Millions of home loans have fallen into “distressed status” over the past 5 years, as the economy began shriveling up and American families began losing income and falling behind on their mortgage payments.

At a certain point in time lenders (banks, government agencies / loan insurers) file  foreclosure notices on these distressed properties.  A significant number of days may then pass before the process moves on to the next step. The delinquent homeowner may request a short-sale – which the lender may or may not allow.  Or the lender may proceed on to a foreclosure auction.

The “foreclosing beneficiary” (the ‘lender) will set the opening bid for the amount owed on the loan (or the ‘outstanding loan amount’).  And if there are no interested parties willing to bid at that ‘set’ price, then the foreclosing beneficiary comes to legally repossess the property.

These lender-owned properties are known as Real Estate Owned (REO) properties, and are listed on their books as non-performing assets.

RealtyTrac forecasts 500,000 REOs for 2013.  That’s an average of over 1360 “lender repossessions” per day, for each and every day of the year.  That’s over 1360 families daily – losing their homes to banks and government agencies.

And now some big firms like the hedgefund, Blackstone, have been stepping in to buy up these ‘lender-owned’ properties, in mass, in certain markets like Phoenix and Tampa, with support from an “ongoing government-subsidized, GSE/FHFA endorsed REO-to-Rent initiative.”  (ZeroHedge 3-14-13)

Blackstone’s plan is to get the properties fixed up and rented out — with rent-paying tenants in place.

And then they plan to securitize these tranches – similar to the good old mortgage securitizations (MBSs) that were so popular during the housing bubble (the one that ‘popped’ in the Fall of 2008 and pushed the banks underwater and sent the U.S. economy into a tailspin).

So… here is a quick summary.  Homeowners in America (500,000 this year alone) will ‘exit’ their homes as those homes are legally repossessed by lenders (the ‘foreclosing beneficiary’) – banks and government agencies.  The U.S. government then enters the scene to subsidize (yes, SUBSIDIZE) the sale of these homes from the repossessing lender to a hedgefund to turn into rentals for eventual securitization and sale as an  income-producing investment vehicle.

This scheme is a “government-subsidized, GSE/FHFA endorsed REO-to-Rent initiative, through which large asset managers have been encouraged to take advantage of government funded, risk-free financing and purchase foreclosed properties in bulk, with the intention of converting them into rental properties. The REO-To-Rent has traditionally been open to the biggest of financial companies, or at least those who don’t have the stigma of legacy mortgage origination resulting in billions in litigation reserves, which means mostly hedge funds and PE firms.” (ZeroHedge 3-14-13)

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The Leviticus 25 Plan offers a preferred alternative.

Instead of the U.S. government again bailing out the banks by subsidizing the sale of these non-performing assets to investment companies, The Leviticus 25 Plan keeps American families in their homes, so the problem doesn’t develop in the first place.

It is unconscionable that the U.S. government offers no mechanism to provide liquidity to financially distressed American families, but it will provide liquidity to distressed banks to move distressed properties off their books – and into the hands of hedgefunds for ‘grooming’ as securitized investments.

There is only one plan in America that will re-ignite real economic growth, pay for itself over a 10-15 year period, and deliver substantial ‘ground-level’ benefits to Americans.

The Leviticus 25 Plan.

When the Fed auctions off various financial securities each month (to raise funds to cover monthly deficits), each of those securities is identified by a specific Identification number.  This unique number is called a “CUSIP.” This acronym stands for the “Committee on Uniform Securities Identification Procedures.”

Note this more complete definition:  Committee on Uniform Securities Identification Procedures  –  A board that assigns a nine-digit number to every stock and registered bond that trades in the United States. CUSIP is owned by the American Bankers Association and is operated by S&P. A CUSIP number facilitates trade and settlement by making each security unique from every other of the same class. CUSIP numbers are recorded in each trade. 

Well… on February 14, 2013, the Fed auctioned off some 30-year Bonds (note the CUSIP – “912810QZ4”):

TREASURY AUCTION RESULTS                                                                              

Term and Type of Security 30-Year Bond                                                            

CUSIP Number 912810QZ4                                                                                      

Series Bonds of February 2043

The auction bidders typically include the Primary Dealers, the direct (non-Primary Dealer) bidders and the Indirect Bidders (Central Banks).

The Primary Dealers enjoy a practically conjugal relationship with the Fed, and they are obligated, in accordance with that special to ‘take’ or ‘buy’ whatever portion of the debt auction not bid/purchased by the other bidders.  And that is generally substantial.  According the Federal Reserve Bank of New York, the “primary dealers alone account for 70.9 percent of Treasu8ry securities sold to the public, on average. “

Immediately following the Valentine’s Day auction this year (5 days later, on February 19, 2013), the Fed ‘bought back’ the majority of that very same 2-14-13 CUSIP ($39 billion worth – see below) from the Primary Dealers (who were unable to ‘move’ that paper to their clients and did not wish, themselves, to ‘sit on it’).

The Fed repurchases this ‘paper’ in Permanent Open Market Operations (POMOs) and the paper then ‘sits’ in the Fed’s System Open Market Account (SOMA).   The Government then ‘pays interest to itself on money that it borrowed from itself.”

And, guess who gets paid a healthy commission to ‘take’ the paper, and then shuffle it back to the Fed…?

That’s right —  the Primary Dealers (see who they are here).

This would be the equivalent of making a purchase at a Wal-mart, then then returning the product, and being paid a commission to boot.  Here is the 2-19-13 POMO summary (note the same CUSIP “912810QZ4” for $39 billion):

And… the Fed ‘funnels’ a lot of money through the Primary Dealers. Note the blue line (2009-2013) on this chart – courtesy of The Wall Street Examiner:

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The Fed’s ‘liquidity funneling’ maneuvers have been weakening the Dollar (vs hard assets) over the past 4 years (inflation).  And very little of the ‘liquidity’ benefits are reaching American families.

It is time for a change.

 The Leviticus 25 Plan.

David Stockman – “The Great Deformation”                                                          Accessed from ZeroHedge                                                                                     [Excerpts]

“The Wall Street meltdown of September 2008 accelerated the recessionary forces already in motion, causing a total job loss of 7.3 million between the December 2007 peak and the end of the recession in June 2009. That the Fed’s bubble finance had camouflaged the failing internals of the American economy then became starkly apparent. Nearly three-fourths of this reduction was accounted for by the above mentioned loss of 5.6 million breadwinner jobs; that is, nearly 8 percent of their pre-recession total.

That devastating hit left the nation with only 66.2 million prime jobs and set the clock back to the level of early 1998. This is an astonishing fact:  before any of the Greenspan-Bernanke maneuvers to coddle Wall Street and pump up the wealth effects elixir—that is, the 1998 LTCM bailout, the 2001–2003 rate-cutting panic, the August 2007 Bernanke Put, and the Fed’s post-Lehman tripling of its balance sheet – there were more breadwinner jobs than there are today. Since the BlackBerry Panic the Fed has relentlessly pumped freshly minted cash into the bank accounts of the twenty-one government bond dealers. Not surprisingly, therefore, there has been a jarringly divergent outcome between Wall Street and Main Street.

By September 2012, the S&P 500 was up by 115 percent from its recession lows and had recovered all of its losses from the peak of the second Greenspan bubble. By contrast, only 200,000 of the 5.6 million lost breadwinner jobs had been recovered by that same point in time. To be sure, the Fed’s Wall Street shills breathlessly reported the improved jobs “print” every month, picking and choosing starting and ending points and using continuously revised and seasonally maladjusted data to support that illusion. Yet the fundamentals with respect to breadwinner jobs could not be obfuscated.

On the eve of the 2012 election, for example, there were 18.3 million jobs in the goods-producing sectors: manufacturing, mining, and construction. These core sectors of the productive economy had taken a beating during the Great Recession, shedding 3.5 million jobs, or 15 percent. Yet after three and a half years of so-called recovery, the jobs count in the goods-producing sectors had not rebounded in the slightest; it had actually declined slightly from the 18.5 million jobs recorded at the end of the recession in June 2009.

Likewise, there were 7.8 million jobs in finance, insurance, and real estate, meaning virtually no gain from the 7.7 million jobs at the end of the recession.

In short, after forty months of “recovery” there was virtually no change in every category of breadwinner jobs that had been slammed by the Great Recession.

Thus, there had been 130.8 million total jobs in January 2000, and this figure had reached 138.0 million by the December 2007 peak. The Great Recession sent the jobs count tumbling all the way back to the starting point, actually dipping slightly lower to 130.6 million by June 2009. Then, after forty months of “recovery,” the BLS reported 133.5 million nonfarm payroll jobs for September 2012. The Bernanke bubble had thus “recreated” only 40 percent of the jobs that had been “created” by the Greenspan bubble the first time around.”

Full report – accessed from ZeroHedge

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The Leviticus 25 Plan initiates economic recovery at ‘ground level’ in America.  It provides direct credit extensions to American citizens for the express purpose of eliminating debt at the family level.

Big government central planning has been a dismal failure.

It is time for a fresh start – one that advances the cause of economic liberty in America.

The Leviticus 25 Plan.

Some of the very banks that received trillions of dollars in cash transfusions and loan guarantees from the Federal Reserve and U.S. government – at tax-payer expense, directly or indirectly – are now “manipulating benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to a Bloomberg investigation.”

ZeroHedge 6-12-2013:                                                                                               Banks Rig $4.7 Trillion A Day Currency Markets To Profit Off Clients                        [Excerpts]

“Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said five current and former traders, who requested anonymity because the practice is controversial.

Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years.

The behavior occurred daily in the spot foreign-exchange market and has been going on for at least a decade, affecting the value of funds and derivatives and all investments.

The Financial Conduct Authority, Britain’s markets supervisor, is considering opening a probe into potential manipulation of the rates, according to a person briefed on the matter.

Informed observers have long warned that the global $4.7-trillion-a-day foreign exchange market, the biggest in the financial system has all the hallmarks of a casino.

The inherent conflict banks face between executing client orders and profiting from their own trades is exacerbated because most currency trading takes place away from exchanges.

“The price mechanism is the anchor of our entire economic system,” said Tom Kirchmaier, a fellow in the financial-markets group at the London School of Economics. “Any rigging of the price mechanism leads to a misallocation of capital and is extremely costly to society.”

……………..

The traders interviewed by Bloomberg News declined to identify which banks engaged in manipulative practices and didn’t specifically allege that any of the top four firms were involved. Spokesmen for Deutsche Bank, Citigroup, Barclays and UBS declined to comment.

It is becoming increasingly evident that many key financial markets are being rigged and manipulated by banks and central banks today. Some of the manipulation is overt, some is covert.

The world’s largest banks are fixing prices in many key markets and benchmarks which is affecting the value of money itself and will ultimately leading to the value of money in your pocket becoming worth much less.”   Full article

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And the key question remains… “If America chooses to continue transfusing billions-trillions of dollars to major banks (which continue ton engage in “overt” or “covert” criminal activity –  according to Bloomberg) – at the expense of U.S. taxpayers and others around the world, then shouldn’t honest American citizens also be granted the provision of direct credit extensions to resolve financial stresses at ‘ground level’ in America?

Answer:  Yes.

The Leviticus 25 Plan.

PEW Research, April 23, 2013:                                                      

A Rise in Wealth for the Wealthy; Declines for the Lower 93%  

[Excerpts]

“During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%, according to a Pew Research Center analysis of newly released Census Bureau data.”

“From 2009 to 2011, the mean wealth of the 8 million households in the more affluent group rose to an estimated $3,173,895 from an estimated $2,476,244, while the mean wealth of the 111 million households in the less affluent group fell to an estimated $133,817 from an estimated $139,896.”

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The Leviticus 25 Plan broadens out economic benefits for all Americans.

Key benefits:

1. Provide direct liquidity infusions to all American citizens.

2. Optimize the allocation of health-care services and spending (including Medicare and Medicaid).

3. Improve the economic climate for U.S. small businesses.

4. Improve employment opportunities for all Americans.

5. Generate a long-term, healthy stream of tax revenue for government (federal, state, local).

6. Reduce the cost of government.

7. Stabilize the U.S. housing market.

8. Stabilize the U.S. banking system – and moderate risk dangers from certain derivatives and rehypothication stratagies.

9. Reduce the scope of social programs and their control over U.S. citizens.

The Leviticus 25 Plan will revitalize economic progress and incentives for all Americans.

One of the main underlying presumptions of The Leviticus 25 Plan is that U.S. citizens should be treated with the same deference that many of the ‘too big to fail’ banks have received (and continue to receive).

Take HSBC, for instance.  This major U.K. banking titan (formerly the Hong Kong Shanghai Banking Corp) and current Fed-approved Primary Dealer, had purchased massive levels of credit default swaps from AIG  by the fall of 2008 – evidently without checking on the creditworthiness (and reserve levels) of AIG.

The housing bubble popped that fall, and AIG went ‘toes up’ as their counterparties (HSBC and numerous others) sought to collect.

The U.S. government immediately stepped in to fully fund (100 cents on the dollar) a $90 billion payout (“collateral postings”) to the major AIG counterparties involved.  

HSBC Holdings received a pass-through payment, courtesy of U.S. taxpayers, of $3.5 billion.

And… it was recently revealed that HSBC has been running “the largest drug-and-terrorism money laundering case ever” uncovered by the Justice Department.  The penalty – a slap on the wrist.                                                                                        

The Leviticus 25 Plan proposes that U.S. citizens be accorded the same financial deference that banking conglomerates like HSBC have been receiving.

Source:  Zero Hedge 2/11/13:  “How The Fed Is Handing Over Billions In “Profits” To Foreign Banks Each Year”

Fed QE flows over the past 4 years, dating back to March 2009, show that foreign banks have been the primary recipients of “cash generated by Fed excess reserves.”

Small domestic banks and large domestic bank cash reserves have been flat to modestly higher (a ‘steady’ $800 billion) over the 4-year period, while “Foreign Banks” have nearly doubled their cash reserves during that same time – from the newly created reserves.

This was confirmed by the Fed itself, which in a paper from November 2012, admitted just this when it said that “the recent unprecedented build-up of cash balances by [foreign banks] was almost entirely composed of excess reserves.”

And where does this “foreign bank” cash ‘park itself?’ 

Answer:  These foreign bank excess cash reserves are parked at “Reserve Banks” – currently about $954 billion, earning 0.25% interest (which the Fed decided to start paying out in December 2008).

The “Fed paid some $6 billion in interest to foreign banks, in the process subsidizing and keeping insolvent European and other foreign banks, in business and explicitly to the detriment of countless US-based banks who have to compete with Fed-funded foreign banks and who have to fire countless workers courtesy of this Fed subsidy to foreign workers.”

“From December 2008 through the last week of January [2013], the Fed has paid out some $6 billion in cash (red line) to European banks simply as interest on excess reserves:”

“But that’s just the beginning. If we are correct in assuming that QE3 will be a replica of QE2 when all the new reserves created ended up as cash on foreign bank balance sheets, it means that we can quite accurately forecast what the total foreign bank cash position will be on December 31, 2013 (as the Fed will certainly not end its open ended monetization of the US deficit before then, or likely, ever). The result: just under $2 trillion in cash held by foreign banks operating in the US, which also means that in calendar 2013, the Fed will fund and subsidize foreign banks a blended interest payment of $3.5 billion! This is entirely separate from the $2 trillion liquidity subsidy that Bernanke will also have handed out to keep these banks afloat, and is $3.5 billion that will flow right through the P&L and end up in the pockets of offshore shareholders who otherwise would very likely be wiped out had it not been for the Fed’s relentless efforts to bailout foreign banks.”

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If foreign banks are deserving of Federal Reserve-generated liquidity flows, then U.S. citizens are equally deserving.

It is time for U.S. citizens themselves to move to the head of the line – and receive their own credit extensions direct from the Federal Reserve.

The Leviticus 25 Plan.

(Bloomberg, Dec 19, 2012 – excerpts) –  “Bank of America Corp. has amassed $64 billion of mortgages that are at least six months delinquent and have yet to enter foreclosure, more than twice the amount held by its four largest competitors combined.”

“Bank of America’s stockpile of deteriorating debt is mostly from its 2008 acquisition of Countrywide Financial Corp., once the nation’s largest mortgage provider. Wells Fargo & Co. (WFC), the biggest U.S. servicer, has $15.3 billion of such unpaid loans.”

“Bank of America has about 930,000 loans that are at least 60 days delinquent, down from 1.5 million from the peak in January 2010, Chief Executive Officer Brian Moynihan, 53, said during a Dec. 14 event at the Brookings Institution in Washington.”

“The bank also has a large portion of delinquent Federal Housing Authority mortgages…”  Note:  taxpayers are ‘on the hook’ for these FHA guaranteed loans (and the FHA recently announced that its reserve fund is ‘dry’ and they are on the verge of defaulting).

Note:  Bank of America’s $64 billion in delinquent mortgage represents an amount greater than half of their current market cap.

Full article: Bloomberg 12-19-12

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Nationwide, November 2012: RealtyTrac reports that 1,547,825 homes are under a foreclosure filing in the U.S..

The Leviticus 25 Plan would provide a mechanism for American families to ‘clean up’ delinquent mortgages and engage in successful ‘work out’ plans to regain ownership of their homes.

This would stanch the banks’ balance sheet bleeding and stabilize the housing market.

The Leviticus 25 Plan would pay for itself over a 10-15 year period.

No other plan can make that claim.  And no other plan can deliver the power of economic liberty – and do so much to serve the interests of individual U.S. citizens.