Here we go again! A commission. The politician's way of seeming to do something, though really doing nothing, all the while defusing criticism and dispersing risk. *

Three years late and stunted politically at its very inception, this year's version of a Truth and Reconciliation Commission will likely do little to uncover any truths which we don't already know and reconcile nothing that would not have been reconciled in any event without a commission.

Let's take a close look at the new special investigations unit, already being dubbed the Mortgage Crisis Commission.   

• Marching Orders
• The Players
• Chairman
• Chairmen
• Predators and Prey
• Gambit
• Quis custodiet ipsos custodes?

* Jonathan Foxx is the President and Managing Director of Lenders Compliance Group.

LENDERS COMPLIANCE GROUP is the first and only full service, mortgage risk management firm in the country that specializes exclusively in residential mortgage compliance. The firm provides risk management outsourcing to the mortgage industry, offering a full suite of hands-on and automated services in residential mortgage banking.

On December 29, 2008, our friend Victor Hong wrote the following prophetic post on MNC:

Why Zero-Rate Policy Will Fail, by Victor Hong
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Victor was right. This will work until it doesn't, then BANG!!! These stories speak for themselves. - BC

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(print baby print) Market Now Pricing In $770 Billion Increase In Fed Balance Sheet - Submitted by Tyler Durden - Zero Hedge

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(long on bigger government, short on specifics?) Obama Seeks To Expand Federal Housing Outreach - by MortgageOrb.com - ... Obama also announced the planned establishment of a "Financial Crimes Unit of highly trained investigators" designed to "crack down" on financial fraud. The president did not state if the new unit would be part of the Consumer Financial Protection Bureau (CFPB) or the Department of Justice, and he called on Congress to toughen existing financial fraud laws. ...

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Benanke plans to print more money to buy mortgages - OC Housing News - The federal reserve is dominated by Keynesian economists who all have one thing in common: when their policies fail, they believe doing more will somehow succeed. If the definition of insanity is repeating the same behavior expecting a different result, then all Keynesian economists and all federal reserve officials are certifiably insane.

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Bernanke has "finger on trigger" for new bond buys - By Ann Saphir and Jonathan Spicer - (Reuters) - The Federal Reserve has moved closer to embarking on a new round of its controversial money-pumping after the central bank and its chairman Ben Bernanke highlighted a grim outlook for the U.S. economy.
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Obama Answers Bernanke Plea With Refinancing Plan: Mortgages - By Jody Shenn, Lorraine Woellert and Prashant Gopal - Bloomberg
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Obama Proposes Mortgage Bailouts, Handouts, Copouts Exactly One Paragraph After Stating "Top to Bottom: No Bailouts, No Handouts, and No Copouts"; How the Taxpayer Ripoff Works - Michael Shedlock - ... I found a nice Orwellian set of paragraphs smack in the middle of his speech. ... Finally, and most importantly, every loan that is refinanced will be paid off in full. Thus, any bank, hedge fund, mortgage provider, or GSE that is paid off on a nonperforming loan will be immediately made whole. This is a massive backdoor bailout of banks, mortgage companies, hedge funds, foreign banks, and anyone else holding mortgage related garbage. In case you were wondering about the big rally in bank shares this year, this proposal just might have something to do with it.  ... - MISH'S Global Economic Trend Analysis

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Paul Krugman Makes Housing Call He Will Likely Come to Regret - Yves Smith - ... thougths from Yves ... Now there are also reasons to question whether we will return to historical patterns of homeownership. High unemployment among recent graduates and the great difficulty unemployed middle aged people have in finding work means we may see a sustained reversal of household formation rates, and it may even go as far as leading to larger average household sizes. ... Finally, the 30 year mortgage does not fit with job tenures that now (per a Yankelovich survey commissioned by McKinsey in the mid 2000s) of under 3 years. ... - Naked Capitalism

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(no unity here) Bank Foreclosure Deal Reviewed by States as Delaware Drops Out of Talks - By David McLaughlin - State attorneys general reviewed a proposed settlement with banks over foreclosure and mortgage- servicing practices that negotiators are pressing to complete as Delaware said it would reject a deal said to total $25 billion. – Bloomberg

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Fannie, Freddie Would Need Another $100 Billion From Taxpayers for Obama's Proposed Mortgage Writedowns; Obama Seeks Vote-Buying Opportunity; What's the Real Cost? - Michael Shedlock - Fannie Mae and Freddie Mac have already cost US taxpayers over $200 billion. If Obama gets his way on mortgage writedowns, the GSEs estimate it would take another $100 billion. Since such estimates are always overly-optimistic by a factor of 3 to 10, I estimate the cost to taxpayers would be $300 billion minimum. - MISH'S Global Economic Trend Analysis

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(the gift of ZIRP) Chadwick: The Gift from the Federal Reserve - A Once in a Lifetime Opportunity to Buy a House - By: Patricia Chadwick - It is not often that low mortgage rates coincide with low house prices – the condition that exists today in this country. ...  But we are in an unusual situation today. ... - CNBC
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(GSEs will be around for years - quotes several prominent people) ASF panel: Expect bulk sales and GSE longevity - by JACOB GAFFNEY - ... Jerry Diamond, a managing director at Annaly Capital Management and director of its related real estate investment trust Chimera Investment, said the recent hike in guarantee fees at the GSEs essentially keep the firms around for another 10 years ... - Housingwire
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Should the Government or the Market Set Mortgage Down Payments? A New Study - posted by Melissa Jacoby - UNC's Center for Community Capital has posted a new analysis of 19.5 million mortgage loans originated between 2000 and 2008 finding that mandatory down payments of 10% would lock out nearly 40% of all creditworthy borrowers while a 20% down payment would exclude 60%. - more - Credit Slips
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(print baby print) All Of Last Year's FOMC Dissenters Lost Their Voting Rights - AP - Business Insider 
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EXCLUSIVE: Obama To Announce Mortgage Crisis Unit Chaired By New York Attorney General Schneiderman - Sam Stein -  ... During his State of the Union address tonight, President Obama will announce the creation of a special unit to investigate misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis. -
Huffington Post

and
Is Schneiderman Selling Out? Joins Federal Committee That Looks Designed to Undermine AGs Against Mortgage Settlement Deal - - Yves Smith - New York Attorney General Eric Schneiderman has been celebrated as the progressive Great White Hope. But the danger of assuming leadership is that individual becomes a target both of attacks and of seduction. And while I’d like to think better of Schneiderman, an announcement earlier this evening has strong hallmarks of Schneiderman falling prey to the combined pressures and blandishments of the Administration and its allies. - Naked Capitalism

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(thorough article) Obama Answers Bernanke Plea With Refinancing Plan: Mortgages - By Jody Shenn, Lorraine Woellert and Prashant Gopal - Bloomberg Businessweek

and
Obama makes new push to aid troubled homeowners - By Margaret Chadbourn - (Reuters) - President Barack Obama launched on Tuesday a bid to help more U.S. homeowners get cheaper mortgages, a move that could provide a boost to the struggling economy but is likely to hit stiff opposition from Republicans.
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The FHA is on the rebound, but changes are needed - by Peter Miller - Is the FHA really in peril? The American Enterprise Institute (AEI), a conservative think tank, apparently thinks so. ... The FHA seems to be getting better, not worse (3 points) ... FHA expected to be “very profitable” ... The FHA needs to dump its reverse mortgage program. It’s a loser ... - HSH Blogs

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(on QRM) Big Downpayments Could Bar Creditworthy Borrowers From Market, Study Finds - By ANN CARRNS - ... The researchers found that imposing a 10 percent down payment requirement would eliminate 38 percent of creditworthy borrowers from the traditional mortgage market and that at a 20 percent down payment threshold, 61 percent would be excluded ... “While higher down payments do result in fewer defaults, the payoff is small relative to the number of creditworthy households who could be shut out of the market, the study shows,” said a statement from the Center for Responsible Lending. - NY Times Bucks Blog

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     Nom de Plumber is a Nom de Plume

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A Way to Make People Buy Homes Again – NY Times Opinion

http://www.nytimes.com/2012/01/25/opinion/down-payment-insurance-for-homebuyers.html?_r=1&hp

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Because people still make only small down-payments, despite massive depreciation since 2006, homes seem to remain very risky, unaffordable assets. If buyers are unwilling and unable to shoulder fully that risk, why should taxpayers and renters do so for them, especially without any reward prospect in exchange?