Friday, January 20, 2012

Florida Evidence Code requires ORIGINAL negotiabler instrument


Guess What, Florida foreclosure defense fans? 


The Florida evidence code prohibits admission of a COPY of the MORTGAGE NOTE into evidence.



90.952 Requirement of originals.—Except as otherwise provided by statute, an original writing, recording, or photograph is required in order to prove the contents of the writing, recording, or photograph.

History.—s. 1, ch. 76-237; s. 1, ch. 77-77; s. 1, ch. 77-174; s. 22, ch. 78-361; s. 1, ch. 78-379.

90.953 Admissibility of duplicates.—A duplicate is admissible to the same extent as an original, unless:

(1) The document or writing is a negotiable instrument as defined in s. 673.1041, a security as defined in s. 678.1021, or any other writing that evidences a right to the payment of money, is not itself a security agreement or lease, and is of a type that is transferred by delivery in the ordinary course of business with any necessary endorsement or assignment.

(2) A genuine question is raised about the authenticity of the original or any other document or writing.

(3) It is unfair, under the circumstance, to admit the duplicate in lieu of the original.

History.—s. 1, ch. 76-237; s. 1, ch. 77-77; s. 22, ch. 78-361; s. 1, ch. 78-379; s. 57, ch. 92-82; s. 29, ch. 99-2.


Compare this to the corresponding Federal Rules of Evidence:



An original writing, recording, or photograph is required in order to prove its content unless these rules or a federal statute provides otherwise.



A duplicate is admissible to the same extent as the original unless a genuine question is raised about the original's authenticity or the circumstances make it unfair to admit the duplicate.


This difference appears to give Florida Foreclosure defenders an opportunity to denounce a copy of a note as admissible, even though the borrower made a stream of payments on a note the borrower THOUGHT existed (but which did not in fact exist).



However, in Florida, the Court may reestablish an original under certain circumstances:


71.011 Reestablishment of papers, records, and files.—All papers, written or printed, of any kind whatsoever, and the records and files of any official, court or public office, may be reestablished in the manner hereinafter provided.

(1) WHO MAY reestablish.—Any person interested in the paper, file or record to be reestablished may reestablish it.

(2) VENUE.—If reestablishment is sought of a record or file, venue is in the county where the record or file existed before its loss or destruction. If it is a private paper, venue is in the county where any person affected thereby lives or if such persons are nonresidents of the state, then in any county in which the person seeking the reestablishment desires.

(3) REMEDY CONCURRENT.—Nothing herein shall prevent the reestablishment of lost papers, records and files at common law or in equity in the usual manner.

(4) EFFECT.—

(a) Any paper, record or file reestablished has the effect of the original. A private paper has such effect immediately on recording the judgment reestablishing it, but a reestablished record does not have that effect until recorded and a reestablished paper or file of any official, court or public officer does not have that effect until a certified copy is filed with the official or in the court or public office where the original belonged. A certified copy of any reestablished paper, the original of which is required or authorized by law to be recorded, may be recorded.

(b) When any deed forming a link in a chain of title to land in this state has been placed on the proper record without having been acknowledged or proven for record and has thereafter been lost or destroyed, certified copies of the record of the deed as so recorded may be received as evidence toreestablish the deed if the deed has been so recorded for 20 years.

(5) COMPLAINT.—A person desiring to establish any paper, record or file, except when otherwise provided, shall file a complaint in chancery setting forth that the paper, record or file has been lost or destroyed and is not in the custody or control of the petitioner, the time and manner of loss or destruction, that a copy attached is a substantial copy of that lost or destroyed, that the persons named in the complaint are the only persons known to plaintiff who are interested for or against suchreestablishment.

History.—s. 5, Nov. 21, 1829; s. 12, ch. 1369, 1862; s. 2, ch. 3019, 1877; RS 1523-1527, 1533; s. 1, ch. 5162, 1903; GS 1978-1982, 1997; RGS 3246-3250, 3265; CGL 5054-5058, 5073; s. 7, ch. 22858, 1945; s. 24, ch. 67-254.

Note.—Former ss. 71.01-71.06.



Foreclosure defenders sometimes get hoodwinked by plaintiffs with this effort to enforce a lost note:


673.3091 Enforcement of lost, destroyed, or stolen instrument.

(1) A person not in possession of an instrument is entitled to enforce the instrument if:

(a) The person seeking to enforce the instrument was entitled to enforce the instrument when loss of possession occurred, or has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred;

(b) The loss of possession was not the result of a transfer by the person or a lawful seizure; and

(c) The person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

(2) A person seeking enforcement of an instrument under subsection (1) must prove the terms of the instrument and the person's right to enforce the instrument. If that proof is made, s. 673.3081applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

History.s. 2, ch. 92-82; s. 1, ch. 2004-3.



Ask yourself whether you, as judge, would enforce a non-existent note that you could not lawfully admit into evidence.






Bob Hurt

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Sunday, January 15, 2012

ACT NOW IF YOU WANT TO DEFEAT U.S. Senate Bill # S.968 "Internet Takeover" Act

Do you think the government won’t take over the internet??  Congresspersons have NOTHING TO FEAR FROM YOU.  You can allow them to get away with murder   You will get what you allow.  Act NOW to defeat this bill.



U.S. Senate Bill # S.968 -

Protect Intellectual Property Act of 2011 -

“Internet Takeover” Bill



Read the Act:



This bill purports to block access to internet web sites that infringe on intellectual property rights, and make it easier for copyright owners to sue infringers.  That could include people who give or sell access to users, or users who access, copyrighted items –  any unpermitted distribution or use of photos, articles, web pages, letters, messages, movies, books, articles, compilations, designs, ANYTHING ANYONE creates, writes, composes, draws, or produces.  Examples include your favorite download sites and content.  As a result of this, prices for intellectual property will skyrocket.  While this might allow starving artists to get by a  little better, it will enrich media moguls and artists with big marketing machines behind them.  If you aren’t a Communist, you won’t mind this at all.  But if you believe in some balance to Capitalism, you won’t like it.


And of course, this will have zero effect on international pirates.  They will get away with distributing unlicensed copyright material, but the US Government will stop you from accessing it. 


While this might seem good, consider the other side:  the US Government has already used bogus, oppressive laws to shut down anti-IRS and other anti-government web sites.  As always, it will expand this anti infringement law to abuse the innocent truth-seeker and purveyor of truth.


Bottom line, we already have sufficiently powerful copyright infringement laws.  Anybody can sue, and government can arrest, a copyright infringer, including those who pirate software and music.  And Government makes a monumental number of arrests and already captures and destroys millions upon millions of dollars’ worth of pirated products, from Luis Viton bags to Fifty-Cent music CDs to Microsoft Office and Windows.  So what need have we of stronger laws?


None, in my opinion.  Since government can already shut down web sites under false pretexts, why does it need a more pervasive law?  Answer:  It doesn’t.


I want you to stop and look at this issue from the analog view point.  You buy a sandwich made from an unlicensed copyrighted recipe.  A government agent snatches it out of your hand just as you start to take a bite of it.  Same difference.


This act will force internet pirates to go deeper underground.  Users will start using TOR and ONION to hide their IP address from which they access pirate sites.  Users will switch to ever more devious Peer-to-Peer (P2P) sharing mechanisms like the original Napster that has now become commercial and “legal” – just another internet merchant for copyrighted content.


Even worse, I believe the Government will use the act to justify further political oppression.  Remember the 60 Minutes report about “Sovereign Citizens” a few months back in which it falsely accused  Jerry and Joe Kane of murder and showed concocted video?  THAT political oppression portrayed legitimate patriots as violent enemies of America, causing the ignorant general public to distrust all patriots.  I believe the Government will use this Act wrongly to further punish and demean political dissenters.


Even worse, this Act will give Government the authority to invade privacy via internet in an effort to ensnare copyright infringers.  That could mean it could plant bugs in YOUR computer via viruses, and report on all your upload/download activities.


So, DON’T write to your senators and tell them to defeat this onerous bill, AT YOUR OWN PERIL.


Anyway, a recent blurb Chris Summers sent me says this:


“The final U. S. Senate vote on the internet takeover bill is set for January 24th.  As of right now, that bill, which gives U. S. Attorney General Eric Holder the power of an "Internet Czar,” WILL PASS. Please send faxes to every Member of the U.S. Senate, and demand that they filibuster S. 968, the Senate version of the internet takeover bill.


“Unfortunately, the American people are not paying attention to this catastrophe that is unfolding in the U. S. Senate.  We only have a few days to stop this unconstitutional power grab.  We must bombard the Senate with faxes, RIGHT NOW!


“This bill will give corrupt U.S. Attorney General Eric Holder the power to blacklist or shut down any website or forum that is merely accused of being linked to "online piracy”.


“He will even have the authority to "sanitize” the results of internet searches on Google or Yahoo, so that only government-approved websites and information can be found online.


“If this bill passes, Barack Hussein Obama will have to the ability to ban the campaign websites of his opponents, shut down the online activities of anti-Obama groups like USJF, and harass tea party forums and any other websites that don't support him.


“Please fax the U. S. Senate now.  This bill WILL PASS unless the American people overwhelm the Senate with faxes!


“And, while you are at it, please forward this email to everyone ... The FINAL U. S. Senate vote is scheduled for January 24th.  We don't have much time!


“If this bill passes, the Obama Administration won't need a court order.  There will be no hearings or trials.


“Barack Hussein Obama, Jr., will seize incredible control over the internet, and we will be nearly powerless to stop him.


“Although supporters of the bill say that it is designed to prevent online piracy, this is an internet takeover bill, pure and simple. Just one "complaint” from a liberal activist, or a government agent, that you are indirectly violating an obscure copyright rule, and your website could be fined huge sums, and it could be blacklisted from the internet.


“Just imagine if Google was prohibited from displaying websites that were critical of Barack Obama, that discussed the controversy over where he was born, or that mentioned the damage that his policies are doing to the economy.


“Well, that is exactly what will ultimately happen if S.968 passes, and it is signed into law.


“Many of this bill's provisions are modeled on Communist China's censorship law, called the "Great Firewall of China.”  Even the socialists in the European Parliament oppose this new American law. That is how extreme S.968 is!


“S.968 already has 40 co-sponsors in the U.S. Senate.   Eleven more votes and it passes!


“Please fax every U. S. Senator NOW.


“Extreme liberals like Chuck Schumer and Al Franken have teamed up with Republicans like John McCain and Lindsey Graham to ram this bill into law.


“They are being helped by millions of dollars in campaign contributions from  left-wing mainstream media companies.


“They want the government to shut down all the blogs and political forums, and all of the independent news sites, so that they, once again, will have a monopoly on the news that you and I are allowed to see.


“This threat against free speech is so grave and so imminent that websites like Google and Yahoo are seriously considering staging a last-ditch online protest to try to stop Mr. Obama and his Congressional allies!


“Please, fax every Member of the U. S. Senate NOW, and please forward this email to all of your friends, urging them to do the same.


“This bill WILL PASS unless you take action TODAY. And, while you are at it, please add to the effectiveness of your faxes by personally calling your U.S. Senators' offices at 202-224-3121.  Tell him, or her, to STOP S. 968, the internet takeover bill (not that they give a hoot as they already are committing treason )


“The final vote is January 24th.  We only have days remaining to save free speech on the internet!



Gary G. Kreep, Esq.

Executive Director

United States Justice Foundation







Bob Hurt

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Saturday, January 14, 2012

Supertonic for the Winter Seasons

A Supertonic for the Winter Seasons

By Bob Hurt 14 January 2012



Yesterday I made a jug of supertonic mash and set it aside to cure for a few days.  I thought I’d write and explain it for you.  You might find it useful.


I found out about the supertonic from reading herbalist Dr. John Christopher’s work, and first tried it out about 10 or 15 years ago at my friend Ron Radstrom’s workshop at Southern Botanicals, 611d South Myrtle, Clearwater, Florida.


Supertonic tastes good, and it’s good for you.  It contains vegetables and vinegar.  It can keep you healthy by boosting your immune function and alkalizing your body.


I make it myself at home in my Vitamix blender, then use the supertonic and remaining pulp till gone, then I make another batch.


1.        Equipment

a.       Cutting board

b.      Sharp knife

c.       Rubbery spatula

d.      Quart or half-gallon glass jar.  I sometimes use plastic.

e.      Pint Jar

f.        Pint bottle (okay to use left over vinegar bottle)

g.       2-ounce bottle with eye dropper

h.      Fine mesh nylon knit bag or lady’s nylon stocking

i.         Vitamix or other high speed blender

j.        Quart bowl

2.       Ingredients – raw, fresh, organic

a.       1 pint Bragg’s Apple Cider Vinegar

b.      1 medium white (Bermuda) onion

c.       5 fat cloves garlic

d.      3 habanero peppers

e.      4-inch stalk of horseradish root 2” thick

f.        4-inch stalk of ginger root

g.       10-inch stalk of burdock root 1” thick

h.      Extra virgin Olive, or other good quality, palatable oil


3.       Process

a.       Scrub root vegetables to remove all dirt

b.      Rinse pepper

c.       Peel and cut into chunks:  onion and garlic

d.      Slice all root vegetables into 1/8” cross sections – you do this to keep from overworking the blender

                                                               i.      Variation:  salt fermentation

                                                             ii.      Finely chop all solid ingredients by hand, or in blender or food processor

                                                            iii.      Toss chopped ingredients thoroughly with 1 tsp salt

                                                           iv.      Put salted dry ingredients into a half gallon jar

                                                             v.      Screw lid on jar but do not tighten, or cover jar with cheese cloth and rubber band

                                                           vi.      Allow ingredients to ferment for 7 to 10 days, shaking them or stirring daily

e.      Put solid ingredients into blender

f.        Pour the vinegar into the blender

g.       Puree at high speed for three minutes

h.      Pour resulting mash into washed, clean quart or half gallon jar

i.         Put lid on jar and store away from sunlight

j.        Let sit for one week in cool dark place, shaking it daily

k.       Pour mash into nylon bag or stocking

l.         Gently work the bag by squeezing the pulp to extract the supertonic juice into the bowl. 

m.    Pour supertonic juice into the vinegar bottle, and Mark it SUPERTONIC, with the date.

n.      From that supertonic bottle, fill the 2-ounce dropper bottle.

o.      Store the SUPERTONIC bottles in cool, dark place.

p.      Put the pulp in the bowl, add olive oil and salt, and stir into a paste.

q.      Put the pulp into a jar and label it KAPOW with the date.

r.        Refrigerate the Kapow.

4.       Usage

a.       Supertonic

                                                               i.      Put 2 dropperfuls under the tongue daily as a tonic. 

                                                             ii.      I suggest two tablespoons a day for general health

                                                            iii.      Put 1 dropperful under the tongue every hour during colds, flu

                                                           iv.      Salad dressing – mix 1 ounce supertonic with salt to taste, mix in herbs of choice, then add salad oil of choice

b.      Kapow

                                                               i.      Use as garnish for meat and vegetable dishes

                                                             ii.      Use on sandwiches as a spread for flavor and nutrition


Note:  Supertonic has a reputation of preventing one from getting the black plague.  It also acts as a vaso-dilator to bring a person out of shock.  And it serves as a tonic for boosting immune function, such as when one has a cold or the flu.





Bob Hurt

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Monday, January 02, 2012

Foreclosure Defenders - Hammer Crooked Lenders with the FCIC Report

This post was published to Bob Hurt's Blog at 8:01:21 PM 1/2/2012

Foreclosure Defenders – Hammer Crooked Lenders with the FCIC Report



Financial Crisis Inquiry Commission Report Provides Key to Punishing Fraudulent Lenders in Court

The Financial Crisis Inquiry Commission (FCIC)

From January 2010 to January 2011 the ten-member Financial Crisis Inquiry Commission (FCIC) subpoenaed and interviewed hundreds of witnesses and experts, including banking officials, to determine what caused the financial crisis of 2007 to 2010 that resulted in massive foreclosures, job loss, and collapse of housing values, and total loss of equity for tens of millions of homeowners.

The FCIC Report

The FCIC concluded with a huge, 662-page FCIC Report that implicated government and lenders in a conspiracy to enrich banks, their officers and shareholders at the expense of the American public, particularly homeowners.

The FCIC Report provides mortgagors with a tool for bashing lenders in court, but so far no successes with that tool have bubbled to the surface of the cauldron of foreclosure litigation.  At the very least, mortgagors should use if rigorously if not forcibly to obtain reductions in the loan balance, typically the present value of the realty minus all paid-in equity, or to get their homes free and clear because of lender-government skullduggery. 

The Mortgage Scam

Why should courts order this reduction?  Simple.  The report, as self-authenticating evidence, proves that lenders engaged in predatory practices, making loans they knew would go into default within 3 years, thereby causing a run on insurers of mortgages and derivatives, and a consequent collapse of homeowner equity and jobs.  This would allow lenders to foreclose, buy back the house for a pittance at the foreclosure auction, and cause further hardship on government through FDIC and mortgage insurance claims.

The Scam Enablers:  Our Terrifyingly Esteemed Courts

The scam indeed seems brilliant.  But it only seems so because the courts keep supporting it and refusing to punish it.  That makes the court even more criminally culpable than the original perpetrators.  Why?  Because the judges swore oaths to support the constitutions and to give injured parties (mortgagors as well as mortgagees) redress of injuries.

And Their Foreclosure Defense Attorney Allies

Maybe we could blame mortgagors’ attorneys for failing to use the FCIC Report as a sledge hammer to break the courts’ “slobbering love affair” with mortgagees.  Foreclosure defense attorneys seem more keen on delaying the inevitable foreclosure while picking clients’ pockets of monthly mortgage payments for 6 to 24 months, typically.  They don’t seem so keen on digging into the fraud, tortious conduct, contract breaches, conspiracy, and other violations underlying the mortgage.  They seem almost universally to ignore the widespread tampering of loan applications by mortgage brokers that make an unqualified borrower seem qualified, and to ignore the incessant over-appraising of residential realty from 30% to 50% above actual value, to grease machinery of the residential real estate industry (mortgage brokers, realtors, appraisers, lenders, title companies, and sellers).

The Cheating

Thus, the mortgagor fails to make payments because of job loss or collapse of value below the loan balance.  The mortgagor injures the mortgagee by non-payment, but first the mortgagee injured the mortgagor through widespread predatory lending practices that destroyed the value of the mortagor’s home and investment. 

Bottom Line – Mortgagors Deserve Redress

Bottom line:  the court should not give mortgagees redress to the extent of ignoring the mortgagor’s redress.  The big difference:  the mortgagor didn’t intend to cheat the mortgagee, but the mortgagee certainly intended to cheat the mortgagor.  Lenders devised the mortgage and securitization system specifically for that purpose.  They knew what would happen.  The courts should hold mortgagees responsible before addressing failure to make mortgage payments.

Litigation Strategy – Defend though Vicious Attack

If you have not read the FCIC report, do it NOW, then supply it to the court as Exhibit One in your effort to obtain justice against the world-wide mortgage scam.  If you have a home loan, consult a qualified personal injury attorney about suing your lender for the torts related to the FCIC report, AND for appraisal fraud, loan application fraud, and some of the many other violations, contract breaches, and abuses perpetrated by lenders in pursuit of “easy money.”  If you lawyer won’t do it, dump that lawyer and find one who will.

And Declaratory Judgment to Straighten the Record

Mortgagors should seek redress through declaratory judgment, at the very least.  Since the Government’s own FCIC Report proves the existence of the crime, then that makes government actors and lenders, operating in the fraudulent, treasonous mayhem of “Public Policy,” culpable for RICO violations - civil and criminal racketeering involving Presidents and financial planners of corporations like the United States government and banks.  Even your Representative and Senators share culpability for stewing in ignorance and fiddling with trifles while “Rome burnt” to the ground.

Call to Action

I say foreclosure defense attorneys must pull their heads out of their bottoms and go for the deep pockets, stab with vicious, repeated, staccato litigation at the jugular veins of the scurrilous lenders of America through civil and criminal complaints against culpable lenders and INDIVIDUALS in government and other corporations responsible for the financial crisis that revealed itself through mortgage foreclosures and homeowner equity loss.


Here I provide Google’s top seven  responses to the search request for the Financial Crisis Inquiry Commission Report:


Get the Report : Financial Crisis Inquiry Commission

To view the report of the Financial Crisis Inquiry Commission, you can download the report in full or download a section of the report by clicking on the links ... [PDF] 

Financial Crisis Inquiry Commission - GPO Access

You +1'd this publicly. Undo

File Format: PDF/Adobe Acrobat
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Financial Crisis Inquiry Commission - Wikipedia, the free encyclopedia

[edit] Creation and statutory mandate. The Commission was created by section 5 of the Fraud Enforcement and Recovery Act of 2009 (Public Law 111-21), ...

What Caused the Financial Crisis? - Wall Street Journal

Jan 27, 2011 – Today, six members of the Financial Crisis Inquiry Commission—created by the last Congress to investigate the causes of the financial ...

Financial Crisis Inquiry Commission's 10 Major Findings

Jan 27, 2011 – In a report released today, the Financial Crisis Inquiry Commissionfound that "reckless" Wall Street firms, an abundance of cheap credit and ...

Financial Crisis Was Avoidable, Inquiry Concludes -

Jan 25, 2011 – While the panel, the Financial Crisis Inquiry Commission, accuses several financial institutions of greed, ineptitude or both, some of its gravest ...

Bob Hurt: Financial Crisis Inquiry Commission Report

Mar 8, 2011 – The government issued its Financial Crisis Inquiry Commissionreport and posted it on the web.This report explains the financial crisis in gory ...

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In a November 2009 article, Brookings Institution economists Martin Baily and Douglas Elliott describe the three common narratives about the financial crisis.

The first argues that the primary cause was government intervention in the housing market. This intervention, principally through Fannie Mae and Freddie Mac, inflated a housing bubble that triggered the crisis. This is the view expressed by one of our co-commissioners in a separate dissent.

The second narrative blames Wall Street and its influence in Washington. According to this narrative, greedy bankers knowingly manipulated the financial system and politicians in Washington to take advantage of homeowners and mortgage investors alike, intentionally jeopardizing the financial system while enjoying huge personal gains. That's the view of the six majority commissioners.

We subscribe to a third narrative—a messier story that emphasizes both global economic forces and failures in U.S. policy and supervision. Though our explanation of the crisis doesn't fit conveniently into the political order of Washington, we believe that it is far superior to the other two.

We recognize that the other two narratives have popular appeal: They each blame a clear entity, and thus outline a clear set of reform proposals. Had the government not supported housing subsidies (the first narrative) or had policy makers implemented more restrictive financial regulations (the second) there would have been no calamity.

Both of these views are incomplete and misleading. The existence of housing bubbles in a number of large countries, each with vastly different systems of housing finance, severely undercuts the thesis that the housing bubble was a phenomenon driven solely by the U.S. government. Likewise, the multitude of financial-firm failures, spanning varied organizational forms and differing regulatory regimes across the U.S. and Europe, makes it implausible that the crisis was the product of a small coterie of Wall Street bankers and their Washington bedfellows.

We believe the crisis was the product of 10 factors. Only when taken together can they offer a sufficient explanation of what happened:


The 662-page report, available online, and as a book, offers 10 main conclusions:

1.     "This financial crisis was avoidable."
"Despite the expressed view of many on Wall Street and in Washington that the crisis could not have been foreseen or avoided, there were warning signs," the report reads."The tragedy was that they were ignored or discounted."

2.     "Widespread failures in financial regulation and supervision proved devastating to the stability of the nation's financial markets."
"Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not," the report reads.
"The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup's excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not.

3.     "Dramatic failures of corporate governance and risk management at many systemically important financial institutions were a key cause of this crisis."
Financial institutions acted recklessly and depended too heavily on short term loans, the inquiry found. "Compensation systems--designed in an environment of cheap money, intense competition, and light regulation--too often rewarded the quick deal, the short-term gain--without proper consideration of long-term consequences," it reads.

4.     "A combination of excessive borrowing, risky investments, and lack of transparency put the financial system on a collision course with crisis."
The inquiry found that in the years leading up to the crisis, American households, and institutions, borrowed too much and saved too little.
"When the housing and mortgage markets cratered, the lack of transparency, the extraordinary debt loads, the short-term loans, and the risky assets all came home to roost. What resulted was panic," the report reads. "We had reaped what we had sown."

5.     "The government was ill prepared for the crisis, and its inconsistent response added to the uncertainty and panic in the financial markets."
Key government agencies, the Treasury Department, the Federal Reserve Board, and the Federal Reserve Bank of New York were behind the curve, the report concluded.
"They were hampered because they did not have a clear grasp of the financial system they were charged with overseeing, particularly as it had evolved in the years leading up to the crisis."

6.     "There was a systemic breakdown in accountability and ethics." 
Many borrowers lied about being able to pay mortgages, lenders made loans they knew borrowers couldn't afford, the report said.

7.     "Countrywide executives recognized that many of the loans they were originating could result in 'catastrophic consequences.' Less than a year later, they noted that certain high-risk loans they were making could result not only in foreclosures but also in 'financial and reputational catastrophe' for the firm. But they did not stop."

8.     "Collapsing mortgage-lending standards and the mortgage securitization pipeline lit and spread the flame of contagion and crisis."
The report found irresponsible lending was prevalent, and there were warnings, but "the Federal Reserve neglected its mission," and mortgage lenders passed the risk along.
"From the speculators who flipped houses to the mortgage brokers who scouted the loans, to the lenders who issued the mortgages, to the financial firms that created the mortgage-backed securities, collateralized debt obligations... no one in this pipeline of toxic mortgages had enough skin in the game."

9.     "Over-the-counter derivatives contributed significantly to this crisis..."
Speculating on devices like collateralized debt obligations fanned the flames, with everyone from farmers to corporations to investors betting on prices and loan defaults. When the housing bubble popped, these were at the center of the fallout.

10.  "The failures of credit rating agencies were essential cogs in the wheel of financial destruction..."
But, the report found, those bets wouldn't have been possible without the seal of approval from ratings agencies.
"This crisis could not have happened without the rating agencies. Their ratings helped the market soar and their down- grades through 2007 and 2008 wreaked havoc across markets and firms," the report reads.





Bob Hurt

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