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Eleven Commandments

Giz, why it is difficult to see the difference in what banks did in securitizing the 1st lien loans and the 2nd lien loans. The 2nd may have placed on the banks balance sheet, if so, usually 20% of total value or less of the total of 1st and 2nd? First, the 2nd loans Security Instrument is perfected of public record in the banks name and lacked intervening ownership, therefore the 2nd loans have a note secured by a perfected security instrument of record whereas the bank is the secured party and would be acceptable collateral for the Federal Reserve to receive liquidity support. Second, the banks could have not sold these but instead pledged the payment stream as collateral where the payment stream is the actual collateral while the loan themselves remain in the banks name, therefore, an audit of the bank balance sheet would show potential balance. Additionally, in this economy with lack of payment on the 1sr which is tied to the 2nd, liquidity would be an issue. Third, where the banks may have directed or been involved the underwriters of the 1st being sold into securities, which involved intervening ownership changing, the 1st’s would not have ever appeared on the banks balance sheet. Fourth, assuming 50% of loans involve a 2nd lien and as the housing finance market is approximate value of 12 Trillion, the risk to the bank on the 2nd could be extrapolated to be less than 2.4 Trillion less the value of future collectable or write off, which shall be approximated at 75% would be mean banks direct exposure on the 2nd’s would be approximately 600 Billion. Fifth, whereas, if it determine by the courts the 1st were not in lawful compliance, the bank owned 2nd’s would be able to move into first position, if they so choose, and then the banks foreclosing on a 20% value would doubtfully experience any loss. Actually in the long run, may see a profit. Sixth, to be a part of both the 1st and 2nd process, there is no way in heaven I would believe creating the process for 1st and 2nd was by accidental design. Seventh, the bank’s primary legal front is not to be held accountable or liable for the underwriting failure or as trustee, the home owner’s legal issues with the banks is actually secondary to the investors. Eighth, the banks care not from who they make their profit, the investor, homeowner or bailouts from the governments of the world. Ninth, the housing fiasco maybe limited to America, but the investors come from all regions of the world. Tenth, until it is known for fact there is no swinging door between the banks, governments and central banks, distrust will abound. Eleventh, if not lawfully judged on Earth, then let God judge them to hell.