This Must Not Stand

A court in Ohio ruled that mortgage lenders don’t get a mulligan on their foreclosure paperwork – present the court fake papers made out of play-dough and they could get the same sanction that I would get for doing that. The sarcastic side of me wonders how long it will take for the House Judiciary Committee to jump on this unsupportable extension of the rule of law to our social betters.

On the other hand, my non-sarcastic side wonders exactly who does have the power to impose the terms of a mortgage if the bank doesn’t. Does the note revert to the originator of the mortgage? Many of those fly-by-night outfits already flew away in the night. It is clearly appropriate to punish banks for acting like laws don’t apply to them. Still, you have to wonder what happens when the power to enforce a mortgage just sort of floats off into the clouds. Anyone know?

151 replies
  1. 1
    Uloborus says:

    Last time we discussed this, the answer was ‘No. No one knows, and that’s why this is so spooky.’

    Perhaps we were wrong then, and someone can explain it better this time!

  2. 2
    The Republic of Stupidity says:

    Still, you have to wonder what happens when the power to enforce a mortgage just sort of floats off into the clouds. Anyone know?

    Really, really good question… and don’t have the foggiest on my part… what a faaaaaaaaaaaaabulous fustercluck our beloved banksters have created here for all of us to deal w/… I foresee a growth industry in straightening out farked up mortgages over the next few years.

  3. 3
    LarsThorwald says:

    An author who specializes in India was on C-Span this morning, and he was comparing the United States and India, and he had some very astute things to say about how Americans are in a period where they view their own prospects far worse than those outside the United States view U.S. prospects.

    He listed, by way of example, areas in which the United States has “century” advancements over other nations, including a burgeoning India.

    One of the areas he cited was our legal system.

    far from perfect, yes, but as one who practices in courts at the federal level on issues of statutory and constitutional interpretation, I can attest that for the most part judges (and the attorneys who practice before them) try and serve justice — true justice. And for the most part they get it right.

    As I look at the ridiculousness that the political branches have become, I take some measure of comfort from the fact that there is a vibrant independent judiciary willing to step in and call shots on things that still matter. Striking down DADT as unconstitutional, striking down gay marriage bans as unconstitutional, and things like this.

    No one in the political branches is going to hold corporations accountable. Judges just may.

  4. 4
    MattF says:

    Well, if the fly-by-nighter went bankrupt, then the mortgage was an asset that got assigned to some creditor. So… they’re probably all wedged behind a file cabinet in some lawyer’s office in Boca.

  5. 5
    LarsThorwald says:

    And I just want to add that one of my favorite topics in law school was contracts.

    The development of contract law is just an absolutely beautiful thing.

    Who enforces it? The parties. What happens if a party doesn’t meet obligations? That party forfeits.

    I have absolutely no problem with the courts reaching the very conclusions reached in this case.

  6. 6
    Jinchi says:

    On the other hand, my non-sarcastic side wonders exactly who does have the power to impose the terms of a mortgage if the bank doesn’t.

    If nobody can claim proof of ownership, then nobody gets to impose the terms of the mortgage. But, it’s pretty unbelievable that nobody knows who owns these things. When you mail in your monthly payment, it seems to know how to get cashed.

  7. 7
    dday says:

    Bankruptcy judges or even the judges in these foreclosure courts could create new equitable mortgages out of the unsecured debt on behalf of the investors (even if the mortgage is not enforceable, the debt remains, it’s just not secured by collateral, i.e. the house). The judges would have substantial discretion to alter the terms of the new mortgages. It could come to this.

  8. 8
    Dr. Squid says:

    Better link? I refuse to go to FDL unless the word ‘tbogg’ is in front of it.

  9. 9
    Nutella says:

    I’m glad to hear they’re talking perjury for banks and their lawyers knowingly filing false papers in court.

    That was the thing that most shocked me about Taibbi’s story on the Florida foreclosure court (partial link). He told the story of the bank coming to court with papers with a clear false statement which was challenged by the homeowner’s lawyer, so the bank just refiled amended papers, which were also wrong and challenged, over and over again for the same case. It was shocking that the case wasn’t thrown out and the bank wasn’t charged with perjury.

    Go Ohio! Apparently a much better place to live than Florida.

  10. 10
    Doug says:

    If no one can demonstrate that they have the right to foreclose the lien, then the lien will not be foreclosed.

    There would still be a lien on the property records presumably. This could be in the original lender’s name, who as far as the property law is concerned would still have the right to foreclose regardless of whatever essentially side deals they made about transferring those rights to others.

    Usually, even if something is dissolved or bankrupt there is some kind of trustee or successor in interest that would still theoretically have the right to collect.

    As a practical matter the next step for some homeowners might be a suit to quiet title to remove the lien from the property records. If no one could step up and demonstrate that the lien is valid and they have a right to collect it, the court would presumably clean it off there.

    The homeowner might still owe income tax though on the benefit gained from the discharge of the uncollected debt.

  11. 11
    Patrick says:

    The banks can enforce the mortgages, they just can’t do it with fraudulent documents. Not sure why Tim is confused on that.

  12. 12
    eric says:

    @LarsThorwald: let me add as someone that appears in courtrooms where foreclosures are pending….the overwhelming sentiment in the room is that this is a bad thing and there is no “rush” to judgment…I have never seen a homeowner challenge the underlying documents…most are looking for modifications from their lender trying to forestall the inevitable as most banks are trying to do everything reasonable to avoid taking on more “inventory” in a down market.

    commercial matters are trickier because it turns out the some of the borrowers (single purpose llcs) may not have been forthright in their loan materials and the personal guarantees become the big issue. Again, I have never seen anyone “seriously” challenge the authenticity of loan documents or assignments.

  13. 13
    eric says:

    @Doug: strikes me that there might be a claim for slander of title if there is no basis for the recorded lien.

  14. 14
    Michael says:

    Actually, it isn’t a mystery at all.

    The loan is unsecured. you can always cure a screwed up note, but the security aspect is upgefucht.

    The lender/assignee then gets to sue on the breach, get a judgment, take out a judgment lien and be prioritized behind all other judgment liens.

    The upshot is that nobody gets a “free house”, and the lender takes a sizeable haircut, somewhere behind the line and subject to the debtor’s BK exemption.

  15. 15
    hueyplong says:

    Maybe I’m slow, but this seems like a no-brainer. When you or I lose the documents that allow us to do something, we simply can’t do it anymore.

    Same thing for banks. They can still sue for the debt, but it ain’t collateralized/secured anymore. Poor babies.

  16. 16
    eric says:

    @hueyplong: it depends. enforcing a lien may be barred; but if the funds were dispersed and received by the homeowner, then the dispersing party has some form of unjust enrichment claim (unless such claims are barred by the state’s lien act) or perhaps a promissory estoppel claim (unless barred by some state credit act that requires writings). Most states will allow actions to proceed on the contract claim even if there is no contract if it can be established by sworn testimony that there was a contract, the contract has set terms and there was performance. In this case, the borrower likely made at least one payment that will allow for all of those elements to be satisfied.

  17. 17
    Paul_D says:

    Some loans (like credit cards or college loans) can “float off into the clouds”. The Statute of Limitations would apply when the loan was agreed / signed begins running from the day the debt – or payment on an open-ended account – was due, though the number of years vary on a state-by-state basis.
    If X number of years pass from when the loan was agreed / signed and no successful collection has been made by the lender, then the lender must “eat the loan” as they say in the collection business. The outstading loan, with all of its warts however, will appear on the borrowers’ cerdit report for 7 years thereafter.

  18. 18
    Suffern ACE says:

    @LarsThorwald: Those judges are churlish. Definitely in the churlish camp.

  19. 19
    Villago Delenda Est says:

    This notion that Galtian overlords must produce verifiable signatures and documents in support of their claims in court is socialist, communist, and Marx running wild over the Invisible Sky Buddy given rights of the Galtian overlords.

    This “due process” socialist nonsense CAN NOT STAND!

    I call on the good people of Charleston to open fire on Fort Sumter!

  20. 20
    Doug says:

    It’s been alluded to above, but I think it’s important to be clear that the mortgage and the loan note are two related but different things. The mortgage secures the loan with the subject real estate. Sometimes the mortgage might evaporate but the loan note remains valid.

    If a bank or investor bought a loan and its mortgage from another lender and the mortgage turns out to be defective, the bank or investor may well have a cause of action against the person who sold it to them (depending on the terms of their agreement.)

  21. 21
    hueyplong says:

    I’d argue the other side, eric. The bank got what it was entitled to when it got an agreement to repay with interest and cooperation in executing documents about the lien/mortgage.

    If it then mucked things up without any wrongdoing by the borrower, then tough luck. The extraordinary remedies they get are statutory and should be interpreted narrowly against them.

  22. 22
    eric says:

    @Doug: it gets even more interesting if the loan flowed through the FDIC after a takeover….good times all around.

  23. 23
    daveNYC says:

    But, it’s pretty unbelievable that nobody knows who owns these things. When you mail in your monthly payment, it seems to know how to get cashed.

    Given the ethics we’ve seen displayed by some of the players in this game, I don’t think they’d lose much sleep cashing any check that came their way.

    The obvious solution to this is for the banks to hire extra people and have them put in the real effort to tie up all the lose ends on these mortgages the right way. No robo-signing, no rolling dice to generate dates. But that would take real money and would cut into their profit margin.

    That’s the thing that kills me about this mess, there is a solution, it’s just not cheap, quick, or easy; and these days, the finance industry doesn’t like to play that way.

  24. 24
    burnspbesq says:


    This is probably pretty close to the right answer. If the security interest is unperfected, what you have is an unsecured obligation. If a homeowner who has defaulted on an unsecured obligation gets sued on it and the creditor gets a judgment, that unsecured creditor would have all of the remedies that any other unsecured creditor would have. You could still end up with the house being sold for the benefit of creditors.

    Or if a property is encumbered by both a first mortgage and a HELOC, and the paperwork for the first is screwed up and the HELOC is OK, the holder of the HELOC steps to the front of the line.

  25. 25
    burnspbesq says:


    “the bank or investor may well have a cause of action against the person who sold it to them (depending on the terms of their agreement.)”

    Alternatively, the securitization trust may have a put that enables it to exchange the unsecured note for a secured note or cash. Of course, if the originator is toes up, exercising the put may not get the trust anywhere.

    The only clear winners here are insolvency lawyers.

  26. 26
    The Republic of Stupidity says:

    @Villago Delenda Est:

    You forgot to mention that the sheriff’s a ni***er!

  27. 27
    Xenos says:

    The basic rule is that if a secured interest is wiped out, the secured interest can not be revived. This is why there is a note and a mortgage – the mortgage can not be enforced without a note, but the note continues as an unsecured debt if the mortgage goes poof, or was never properly established, and so on.

    This means the house may be safe, but the borrower needs a bankruptcy court to discharge the debt. Otherwise the note-holder can prosecute to collect, and eventually execute on the house. The key thing is that this is all terribly state-based law, and statutes of limitations will different, rules for exemptions and exclusions will be different from state to state. And this does not even get into issues such whether we are talking about lien-theory or title-theory states.

    In any case, if a party that can not prove it is properly the note-holder and mortgagee gets barred from foreclosing, then there is probably someone out there, such as the originating bank, that still holds the right to foreclose… And if they no longer exist, then there is a receiver out there who can come out of the woodwork to foreclose many years later. I know of a condo in West Springfield, MA that has sat empty since 1988 because the cost of sorting out the title is still so much more than what the property is worth.

  28. 28
    singfoom says:

    That’s great news! I hope that ruling echoes outside of Ohio and becomes the Law of the Land nationwide. It has been absolutely ridiculous to see the deference given to the banks by the courts when it comes to foreclosure.

    Now if the States AGs can get together and actually jail some of the white collar criminals engaged in foreclosure fraud, that would be awesome.

    Go go rule of law!

  29. 29
    Pink Snapdragon says:


    @eric: Wrong. Elementary property law from the first year of law school. Contracts regarding real property, or that will be performed over a period longer than a year must be in writing or they are not enforceable. It’s called the statute of frauds. What the Ohio rule says is that the lender’s case is dismissed without prejudice. This means that the lender can refile the case. Of course, if they refile, they had better have their ducks in a row before they do it. Many, if not most of them, won’t be able to do this. It doesn’t mean that the loan went away. If the banks couldn’t follow the requirements of the law that apply to anybody trying to enforce a contract, they are just out of luck. If the bank can’t show a clear chain of title, too bad. They did it to themselves. The law is not designed, or intended, to protect banks from themselves. With all of the resources and brilliant legal and financial minds they have available to set up their systems, they have no one to blame but themselves. It’s about time that courts and judges start enforcing the elementary requirements of the legal system that are supposed to apply to all litigants.

  30. 30
    burnspbesq says:

    I hope I’m wrong about this, but could paperwork screw-ups actually result in a windfall to the lender?

    Think about California, where by statute purchase money loans secured by a deed of trust are non-recourse. If the lender forecloses on the deed of trust, they can get the property, but if there is a deficiency they can’t go after the borrower for it. If the lender sues the borrower without relying on the deed of trust, can they collect more than the value of the house? I don’t know the answer, do any of you?

  31. 31
    singfoom says:

    @burnspbesq: I don’t know the answer to that either, but I would put money that a large large amount of cash will be paid to lawyers in order to push a specific answer to that question.

  32. 32
    eric says:

    @Pink Snapdragon: I am talking about the note. It is simply a contract for the loaning of money with a promise of repayment. that is not the same as the contract between home buyer and home seller which is for the sale of real property. the note should not be barred by the statute of frauds. the home sale contract is barred; but even then there can be exceptions.

  33. 33
    change says:

    It begins, liberals.

    We repeal ObamaCare next week!

  34. 34
    Joe Buck says:

    Actually, they still get a mulligan: “dismissed without prejudice” means that they can bring the case again, it’s just that they have to start over from the beginning. So if they really own the mortgage and can prove it, they can eventually prevail.

  35. 35
    eric says:

    @burnspbesq: but in the end, if there is a homestead exemption in bankruptcy and the house is the only real asset, isnt it likely that the homeowner BKs and tells the new-found unsecured creditor to pound sand?

  36. 36
    Evolutionary says:

    to all of you who know what you are talking about: I thought the problem was that the records of the mortgages/liens being transfered were not being recorded in local courthouses and the screw-ups of the system the banksters set up to do it for them as the loans were sliced, diced and repackaged makes it difficult to prove in court who actually owns the lein on an individual. Correct?

  37. 37
    Xenos says:

    @change: Next week? What is the rush?

  38. 38
    change says:

    This massive bill with thousands and thousands of pages burdensome regulations and new taxes will be started down the road into the dustbin of history!

    It’s the “bi-partisan” position, too, since no doubt some patriotic democrats will vote for it as well.

  39. 39
    Bella Q says:

    @Patrick: Here’s the thing: many of these mortgages and notes have been sold so many times, or sliced and sold in bundles, with sloppy recording of the transfers, that the foreclosing banks may not have documents that aren’t, in essence, fraudulent. Because at the time everyone was busy making a buck off the transfers, they weren’t as concerned with things like clear chain of title…

  40. 40
    eric says:

    @Evolutionary: i believe you are correct, which is also why someone upthread noted that the “packagers” could be in big trouble if they fraudulently or negligently represented facts about the loans in the portfolio to the purchasers

  41. 41
    Villago Delenda Est says:

    @Joe Buck:

    So if they really own the mortgage and can prove it, they can eventually prevail.

    This is the gist of the nub, right here. They don’t have the paperwork to prove it, thanks to the entire mortgage “securitization” scam. They don’t have a chain of custody on the note. Without that, they’re up the creek without a paddle, no matter how many times they refile. Until they shop for a judge who will give the old wink wink nudge nudge to them. I suggest Fat Tony Scalia be their first stop.

  42. 42
    Xenos says:

    @eric: The homestead exemptions in Florida and Texas are unlimited, IIRC. So that might work in those two states, at least for those who qualify for claiming exemptions.

  43. 43
    Villago Delenda Est says:


    change has a premature ejaculation problem.

  44. 44
    eric says:

    @Xenos: hm, go figure. ;)

  45. 45
    Steve says:


    Bankruptcy judges or even the judges in these foreclosure courts could create new equitable mortgages out of the unsecured debt on behalf of the investors (even if the mortgage is not enforceable, the debt remains, it’s just not secured by collateral, i.e. the house). The judges would have substantial discretion to alter the terms of the new mortgages. It could come to this.

    There’s an assumption I see made a lot in these comments, that even if a mortgage is unenforceable, somehow giving the lender ownership of an unsecured debt is an acceptable second-best position.

    The reason I believe this assumption is mistaken is that the distinguishing feature of a mortgage is that it is a non-recourse loan. In other words, the lender’s sole recourse is against the specific collateral: the property. If the property isn’t worth enough to pay off the loan, that’s too bad for the lender; he doesn’t get to take a money judgment (what we call a “deficiency judgment”) to be satisfied out of the general assets of the homeowner.

    (Incidentally, this is why I believe there are no moral issues whatsoever with walking away from an underwater mortgage; the lender contractually agreed that the value of the property would be his sole source of repayment. If the lender wanted to require that you repay the entire mortgage even if the value of the property went to zero, he didn’t have to offer you a non-recourse loan.)

    So anyway, the point is that in a normal mortgage situation, the mortgage lender has no right to go after any assets other than the house. So if we say “oh well, you lost the paperwork so we’ll just make you a general unsecured creditor” we’re suddenly giving that mortgage lender a right to go after non-house assets that he never would have been able to pursue otherwise. He loses the security of the house, but he’s otherwise getting a windfall in that the non-recourse feature of the mortgage has been eliminated. That doesn’t seem right.

  46. 46
    burnspbesq says:


    No you don’t. The House may vote to repeal the ACA, but in order to actually repeal it, you need a majority vote of both houses and the President’s signature. Or you need two-thirds votes in both houses to override a veto.

    Can you say “ain’t happening?”

  47. 47
    PurpleGirl says:

    @daveNYC: That’s the thing that kills me about this mess, there is a solution, it’s just not cheap, quick, or easy; and these days, the finance industry doesn’t like to play that way.

    Ding! Ding! Ding! You got it. Way easier not to hire more people.

  48. 48
    Chyron HR says:


    Watch out, libs! ObamaCare is going the way of the DADT repeal and the New START treaty! Changestradamus has spoken!

  49. 49
    jimBOB says:

    I know of a condo in West Springfield, MA that has sat empty since 1988

    Unless somebody is doing upkeep and maintenance on that condo, it probably looks like this.

  50. 50
    Walker says:


    The reason I believe this assumption is mistaken is that the distinguishing feature of a mortgage is that it is a non-recourse loan.

    This varies from state-to-state. This just illustrates one of the major problems here: there is no single solution that will work nationwide.

  51. 51
    rachel says:

    @Villago Delenda Est:And a being-a-transparent-spoof problem. If it were an actual conservative, it would be in the previous thread defending Captain Ed’s dubious honor.

  52. 52
    eric says:

    @Steve: I am not aware of any bar to deficiency judgments; that is why there is a hearing by the judge to approve the sale and why lenders are counseled to bid a certain percentage of their debt even if there are no other bidders. Most lenders know that there is going to be no recourse and do not want to spend the money going after borrowers individually. Plus, if there is a surplus to the lender’s debt at sale (not likely anymore) then that money goes to the borrower (if there are no junior creditors).

    I am not sure why there would be no deficiency.

  53. 53
    burnspbesq says:


    I’m not a BK lawyer, but what I think I remember is that debtor can choose between a relatively stingy Federal exemption and the applicable state exemption. In Florida, the state exemption is unlimited, so BK would seem to be an attractive option. I don’t know, however, whether a creditor can move to convert an individual 7 to a 13 and get something out of it that way.

  54. 54
    change says:


    This is the preliminary step.

    Next up? We bundle the next repeal with raising the debt limit. Either Hopey Changey and the liberals repeal the ObamaCare boondoggle, or we shut the whole fucking country down.

    He’ll have no choice but to repeal it!

  55. 55
    singfoom says:

    @change: Good luck with that whole repeal thing. You’re like the guy in Idiocracy: “Why do you keep trying to read that word. You a fag?”

    I like the assertion of that the bill is bad because it is long. If you have a hard time reading long things, you might want to stick to pamphlets.

    Also, “burdensome”? I’m sure that little kids with cancer who couldn’t find coverage before find that coverage burdensome, you loathsome PoS.

    Can you please go DIAF or troll somewhere else?

  56. 56
    rachel says:

    Hey, maybe one of you can tell me this: if a tenant of a property like this doesn’t have to pay on the mortgage and continues to pay all property taxes, could he later gain title by adverse possession?

  57. 57
    Villago Delenda Est says:


    One of the most infuriating things about contemporary “conservatives” is that they make the folks at the Onion work overtime trying to find new ways to be so over the top that you know it’s meant as snark.

  58. 58
    eric says:

    @burnspbesq: the “smart” thing to do would be to renegotiate the note to something attractive to the borrower so that they can actually make the payments, while the lender gets a new security interest and the borrower avoids the bankruptcy. But “smart” has nothing to do with any of this.

  59. 59
    change says:

    When it’s finally repealed it will be because we tied it to the debt limit…you’ll just have to fucking deal.

  60. 60
    Steve says:


    I am not sure why there would be no deficiency.

    Because it’s a non-recourse loan. Isn’t that what non-recourse means?

    As pointed out above, mortgages are not non-recourse in all 50 states, but that’s how it works most places so I think it’s worth focusing on how that particular situation shakes out. Say your house burns down and the insurance proceeds, for whatever reason, aren’t sufficient to pay off the balance on the mortgage: does the homeowner really have to go into his pocket for the difference? Not if it’s non-recourse, it seems to me.

  61. 61
    Chyron HR says:


    Either the Spendfidels give in to our demands, or we shut the whole fucking country down.

    Al-Chenji has revealed his true colors. Hopefully Obama won’t negotiate with terrorists the way that Reagan did.

  62. 62
    burnspbesq says:


    “The reason I believe this assumption is mistaken is that the distinguishing feature of a mortgage is that it is a non-recourse loan. In other words, the lender’s sole recourse is against the specific collateral: the property”

    That’s not true in all states, and it’s not true in all circumstances. The law varies widely from state to state.

  63. 63
    change says:

    What can TOTUS do at that point?

    Either he signs the repeal of his signature piece of legislation, or vetoes it and he becomes the first President in history to default on the US debt….

  64. 64
    Villago Delenda Est says:

    Either the Spendfidels give in to our demands, or we shut the whole fucking country down.

    So, you’re going after Bush and Cheney and their spendthrift war of aggression, are you?

    Good luck with that. You’ll be stabbed in the back by Michelle Bachmann and Sarah Palin.

  65. 65
    Ash Can says:

    @Xenos: The rush is that people are beginning to see actual benefits from ACA. With more and more people realizing benefits, fewer and fewer people will believe the Republicans when they say that Democrats are evil and must not be allowed to legislate.

  66. 66
    burnspbesq says:


    It’s kinda early in the day to be taking hallucinogens, dontcha think?

  67. 67
    BTD says:


    Where did you get this from? I’m not sure this is correct.

    There is an unjust enrichment argument that can be made but I don’t see it here.

  68. 68
    eric says:

    @Steve: i found this list on the intertubes…take it for what is worth (my state is not non-recourse)
    These are all the mortgage walkaway trustee sale states, meaning they are non-judicial foreclosure states.

    In those states, generally, when they foreclose on you, they cannot pursue you for their financial losses.

    Many, such as California, do in theory allow a lender to choose judicial foreclosure but in those cases the lenders only do so if a borrower has significant other assets. This is the “one action” rule that lets the lender either pursue non-judicial foreclosure, at lower cost and less time, or judicial foreclosure that costs more money and takes more time but lets them go after you for their financial losses.

    District of Columbia (Washington DC)
    Montana (as long as non-judicial foreclosure is used)
    Nevada – note that the lender CAN get a deficiency judgment (See below)
    New Hampshire
    Texas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)
    West Virginia

    These are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:
    North Carolina
    Rhode Island
    South Dakota

  69. 69
    ed drone says:


    Can you please go DIAF or troll somewhere else?

    DIAF? Hell, no! Third-degree burns and a long hospitalization, without Health Insurance — that’s what our troll needs. Perhaps he’ll see the light, then.

    And, no, HCR will not be repealed, whole or piecemeal, by this Republican Congress. In fact, this Congressional session will have more fireworks to less effect than just about anything short of an actual fireworks show.


  70. 70
    Xenos says:


    Next up? We bundle the next repeal with raising the debt limit. Either Hopey Changey and the liberals repeal the ObamaCare boondoggle, or we shut the whole fucking country down.
    He’ll have no choice but to repeal it!

    I hate to see a perfectly good spoof get blown like this. It is impossible that a teatard or even a movement conservative is this stupid.

    Actually, I perversely like the idea of a default at this point. Let’s put an end to the whole American experiment with one clean blow and start the reconstruction ASAP. It can’t be much worse than having the blackmail over the debt extension and the blackmail over defense spending and blackmail over Social Security go on ad infinitum.

  71. 71
    Judas Escargot says:


    Shut down the Federal government, and guess who starves to death first? The old folks who rolled their free Medicare scooters to the polls to vote GOP, that’s who.

    I say go for it, brother.

  72. 72
    BTD says:


    The homestead exemption is unlimited in Florida but you lose the 4k wildcard.

    The issue is most of these properties are worth very much anymore.

    Walking away is really looking like a good deal to a lot of people now.

  73. 73
    mclaren says:


    The problem is the chain of title is completely unclear. Without a valid and complete chain of title, there’s no way to determine who has standing to actually take the borrower to court.

  74. 74
    change says:

    @Judas Escargot:

    Not merely shutdown the government, but default on the debt.

    It will mean the end of Obambi’s Presidency if he defaults, and the end also if he repeals his own signature piece of legislation. I’m imagining the fear on his face right now…that arrogant piece of shit will finally get taken down a notch.

  75. 75
    Ash Can says:

    @rachel: Good point. “Change” is so silly and so much of an attention whore that I’m not at all convinced s/he’s sincere. I like to engage trolls when I’m in the mood because they make for good target practice, but this one’s just phoning it in. So what’s the fun of that?

  76. 76
    Gustopher says:

    I just want the lawyers who are knowingly filing false paperwork with the courts to be disbarred.

    A couple rounds of that, and I’m sure the banks will have to do a better job with this whole chain of ownership thing.

  77. 77
  78. 78
    Villago Delenda Est says:

    I recall in 1995 that “shutting the whole fucking country down” worked VERY well for Newt “If she gives me a blow job, I can honestly say I didn’t sleep with her” Gingrich.

  79. 79
    different church-lady says:

    I don’t understand why everyone has such negative reactions to Change’s love of pie.

  80. 80
    Judas Escargot says:


    Not merely shutdown the government, but default on the debt.

    Which would have one nasty little side effect: Destroying the world economy. Default on the debt, you kill the T-bills. Kill the T-bills, and the whole sucker goes down in flames.

    Your masters won’t allow that.

  81. 81

    re the non-recourse issue, it is not normally to the bank’s benefit to go from secured to unsecured.

    For most people the house is the vast majority of their tangible assets; 80% not being atypical.

    So we have creditor one, the lender, who has direct and sole access to 80% of the borrower’s assets. We’ve also got (for example) four other creditors who, if things go into the pot, can only divvy up the remaining 20%.

    Our creditor loses the security of the house, but is still owed the money. He decides to force payment, which means a forced bankruptcy. The other creditors are notified of the situation as well.

    Because of the way it happened, the other creditors get paid FIRST from 100% of the assets. If between them they were only 20% of total debt then creditor one is fine. If, however, they were owed a bit more then creditor one is going to get less. Add homestead exemptions (which vary wildly from state to state) and creditor one could turn out lucky to get ten cents on the dollar for the original loan.

    Lotsa devils in the details, of course, and the devils are different from state to state. But that is the basics of why the lender does not want to see the loan go unsecured.

  82. 82
    cleek says:

    nothing says “fiscally responsible” like “let’s default on our debts!”

    fucking frauds, every last one of them.

  83. 83
    change says:

    @Judas Escargot:

    Or the government could just balance the budget and add no new debt.

    Our “masters”? We have no masters. Watch.

    Repeal will be bundled with the debt limit along with (perhaps) means testing and raising the retirement age for Social Security and Medicare.

    And there’s nothing you can do about it!

  84. 84
    Xenos says:


    Our “masters”? We have no masters. Watch.

    Oh, you have masters, alright. Don’t bait them.

  85. 85
    Ash Can says:

    @Judas Escargot:

    Your masters won’t allow that.

    They sure won’t. But I’m looking forward to some pretty entertaining rhetoric from the butterfly-net crowd in the meantime.

  86. 86
    Villago Delenda Est says:


    The budget WAS balanced in 2000, before the deserting fratboy rammed his tax cuts for the parasite overclass through, then embarked on a couple of totally optional wars of aggression.

    No one is buying this crap but the teabagger cretins.

  87. 87
    change says:

    @Villago Delenda Est:

    Revenues increased after the Bush tax cuts, they just spent too much.

    Tax cuts historically increase revenues, they did under Reagan, they did under Bush, but the failure was in cutting spending.

    But now with the Tea Party in charge we’re finally going to do it, beginning with repealing ObamaCare as part of the debt limit.

    Buckle up, liberals, its going to be a bumpy ride…

  88. 88
    Steve says:


    I just want the lawyers who are knowingly filing false paperwork with the courts to be disbarred.

    I doubt many lawyers are knowingly filing false paperwork. Given the assembly-line nature of this stuff, the lawyers are probably not paying any more attention than the banks who butchered the paperwork in the first instance. A paralegal slaps a foreclosure complaint together, the lawyer signs on the dotted line, that’s the typical process.

    That’s why here in New York, the courts adopted a new rule a couple months ago that says in any foreclosure action, the attorney must submit his or her own affidavit swearing that he personally reviewed all the paperwork, that he communicated with the lender, and that he took reasonable steps to verify the accuracy of the paperwork.

    Do you think that rule sounds like a good idea? By all accounts it has worked spectacularly well.

  89. 89
    Villago Delenda Est says:


    If revenues went up, why did the Federal budget immediately go into deficit? This is before the deserting fratboy “war prezint” spendathon got going, mind you.

    The cretinous fucking stupid. It BURNS.

  90. 90
    mclaren says:


    the “smart” thing to do would be to renegotiate the note to something attractive to the borrower so that they can actually make the payments, while the lender gets a new security interest and the borrower avoids the bankruptcy. But “smart” has nothing to do with any of this.

    That’s not smart and it’s not an option for American banks because all American banks are currently insolvent. They’re using extend-and-pretend to try to make it appear that they’re not insolvent, but in fact they are.

    Extend-and-pretend involves doing anything and everything to avoid actually writing bad loans off. If a bank hasn’t yet written a bad loan off, even if the homeowner has stopped paying the mortgage, the loan is still technically a performing loan on the balance sheet so the bank’s balance sheet looks reasonably good.

    The problem is that America has now got many many “zombie banks” that are insolvent but limping along and using accounting games to pretend they’re not. The hope is that by using the float between the essentially zero percent money the fed loans to the banks and the 35% interest rates the banks charge on credit cards, they can eventually pay off all those bad loans. The problem is that in practice this will take decades, as it did in Japan. In the meantime, the economy stagnates because the banks daren’t make loans, they only work the float to get a guaranteed income stream.

    If banks were to agree to a cramdown, suddenly the value of the bad mortgages would be written down and huge amounts of assets on their books would evaporate (an outstanding loan counts as an asset from an accounting point of view as long as it’s not a non-performing loan). If all those assets suddenly vanished from the banks’ balance sheets, it would become clear that they’re insolvent and the federal government would have no choice but to shut them down and take them over. But this would mean, as a practical matter, that the federal government would have to shut down essentially the entire U.S. banking system.

    At that point, our financial system would be in chaos. Foreign borrowers would lose confidence in our ability to pay back our loans. Commercial loans would dry up. LIBOR rates would skyrocket. It’s basically a biblical apocalypse as far as the U.S. banking system is concerned.

    No one in government or the U.S. financial community can tolerate the prospect of that happening as a practical matter, so the banks are continuing their desperate game of extend-and-pretend with the help of the federal reserve banks and congress. This is a Catch-22 situation: America’s financial system has gotten itself all jammed up and there is no obvious way out. Homeowners can’t afford to continue paying overpriced mortgages and have no incentive do so when their home values have plummeted, and continue to drop; banks can’t agree to cramdowns and can’t write off the subprime loans as bad loans. Cities and municipalities can’t agree to adjust assessed property values down because the cites and municipalities are already drowning in a sea of red ink from dropping revenues due to the recession.

    Everyone is stuck. They can’t go forward (resolve the mess with cramdowns or loan writeoffs) and they can’t go back (home prices will never return to their bubble valuations in our lifetimes).

    And the home mortgage meltdown is only the start. Commercial real estate values got as inflated by the bubble as home prices did, and now the underwater commercial real estate loans are starting to run out of accounting games and it looks like they’re going to start defaulting. Unlike a homeowner, a commercial real estate developer has no incentive to stick with property whose loan payments no longer support its income stream. So commercial real estate developers will be much quicker to walk away from their underwater office buildings and shopping malls than homeowners are to walk from their underwater homes.

    Since the commercial real estate market is several times the size of the subprime home mortgage market, this bodes ill for the economy. If commercial real estate collapses as badly as the subprime market did, we could be in for round two of the Great Recession. Google “Elizabeth Warren warns about commercial real estate crisis,” 2010. That could shoot unemployment up over 11% or 12% in time for the November 2012 elections.

    How do Obama’s re-election prospects look with 12% unemployment? You tell me. It’s all connected — this is why it’s unwise to discount Sarah Palin’s chances of winning the White House in 2012.

  91. 91
    Ash Can says:

    with the Tea Party in charge

    Didja hear the one about the guy floating down the river on a raft, who got a hard-on and yelled to the bridgekeeper to raise the bridge for him?

  92. 92
    Catsy says:

    @Ash Can: I’ve had “change” on my pie filter for a long time, but yesterday I toggled it off and read one of his comments about the way the Republicans are holding the debt limit hostage. And the way he phrased it was so blatantly framing the Republicans as if they were terrorists–he actually used the word “hostage”, and threatened to blow up the economy or some such–that it pretty much gave away the game.

    I’ve been looking for “change” to get banned, because his constant bad faith comments are worthless and contribute nothing here other than a degradation of the signal to noise ratio. But at this point it’s obvious that it’s a spoof by someone who is really, really bored, and I don’t have the time or energy to waste on most actual conservatives, let alone fake ones.

    I really wish people would stop clogging up and/or derailing perfectly good threads with these fucking spoofs. It long ago ceased to be even remotely clever.

  93. 93
    Captain Goto says:


    Wow. Just…wow.

    Classic troll: pretends that as long as he can keep coming up with answers, it doesn’t matter if they are all untrue, irrelevant, or just plain delusional.

    Can someone pass along the link for the pastry generator?

  94. 94

    @change: I have another answer to balancing the budget.

    Raise taxes.

    Raise them to the level of, oh, say in the Reagan years.

    Here’s a fun thing to think about. The Federal government’s expenditures are roughly 10% of total GDP. State government expenditures are another ~15%.

    The stated desire is to push the fed back to 2008 spending levels plus no deficit spending. In other words, use Obama’s more honest accounting but what Bush’s administration /claimed/ the number was.

    The result would be a roughly 1% decline in total GDP just from direct spending, or ~10% federal spending.

    There are a lot of businesses at the federal trough. They’d suffer a huge cut and be forced to lay off a number of people, as would their suppliers.

    The immediate cascade effect would be at least a -2% decline in GDP and a potential decline of -5%. That’s total, by the way, not quarterly annualized.

    To put that pain in context, the total real decline from this recent bash was -2.6%.

    Add to this you want to make the US default on its debts. We make much of foreign ownership. Thing is, US ownership is the vast majority of total US debt. Foreigners only hold about 30% of our total debt. So what gets destroyed is small things like retirement funds and US bond markets and US banks and state bond projects and…

    That’s what’s being threatened by this — an event that will be worse than any we’ve seen in this nation since, maybe, the late to mid 1800s.

  95. 95
    change says:

    @Kirk Spencer:

    That’s why he’ll have to sign it, repealing ObamaCare.

  96. 96
    change says:

    @Kirk Spencer:

    That’s why he’ll have to sign it, repealing ObamaCare.

  97. 97
    ThatPirateGuy says:


    The senate: The place where your dreams go to die.

  98. 98

    @change: In 2001 revenues (nominal, not adjusted for inflation) were $3.8T. In 2002, after the Bush cuts, revenues were $3.3T. In 2003 they increased to $3.7T. In fact they weren’t higher till 2004, when they reached $3.9T.

    At the same time as revenues were cut, total spending was increased. Had the margin created under Clinton been maintained the deficit today would be much smaller than it is, even excluding the money thrown into the middle east due to the conflict there.

    Revenues did not increase after the cuts.

  99. 99
    Judas Escargot says:


    That’s why he’ll have to sign it, repealing ObamaCare.

    Which just dooms the country to bleed out slowly (due to Medicare deficits and private health care eating up what’s left of income) instead.

    So, you have only two paths to ‘victory’. Either path destroys the Republic, sooner or later.

    You’re awful smug for someone who can’t “win” in any sense that matters.

  100. 100
    Xenos says:

    @change: Do you have any idea how much money will be lost by the Walton family, the Koch brothers, the Mellons, even the Bushes and the Cheneys if there is a default? No way this game of chicken gets played.

    Of course, if the house forces a default (do they have to initiate this sort of bill?) then the war in Afghanistan will be over in a hurry…

  101. 101
    Chyron HR says:

    My Awesome Mystery Thriller Novel
    by change

    Chapter 1 – The Tea Party bragged for months that it was going to destroy America by forcing the country to default on its debt.
    Chapter 2 – The Tea Party destroyed America by forcing the country to default on its debt.
    Chapter 3 – The Tea Party was actually the culprit all along!

    The New York Times Book Review says: “7 thumbs up! Sarah Palin’s battle with Professor Snape in Nakatomi Plaza was the most epic thing ever written!”

  102. 102
    MikeJ says:


    Of course, if the house forces a default (do they have to initiate this sort of bill?) then the war in Afghanistan will be over in a hurry…

    I don’t think it will be over, it will just be different. The troops that are already there won’t be getting any more food, gas, ammo, or rides home. Of course since there won’t be a US, “home” wouldn’t mean much. Anyway, I would expect them to use what edge they have to consolidate, deny all civilians the right to bear arms, etc. No reason why they wouldn’t do the same here, come to think of it.

  103. 103
    maye says:

    @change: you do realize you sound just too campy to be authentic.

  104. 104
    LanceThruster says:

    The Golden Rule will apply.

    He who has (applies) the gold, makes the rules.

  105. 105
    daveNYC says:

    They don’t have a chain of custody on the note. Without that, they’re up the creek without a paddle, no matter how many times they refile.

    I’d have to read the uber-nerd series to be sure, but I believe that it is possible to get around a broken chain of custody. Like I said previously though, it takes time, money, and effort.

  106. 106
  107. 107
    burnspbesq says:

    @different church-lady:

    What has he ever done to deserve pie? He deserves troll-house cookies with ExLax substituted for the chocolate chips.

  108. 108
    mclaren says:

    @Kirk Spencer:

    Raising taxes on the bottom 90% of the population in the worst recession since the Great Depression would plunge the economy back into recession, probably a depression. So that’s out. Raising taxes on the rich would raise some money, but not the trillion a year you need to eliminate the deficit. Best estimates put the amount that would be raised by jacking up taxes on the rich somewhere around 300 billion.

    Here’s an alternate idea: cut our useless worthless pointless military spending, which currently totals 1.2 trillion dollars a year to fund wars we’re losing against teenage kids who are armed with bolt-action rifles.

    Everyone seems to act as though our trillion-dollar-year deficits are some kind of mystery. When you piss away 1.2 trillion dollars a year on worthless military spending to lose two wars simultaneously, those kinds of deficits are no mystery at all.

  109. 109
    Xenos says:

    @MikeJ: This is sounding like the plot to a Baen Books ‘Lost Legion’ series.

    What I had in mind is the immediate bailing of all allies with troops in Afghanistan. and the immediate flipping to the Taliban of half or more of the towns now under the control of Kabul. The loss of prestige would be fatal to the enterprise.

    Within months the last soldiers would be home, and the war would undeniably be lost due to GOP perfidy.

  110. 110

    @change: Ah.

    You are willing to destroy the nation if you cannot get your way. You’re unwilling to debate and discuss on the merits, unwilling to accept that a democracy means a majority’s decision stands. You want to play petty thug, the sort that robs banks wearing suicide vests: give me the money or I’ll blow us all up.

    I don’t think the repeal/raise ceiling combo will pass the house, much less the senate. But it’s nice to make it plain exactly what scum sit on the other side of the table.

    You are willing to destroy the nation if you cannot get your way. That doesn’t, quite, reach the definition of treason. It leaves plenty of room for other labels.

  111. 111
    mclaren says:

    @Judas Escargot:

    Which just dooms the country to bleed out slowly (due to Medicare deficits and private health care eating up what’s left of income) instead.

    This is unnecessarily apocalyptic and ignores the reality that America is slowly bleeding out from multiple sources of unsustainable spending.

    I’ve posted these before, but here’s an overview of America in seven charts:

    (continued next post to avoid the 3-link limit)

  112. 112
    Yutsano says:

    @Kirk Spencer: Oh it might just pass the House if the Republican leadership gets its way and essentially makes Paul Ryan the sole holder of the purse strings. It won’t get any farther than that, however, as there are enough Senators to block any sort of real stupidity from getting too far. I think we’ll just have to get used to lots of infighting between the two Houses of Congress. And I’ll get used to the idea of a forced vacation, as I bet not even the continuing resolution makes it out of there.

  113. 113
    burnspbesq says:

    @Kirk Spencer:

    That doesn’t, quite, reach the definition of treason.

    There’s more than one way to levy war against the United States. Think outside the box.

  114. 114
  115. 115
    mclaren says:

    Portrait of America in seven charts (last two):


    You don’t have to be a rocket scientist to look at these charts and realize America is slowly bleeding out from multiple wounds. The red ink is gushing and each one of thes charts represents an unsustainable trend. Out-of-control health care spending, out-of-control miltary spending, out-of-control tuition, out-of-control offshoring and outsourcing…America’s already bleeding out.

  116. 116
    Punchy says:

    And some of you think this guy is going to vote in favor of HCR?

    What a dick.

  117. 117

    @mclaren: I largely agree, though at the same time I’ll point out that raising taxes on the top 10% — or as per the most recent discussion the top 2% — would reduce the rate of bleeding.

    I also think making some corporate tax changes so the top 5% of US corporations pay more than a 1% net tax rate would be beneficial.

    Between the two we might even be able to cover the stupidity overseas. Yes, stopping it would also help. It wouldn’t, however, stop the deficit spending despite your argument. There are other places we’re spending more than we’re earning.

    Now I’m mostly a Keynesian, based primarily on the fact that keynesian theory has been right more often (read almost always) than hayekian when the two have conflicted. So I’m in favor of the idea that government deficit spending in bad times is all right. (I like the idea that it should be repaid in good, which tended to happen under Clinton and was stopped under Bush. but I digress.)

    The focus on the deficit at this time is like focusing on bleeding before heartbeat in CPR.

    And the idiots who want to worry about the patient’s bad breath should just step away for a bit.

  118. 118
    mclaren says:


    Treason doesn’t consist only of levying war against the United States. It also consists of giving aid and comfort to America’s enemies. Since Osama bin Laden’s stated aim is to bankrupt the United States, safe to say that voting against raising the debt ceiling fits the bill.

  119. 119
    burnspbesq says:


    Scalia may be a dick, but he did join the majority in Gonzalez v. Raich. So yes, if he chooses to be intellectually consistent (and his room-size ego probably requires that), he will vote in favor of HCR.

  120. 120
    Yutsano says:

    @Kirk Spencer: I just want to say, for the record, that this post has gone way off in a totally different direction than intended.

  121. 121
    eric shaw says:

    @Judas Escargot

    Hell no, I’m roasting and eating them long before they get that bony.

  122. 122
    stuckinred says:

    @Yutsano: The voice of reason strikes again!

  123. 123
    burnspbesq says:


    You may think so, and I may think so, but the only person whose opinion really matters is Eric Holder, and I kinda doubt he’s got the stones to go there. There is also the Speech and Debate Clause to consider.

  124. 124
    Evolutionary says:

    @Ash Can: Please don’t insult lepidopterists like that. Change is a major representative of LaLa land.

  125. 125
    agrippa says:


    make it so

    and live with the consequences as best you can

  126. 126
    burnspbesq says:


    Damn. Another successful terrorist thread-jacking. Something must be done to stop these people!

    Light the Bat-Signal!

  127. 127
    sb says:

    @Yutsano: Well, hell, as long as it’s become an open thread, allow me to go OT:;evid=1

    Nino Scailia, free to say what he wants now that he’s got a lifetime job.

    Money quote: If the current society wants to outlaw discrimination by sex, hey we have things called legislatures, and they enact things called laws. You don’t need a constitution to keep things up-to-date. All you need is a legislature and a ballot box.

  128. 128
    Yutsano says:

    @burnspbesq: Release the Dawgs? That seems to be an effective method of getting things done.

    Also: if the US breaks up I’m starting the petition drive for Washington to join Canada. Five million people, a highly educated workforce, large productive diverse agricultural areas, and we’re halfway Communist as it is. I think we could sell it.

  129. 129
    agrippa says:


    what you “want” to happen — will not happen.

    and you know it

  130. 130
    jpe says:

    What Joe Buck said. The banks can still foreclose, they may just have to re-bring suit. As Tanta @ Calculated Risk noted a while back, the effect of the paperwork snafus is just to make foreclosure more expensive; it’s not going to start raining free houses.

  131. 131
    Poopyman says:

    OK, so before you all happily follow change off-topic, let me ask this:

    What would happen if a homeowner attempted to pay off the mortgage early and the lending bank couldn’t produce the note?

    Hasn’t happened yet, since we haven’t made the attempt, but I don’t know whether to hope that it does or that it doesn’t.

  132. 132
    Yutsano says:


    What would happen if a homeowner attempted to pay off the mortgage early and the lending bank couldn’t produce the note?

    Heads asplode?

  133. 133
    Ash Can says:

    @Evolutionary: Duly chastened. :)

  134. 134
    mclaren says:

    @Kirk Spencer:

    Yes, you’re right that we need to drastically raise taxes on the rich, and we also need to reform the corporate tax structure. But we need to change the rules for corporate taxation as well as simply reforming the rate structure. Corporations that persist in offshoring American jobs need to face a penalty for that — if they want to ship all their jobs out of America, then the corporation shouldn’t continue to get the advantages of being a U.S. corporation. After all, if essentially all their operations are overseas, they are a de facto foreign corporation and should be treated as such. I.e., forced to pay a much higher tax rate, lose the various advantages of being headquartered in America such as low American tax rates for the CEO and board of directors, and so on.

    So let’s tell IBM if they want to ship all our fucking tech jobs to China, great — they get to be treated as a Chinese corporation. See how they like that.

    The issue with military spending is that even if we shut down all our overseas wars, there’s no evidence that overall military spending would decline. So we need to get military spending under control at a basic level, not just end our wars.

    As far as Friedrich Hayek was concerned, the man was a loon. He claimed “A depression is like a good cold shower.” He thought depressions actually helped the economy, he claimed they were a necessary part of the business cycle. That’s insane. Depressions destroy countries if prolonged, they derange the political system and tear it apart. Look at what happened in Germany and Italy as a result of the Great Depression. All Hayek’s prediction turned out to be 100% bullshit: Hayek predicted the more socialist a country became, the more it would tend toward fascism. Well, look around — Norway and Sweden are the most socialist countries in Europe. Are they torturing people and kidnapping their own citizens and throwing ’em into dungeons without a trial? No, they’re not. Which first-world country is currently kidnapping and torturing and murdering its own citizens without a trial and without even accusing ’em of a crime? America, the most free market economy among all the developed countries.

    The reality turns out to be the exact opposite of what Friedrich Hayek predicted, so he can’t be taken seriously.

    As far as Keynes is concerned, focusing on deficits right now, when our economy has slumped back into recession, is absolutely insane. Keynes’ 1936 General Theory explained mathematically once and for all why reducing your deficit when your economy is in the crapper is the worst thing you can possibly do. That was Herbert Hoover’s big mistake from 1930 to 1932, and it crushed the economy. That was FDR’s mistake in 1937 too — he tried to reduce the deficits when the country hadn’t yet emerged from the Great Depression, and it plunged America right back into massive unemployment and absolutely wiped out aggregate demand.

    Trying to reduce the deficit at this point in the economic cycle is sheer suicide. It’s economically insane. It throws out 75 years of accumulated financial knowledge. When the economy is suffering from a huge recession, you need to run large deficits, then pay them down when aggregate demand rises and the economy recovers. This has been well established basic economic practice for three quarters of a century. Trying to reduce deficits when the economy hasn’t yet emerged from a massive recession actually increases deficits, because cutting government spending reduces employment and drives down aggregate demand to the point where tax revenues decline even more than spending does. Keynes knew this in 1936. FDR and the congress grasped this basic reality by the late 1930s. But somehow, for some bizarre reason, we’re now forgetting this basic reality today.

  135. 135
    Xenos says:

    @Poopyman: As long as the mortgagee of record provided a valid and effective discharge, who cares about the note? If they wanted to collect on the note at some later time they would have to produce… the note. If the bank conveyed the note to someone else, and that party never recorded a mortgage assignment, and let the debtor pay off the note in accordance to the public record of who owned the mortgage and note, I am pretty sure there would be no way to collect on that note. The original bank may owe them some money, but the debtor and the debtor’s title are pretty damn safe.

    The states all have statutes that sort this sort of problem out. It is never, as far as I have ever heard, an issue.

  136. 136

    @Yutsano: True.

    And this is different from any other BJ thread how, exactly?

  137. 137
    burnspbesq says:


    I dunno. Any country that can end up making Mark Steyn the poster-boy for freedom of speech has a few problems.

  138. 138
    burnspbesq says:

    I disagree with the conclusion, but this is a very thoughtful take on the issues around prosecuting Assange.

  139. 139
    Yutsano says:

    @Kirk Spencer: Since me and wifey are masters at thread hijacking, I was just making an observation more than anything. :) It’s also funny to watch it happen during the day and especially letting a troll do it. I was awaiting the inevitable thread on this topic.

    @burnspbesq: Every country has its quirks and indecencies. They haven’t apologized for David Frum yet either.

  140. 140
    Judas Escargot says:


    And I’d like to say, on the record, that the housing crisis and the US debt ceiling issue are perhaps more closely related that you assume.

  141. 141
    Captain Goto says:

    @cleek: Thank you.

  142. 142
    Yutsano says:

    @Judas Escargot: All well and good. I’d just not reward a troll with a successful diversion from the main topic. It’s a principle of mine.

  143. 143
    mclaren says:


    As a practical matter, all this apocalyptic talk of “America breaking up” and “the U.S. army having no food or fuel” if (by some bizarre and wildly unlikely event, which is ridiculously unlikely) the nutjobs in the Tea Party succeed in logjamming congress to the point where we temporarily fail to raise the debt ceiling is pretty silly stuff.

    As a matter of practical reality, a temporary failure to raise the debt ceiling would mean the U.S. government would issue some alternate form of debt instrument, probably with negotiated higher interest rates, for a short time. Unless creditors actually believed that America would permanently repudiate our debt obligations, any creditor would stupid not to take that deal. “Here’s an extra percent interest on this short-term note to cover our debt service until the congressional logjam gets resolved in a few months.” Seriously, any creditor is going to look at that deal and jump at it.

    The big issue here isn’t any outlandish fear that America will repudite its outstanding debts forever. That’s patently ridiculous. There would be no upside to doing that, since America has enormous amounts of foreign trade and vast investments overseas, and all of those would be ruined…and there would be a vast downside in repudiating all our debts permanently.

    No, the real issue with this debt ceiling thing is that it takes valuable mindspace and time away from dealing with our real problems. Which involve fixing a bunch of broken systemic and institutional problems in this country. Our higher eduction system is broken because the tuition is wildly out of control and we’ve now set up an insane indentured servitude system that keeps students in debt forever, even if they get to age 65 — their social security payments can be garnished to pay back their colleg debt! This is destroying the value of getting a college degree, and that’s lethal to developing the kind of educated workforce America neds to compete economically.

    Our offshoring of all the high-skill high-paying jobs is hollowing out our tax base and destroying America’s ability to pay for its basic infrastructure.

    Our crazy military overspending is turning America into a martial-law garrison camp, plus military contracting creates many fewer jobs per dollar than investment in non-military manufacturing and services. Plus, it’s bankrupting us.

    Our broken health system is bankrupting us, plus it’s making U.S. businesses non-competitive around the world because so much of our businesses’ revenues get sucked up into a wasteful health care system that produces worse outcomes than other countries’ nationalized health care systems.

    Our lack of a basic social safety net badly damages American competitiveness and productivity. Plus, it’s also bankrupting us, since a disproportionate number of the people who use hospital ERs are poor people who slipped through the safety net, but this raises costs on everyone else and overburdens the hospitals and the ERs.

    Our failure to address Peak Oil and global warming are already damaging our economy and will continue to do so at an exponentially worsening rate as time goes on until we start to deal with those problems instead of ignoring them.

    And the gradual dissolution of the constitution and the erasure of basic civil rights are turning America into the kind of country where the essential rule of law no longer applies, and this has vast consequences — robo-signing is one of them. When the president of the United States gets away with ordering people tortured and murdered without a trial or charges, the little guys in the banks figure, hey! The law doesn’t apply anymore, so what the hell, let’s just robo-sign all this shit, what’s the difference? The fish rots from the head down, in other words. Pretty soon everyone starts acting as though the rule of law doesn’t exist. And then you get Argentina in the 1980s, with people getting “disappeared,” prisoners without names in cells without numbers, and who wants to do business in a country like that? Who wants to live in a country like that? When the rule of law goes away, why would you want to buy T bills from a country like that? There are a lot of very bad consequences to the disappearance of the rule of law.

    So the point is that America has got a large number of problems to deal with. And we have got to get our asses in gear. These problems will not wait. The real significance of the goddamn debt ceiling bullshit is not that it will somehow "destroy America" or cause us to break up as a country (that's silly talk), but that it absorbs crucial mindshare that we absolutely vitally need to deal with the real problems we're facing right now. The longer we dick around with this debt ceiling vote bullshit, the longer we delay before we can get around to dealing with global warming and peak oil and all the rest of the serious issues that face us.

  144. 144
    agrippa says:

    mclaren has got it right in his post

  145. 145
    Catsy says:

    @burnspbesq: I agree that this is a very thoughtful take on prosecuting Assange, but it suffers from the same flaw that all similar treatments have: it begs the question that we can prosecute him. Not that we can prosecute him successfully, but that we have any legal grounds to do so at all.

    Assange is not a US citizen. He is not subject to our laws. He did not hack or otherwise circumvent any US computer system, he was not on American soil, he did not attack any US personnel or property, and he was not a government employee who was under any legal obligation whatsoever to protect the confidentiality of any information to which the US has assigned an arbitrary classification that only has meaning or force under US law.

    Whether what Assange did was right or wrong is beside the point. It wasn’t a crime, and we have no standing to prosecute someone for pissing us off and embarassing us.

    The only person in this entire sequence of events who committed an actual crime is Private Bradley Manning, who should and likely will spend a very long time incarcerated as a result.

  146. 146

    @mclaren: I agree with all but one statement:

    the U.S. government would issue some alternate form of debt instrument, probably with negotiated higher interest rates, for a short time.


    There are some short-term acts that can be done. They basically fall into two categories: temporary furloughs, and debt workout agreements. In the former, government offices that are spending the money get stopped for a while. In the latter, people owed money agree to go without for a period of time. Some of the latter will agree for a price — continued increase of interest payment or a penalty fee being examples.

    Provided the freeze is short enough you are right that most will grant the delay. “Short enough” is, however, different depending on creditor. There’s also a bit of peer pressure in that creditors don’t like to be first to call in their notes. Somewhat in call-back to the origin of this thread, once you call the note you force everyone else to call as it becomes impossible for everyone to get all they’re owed. While you wait it is possible the debtor will pay everything, eventually.

    The most likely culprits for “first call” are those who are desperate for money themselves, followed by those who have at least some interest in seeing the debtor fall than in long-term gain. So between the EU and the Tea Party, we have plenty of folk willing to force it.

  147. 147
    burnspbesq says:


    He is not subject to our laws.

    Actually, he is. Whether we can get our hands on him, through extradition or otherwise, is a separate question.

    The essence of the crime of conspiracy is the agreement. If Manning and Assange entered into an agreement that Assange would cause Wikileaks to publish anything that Manning could steal, that’s the prima facie case right there, because Manning has admitted an overt act in furtherance of the conspiracy (the theft). Nothing in the statute or the case law requires that the conspirators be within the United States when they enter into the agreement (If you think we can’t prosecute Assange for conspiracy, then you must also think we can’t prosecute Khalid Sheikh Muhammad for conspiracy, and nobody I know who understands the law of conspiracy thinks that).

    Similarly, it is possible to aid and abet the theft of government property without ever setting foot in the United States. Suppose, hypothetically, that the documents Manning wanted to steal were encrypted in some newfangled way that Manning couldn’t break on his own. If Assange sends him a CD or a USB drive with the software he needs to get the stuff, that’s aiding and abetting, and it doesn’t matter whether Assange dropped off the envelope at the FedEx office in Paris, Texas or Paris, France.

  148. 148
    burnspbesq says:


    If your view of territorial jurisdiction was correct, it would logically follow that Manning couldn’t be prosecuted for stealing the stuff if he had stolen it while seconded to the British GCHQ. Is that your view?

  149. 149
    sunsin says:


    Either Hopey Changey and the liberals repeal the ObamaCare boondoggle, or we shut the whole fucking country down.

    Since there is no legal way to force anything through when you only control one-half of the legislative branch, I would say this amounts to a determination to commit sedition. Never mind. It’s been tried before. Remember how that turned out?

    All Obama has to do if the Thugs try “shutting down the government” is to go on TV, show a picture of a spoiled child having a tantrum and say, “Let me introduce you to the Republican party.”

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    FuzzyWuzzy says:

    @Patrick: Actually it seems they can in Florida and possibly other states.

  151. 151
    Jebediah says:

    Who’s “we?” You and the other hydrocephalics?

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