Mortgage Modification, Broken Title, Securitization Audit, Forensic Audit, & Property Solutions Report

Has There Been Financial Treason Committed In The Congressional Budget Office?

by admin on March 28, 2012

in 2 - Broken Chain of Title

During the fall of 2010, Lan T. Pham, PhD was a “senior staffer financial economist” at the Congressional Budget Office. She was fired after less than three months on the job. In February she tried to go public with details about her experience working for Mr. Douglas Elmendorf, the Congressional Budget Office Director. The Wall Street Journal paid her no heed, so she made public a letter she had written to Senator Grassley, ranking member of the Senate Judiciary Committee, on February 23 of this year.

Janet Tavakoli, President of Tavakoli Structured Finance in Chicago picked up the letter and ran a piece about it on her HuffPo blog, referring to it as “Today’s Most Important Finance Story.”

Tavakoli is brilliant when it comes to all things structured finance, like mortgage-backed securities and derivatives. I read a book she published a few years ago, titled: “Dear Mr. Buffett,” which led to others she had written like: “Structured Finance and Collateralized Debt Obligations,”

Janet’s HuffPo piece and the Zerohedge story covered what Dr. Pham described in her letter to Senator Grassley in a balanced, perhaps slightly careful way, primarily covering how the CBO had treated her as related to the “robo-signing scandal,” which had broken in the mainstream media during September of 2010.

Dr. Pham wrote about the implications of robo-signing, MERS, of a potentially broken chain of title, how all of that might impact investors and homeowners… and she did so in-sync with something that might have been written by Georgetown Law Professor Adam Levitin. In response, according to Dr. Pham, CBO’s leadership responded as follows:

“The emerging foreclosure fraud problems in September 2010 were due to “media sensationalism,” and “the kind of event of the moment where we should be adding skepticism,” and “not just repeating the hype in the press,” and discussing it, “lacks judgment about what is important.”

It is evident that the three major televsion networks are ignorant and misinformed. There is no robo-signer. They must have dreamed up the story. If a fraud happens and no one gets prosecuted, then it didn’t happen, right?

It’s reached the point that you can catch a story about fraudulent documents embedded in recorder of deeds offices pretty much every night on either Rachel Maddow or Dylan Ratigan’s shows on MSNBC. So?

The story only broke in mainstream media in September of 2010, and it was more than a year later before the “settlement” was announced. It is obvious that the 50 states Attorney’s General don’t know how to investigate mortgage fraud either. The banks will pay $2000 to every homeowner for every fraudulent foreclosure. Wow.

I’m not at all sure that the courts care all that much that the assignment of Deed of Trust was signed by Mickey Mouse, or even that the law views homeowners as having been damaged by such an occurrence. Again, who cares?

We don’t know what happens next for any homeowner who wins a Broken Chain of Title suit in similar situation, as a result of such a ruling. Does the bank just fix the problem and re-file, and if so, how long might that take… a couple months… six months… or are we to believe that it’s something that can’t be fixed.

We never receive anything tangible in terms of outcome for abused homeowners. Some foreclosure defense lawyers have told us that the goal is to delay and thereby wear down the servicer who ultimately submits by throwing in a loan modification.

You have to first understand what the CBO is all about.

The Congressional Budget and Impoundment Control Act, which was signed into law by President Nixon in 1974, created the CBO, and its primary mandate is to provide Congress with “objective and nonpartisan analysis to aid in economic and budgetary decisions on a wide array of programs covered by the federal budget.”

That means that the CBO is there to shape and support our government’s decisions related to SPENDING our money… regardless of whether Democrat or Republican. It’s counterpart is the Joint Committee on Taxation, which provides Congress with estimates of the revenues that will be available to Congress, the Treasury Department, and for the Executive branch, which are then used to calculate our federal budget.

The CBO is required to submit to the budget committees in the House of Representatives and the Senate, detailed reports about fiscal policy with baseline projections of the federal budget, which is done annually in the Economic and Budget Outlook, and again in a mid-year update. And it shouldn’t be difficult to imagine that in order to conduct this type of detailed analysis for a country of our size and complexity, the CBO needs experts in different areas of study, including:

  • Budget Analysis
  • Financial Analysis
  • Health and Human Services
  • Macroeconomic Analysis
  • Management, Business, and Information Services
  • Microeconomic Studies
  • National Security
  • Tax Analysis

So, the Joint Committee on Taxation tells us the amounts we can expect to come in, and the CBO delivers data and analysis on what we should expect to go out for all federal spending, and since we never have anywhere near enough to balance the federal budget, the CBO’s work is also used to calculate the amount of our deficit… and therefore the amount of our national debt.

Each year, CBO analysts produce, lots of reports, and the one most recognized is titled: “An Analysis of the President’s Budgetary Proposals,” which is made available for the next fiscal year,

The CBO is not the only federal agency involved in budgeting, there’s also the OMB, or Office of Management and Budget, and the GAO, which stands for General Accounting Office, and there’s the Treasury Department too, which shows up with its own numbers when needed.

It’s the CBO that calculates the 35-year baseline projections, which are used so extensively in the budget process. Baseline projections are supposed to show future spending assuming current law, so they’re not supposed to be considered “predictors” of our economy’s most likely future path, but they’re referred to a lot and become the basis for a lot of “GO or NO GO” government financial decisions.

The CBO is a big deal in Washington D.C. Got it? It’s REALLY IMPORTANT that it’s one of the few places in Washington D.C. that’s truly non-partisan. Doncha think?


In Dr. Pham’s letter to Senator Grassley, she explained that while working at the CBO during the fall of 2010, she was told not to publish or incorporate any data about the U.S. housing and mortgage markets… NOTHING about the foreclosure crisis… NOTHING that might spoil the CBO’s “forecasts,” of course, that term extremely loosely.

In fact, Pham’s letter states that she was told in no uncertain terms by CBO leadership, or otherwise came to understand that:

  • Statements could not be made that attributed the decline in property tax revenues to foreclosures and the decline in home prices.
  • Foreclosures had no impact on U.S. home prices.
  • The decline in home prices had no impact on U.S. household wealth.
  • “Alternative viewpoints are suppressed or questioned as ‘pessimistic’ by CBO Director Doug Elmendorf. Economic facts inconvenient to the CBO’s forecasts of economic growth, recovery and other estimates are omitted or suppressed so the desired message may be delivered.”
  • That even though the implications of foreclosures had profound financial and economic consequences that would be of compelling interest to Congress and the public, the CBO sought to SILENCE any such discussion of such risks.

“The CBO declined to comment on Ms. Pham’s allegations. In a December 2010 termination letter, reviewed by the Journal, the CBO said she was unqualified for the job, produced “poorly organized” research and resisted direction from superiors.”


How does a Phd make it through the rigorous and competitive hiring process at the CBO, and then just under three months later, be described as “unqualified for the job,” much less as having “produced poorly organized research”?

How much “research” could she possibly have produced in the first 10 weeks at that sort of job? And Lan T. Pham is 40 years old. By forty, you know if you’re organized or not, don’t you?

As far as resisting direction from superiors, she thought the foreclosure fraud issues were a big deal, but it wasn’t going to be the focus of the CBO to make such judgments then, or probably now. So what and who cares?

Mr. Douglas Elmendorf, in your role as Director of the Congressional Budget Office, did you deliberately withhold, mask and knowingly deliver grossly distorted information vital to the current and future economic, political and social wellbeing of the United States of America during the most severe, prolonged and damaging national economic emergency since the 1930s?

Did you lie to Congress, if only by omission? Also, if you intentionally withheld critical information from and delivered misinformation to the President of the United States, Congress, and the citizens of this country during a national crisis, then you are a financial Benedict Arnold.

If his actions were part of a conspiracy intent on seeing this country’s economy so substantively disrupted as to become utterly destroyed, with trillions of dollars in middle class wealth eviscerated and with no hope for its return in a generation and if knowledge of your acts actually involved someone inside the White House… well then… sir… what have you done?

The CBOs calculations are used as the basis for the single largest source of spending the world has ever known, they lead to establishing the amount of our deficit and then our national debt, which is the basis for our international credit standing.

If Mr. Douglas Elmendorf, as Dr. Pham describes, have produced numbers that fail to account for the impact of foreclosures on consumer wealth, spending, and property taxes… those numbers are garbage… the sort you might have just chosen by throwing darts while wearing a blindfold.
When I think of what has been allowed to happen to the lives of hundreds of millions of American citizens… to the elderly… the destitute, to those too young to know… to say nothing of what such suppression of information has done to untold numbers of people around the globe?

Mr. Douglas Elmendorf is a graduate of Princeton with an undergraduate degree in economics, a Masters in Economics and then a doctorate in economics, and the last two degrees are from Harvard? You cannot claim ignorance or feign indifference.

Maybe we’ll never know who was involved or what Elmendorf has done to this nation by manipulating or withholding such information from Congress, from the president, from the American people and from the world. If Elmendorf did any of it, he is a financial traitor to this country.

  • Elmendorf worked on a team that concluded President Bill Clinton’s health-reform package would cost much more than originally thought. This analysis helped cripple the Clinton overhaul.
  • Elmendorf worked under Clinton Treasury Secretary Lawrence Summers.
  • In 2002, Elmendorf moved to the Fed, working under Alan Greenspan.
  • In April 2010, Elmendorf spoke openly against the country’s growing debt level, saying under current plans the deficit is “unsustainable.”
  • Elmendorf was Chief of the macro-economic analysis team at the Federal Reserve Board from 2002 to 2007.
  • After graduating in 1989, he stayed at Harvard for five years, working closely with conservative economics professor Martin Feldstein, the director of the Council of Economic Advisers (CEA) under President Reagan.
  • In 2008, Jason Furman, the director of the Brookings’ group known as the Hamilton Project left to join the Obama campaign and Elmendorf replaced him as director of the Hamilton Project, a forum for economic policy discussion that was created by Clinton Treasury Secretary Robert Rubin – an advocate of free trade and a small deficit.
  • Elmendorf worked two years at Brookings. While there, he spent much of his time opining on the mortgage collapse, and the appropriate response by the government. While he only called for the nationalization of banks as a last resort, Elmendorf did support a bailout of struggling financial institutions.

Now what?

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