of your own. So the latest twist in the great American tragedy that is the mortgage market, provides ample diversion.

Today's Bloomberg (I know, the man who runs New York and its Soda Fountain) carries a story that has all the makings of a re-run of the sub prime mortgage melt-down that nearly did it for Capitalism. The tale of  "The man who had no mortgage faced foreclosure anyway" is chilling.

In brief so keen were America's banks to sell mortgages and their derivatives that they didn't bother too much about the supporting paperwork.To make matters worse so keen were  the banks to foreclose that they didn't rigorously check the documentation. In their view most of the mortgagees were suspect anyway - so why waste time and money.

It came as quite a shock to one home owner who didn't have a mortgage to find that a bank foreclosed on his house anyway. In his case not only was the bank crap so were the courts ; since they had authorised the foreclosure. And slowly the pitiful picture emerges. Courts have discovered that foreclosure orders cannot be enforced because, quite simply, the documentation is in such a mess. Bank A reckons Mr B's mortgage is in default - except there ain't no paper trail. 

Now, Bank of America have put all its foreclosures on hold; other banks are following suit. 

And why? - because, in a cost saving exercise (saving $1 billion in fees) 60 million mortgages were transferred to a massive database without recording the details. All the banks appear to have been concerned about was packaging these mortgages up and selling them on. 

It would appear that trillions of dollars' worth of transactions are affected in this way. The banks call this a mere technical error. 

At the moment it's a minor story in the financial press but with the Senate sniffing around and the US economy stalling with its housing market continuing to flatline this is likely to cause wider concern.

So next time you see one of those oh so re-assuring ads from your ever lovin' high street bank just remember they don't give a toss.

1 comment:

The Sagittarian said...

Bloody hell, what mess! Or as my UK aunt would say "streuth"!!

The old have an dhave not battle, birn back robin hood.