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The Difference Between Wealth and Profit










By Marilyn M. Barnewall
January 5, 2012

There is something in the woodpile that doesn’t smell right. Election years make for smelly woodpiles, have you noticed?

One of the people I’ve held in high regard is New York Attorney General Eric Schneiderman. He is a Democrat and his political ideologies are the opposite of mine, but his investigations into Wall Street and unlawful foreclosures have endeared him to anyone seeking an end to the fraud being perpetrated on homeowners (along with investors) by Wall Street banksters.

Schneiderman, however, seems to be part of the woodpile that doesn’t smell right. Perhaps it’s because I resent people who do what’s expected of them – things listed in their job descriptions – and then use those achievements for political gain. Most people do their jobs without having to pridefully beat their chests in public. Yet, that seems to be what’s happening. It’s not Schneiderman beating his own chest; Obama’s doing it for him… using Schneiderman’s accomplishments for Obama’s advantage.

The Obama campaign speech – I mean State of the Union Address (SOTU) – made mention of the fact that the President plans to create a special unit to investigate misconduct and illegalities at the heart of America’s near financial collapse and the mortgage crisis that is largely responsible for it.

One news story that came out this week said Schneiderman, a severe critic of a proposed settlement between 50 state attorneys general and the five biggest too big to jail banks, would head Obama’s new special unit. They’re both Democrats, so what’s unusual about that? What’s unusual is that up until two days before the SOTU address, President Obama was encouraging the 50 state attorneys general to sign the proposed settlement. Reports suggest that the five biggest offenders of homeowners’ rights will settle with all 50 states for the sum of $25 billion although the five probably made four or five times that amount in profits.

The downside: Residents damaged by the banks would be unable to file for damages in states that sign the settlement. A good deal for the State Treasurer; a bad deal for citizens. The five banks offering the settlements probably made four or five times the $25 billion settlement. That’s the deal President Obama was encouraging states’ attorneys general to sign… until a day or two before his SOTU address.

Then Attorney General Schneiderman’s office sent out a statement saying:

“I would like to thank President Obama for his leadership in the creation of a coordinated investigation that marshals state and federal resources to bring justice for the victims of the misconduct that caused the mortgage crisis.

“In coordination with our federal partners, our office will continue its steadfast commitment to holding those responsible for the economic crisis accountable, providing meaningful relief for homeowners commensurate with the scale of the misconduct, and getting our economy moving again.

“The American people deserve a robust and comprehensive investigation into the global financial meltdown to ensure nothing like it ever happens again, and today's announcement is a major step in the right direction.”

Suddenly, Obama (who can use Schneiderman’s accomplishments in combating unlawful foreclosures to make himself look good politically next November ) changed his mind and decided to side with Schneiderman. You don’t suppose getting the New York Attorney General to accept the appointment to head the special unit to investigate misconduct and illegalities involving foreclosures had anything to do with it, do you?

What’s that I smell? It isn’t burning wood.

Then, late last week another announcement was made. Schneiderman filed suit against Bank of America, J.P. Morgan Chase and Wells Fargo because they created and used a private national mortgage electronic registry system called MERS. He said the three banks acted as “MERS certifying officers.” So did 20,000 others, Mr. Schneiderman. As I noted in my article 18 months ago, just about anyone could become a “certifying officer” for MERS. Are you going to file against them?

You can read my article series, Mortgage Mayhem and MERS, Hot Tubs and the FBI written 18 months ago. Go here. Welcome to the world of MERS and other mortgage fraud Mr. Schneiderman. What took you so long?

In a statement about the suit filed against three of the banks involved with the creation and use of MERS, Schneiderman said “The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages.” Schneiderman is absolutely right, but I wonder why he left other names of the creators of MERS out – names like Freddie Mac and Fannie Mae? Will he be going after them, too?


Schneiderman’s lawsuit alleges the five banks used MERS so they wouldn’t have to pay for recording the purchases and sales of mortgages. They used MERS to initiate foreclosure proceedings based on inaccurate data. My article said the same thing 18 months ago, Mr. Schneiderman. I repeat: Where have you been? Dallas, TX has already filed suit against the banks for the return of the recording fees. Has New York?

The remainder of Schneiderman’s press release regarding the three banks sounds like Obama when he talks about redistribution of wealth and the need for everyone to play on a level playing field. “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”

Define “justice,” Mr. Schneiderman Does it include the other creators of MERS’ – individuals, banks, mortgage companies and federal enterprises? Does it include the robo-signing paper mills where clerks who don’t earn nearly what Warren Buffet’s secretary does, who sat and knowingly forged (for banks requesting them) documents to be used to unlawfully foreclose on people’s homes?

If I were an auctioneer and was at work, I might be tempted to shout “Sold!” I hate to see someone with Schneiderman’s potential end up part of the federal housing policy woodpile which, indeed, smells. All of America, not just New York, needs Schneiderman’s legal expertise and willingness to stand against fraud on Wall Street. Instead, it appears Barack Obama may now control Schneiderman who, it seems, can’t resist taking a step up the political ladder.

There’s much We the People need to know about this foreclosure mess, the proposed agreements to states’ attorneys general, and why the agreements should be rejected. Schneiderman is right about that… and legal precedent is going in that direction.

Last October, for example, the Massachusetts Supreme Court issued a ruling that will make it even harder for lenders in that state to sell properties for market value. The Court has potentially rejected the legality of foreclosures that have occurred in Massachusetts for the past five years. The average person doesn’t understand this, either, and that’s what has made it possible for such highway robbery to occur. Would I buy a home out of foreclosure? Not without seeing the property’s Title and ascertaining that it is saleable and assignable – in other words, quiet.

Massachusetts Attorney General Martha Coakley called the court’s ruling “yet another clear demonstration that the only way we are going to restore a healthy economy is to address the foreclosure crisis and hold the banks accountable for their actions.” Coakley has refused to sign the agreements Schneiderman also opposes – the same agreements the president said he wanted all states’ attorneys general to sign until just before his SOTU address. The stink of the woodpile… can you smell it?

The Massachusetts Supreme Court’s decision supported an earlier one made in a case that stripped banks of foreclosure rights if they don’t hold the mortgage at the time they file for foreclosure.

You may wonder why this should interest you. Well, unless your mortgage is completely paid (and even then you aren’t totally safe), you could end up in foreclosure court asking “what happened?” Or, you may find it impossible to get clear Title to your property after you’ve spent 20 or 30 long years paying your mortgage. Why?

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This article wasn’t written to entertain – banking isn’t an amusing subject. But you need to know that what’s going on can affect you, no matter how current your house payments are, no matter that you’re not worried about losing your job or not being able to pay your bills, including the mortgage. Thanks to Congressional ignorance about how the economic and banking systems in America work, thanks to legislators’ willingness to cancel laws protecting us since the Great Depression, every home owner is at risk until this mess is cleaned up.

The only way to straighten things out is for the people to understand the risk. Until you do, “they” will do nothing about it. They will pass legislation like Dodd-Frank, which places such an onus on independent banks it is causing them to fail while telling you they are working to solve the problems they are actually making worse. I understand that banking isn’t particularly enjoyable for non-bankers to read about… but do you understand that it is public lack of knowledge about the subject that made this rape of our property possible in the first place? For part two click below.

Click here for part -----> 2,

� 2012 Marilyn M. Barnewall - All Rights Reserved

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Marilyn MacGruder Barnewall began her career in 1956 as a journalist with the Wyoming Eagle in Cheyenne. During her 20 years (plus) as a banker and bank consultant, she wrote extensively for The American Banker, Bank Marketing Magazine, Trust Marketing Magazine, was U.S. Consulting Editor for Private Banker International (London/Dublin), and other major banking industry publications. She has written seven non-fiction books about banking and taught private banking at Colorado University for the American Bankers Association. She has authored seven banking books, one dog book, and two works of fiction (about banking, of course). She has served on numerous Boards in her community.

Barnewall is the former editor of The National Peace Officer Magazine and as a journalist has written guest editorials for the Denver Post, Rocky Mountain News and Newsweek, among others. On the Internet, she has written for News With Views, World Net Daily, Canada Free Press, Christian Business Daily, Business Reform, and others. She has been quoted in Time, Forbes, Wall Street Journal and other national and international publications. She can be found in Who's Who in America, Who's Who of American Women, Who's Who in Finance and Business, and Who's Who in the World.

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The remainder of Schneiderman’s press release regarding the three banks sounds like Obama when he talks about redistribution of wealth and the need for everyone to play on a level playing field.