Banks on the Brink? Foreclosures halted all over the place!

I have been fascinated by the news of the past few days. Major banks including GMAC/Ally Bank and now Bank of America, the huge behemoth mega-mortgage maker (they took over bankrupt Countrywide a couple years ago), have had to stop all foreclosure cases in the US due to allegedly fraudulent practices of not having verified actual mortgages on the properties they are foreclosing. It seems there is this huge problem with the mortgages having been bundled into this securitized investment stuff that brought down AIG and Lehman, and this electronic "proof" of a particular home mortgage is not enough for judges to rule on when foreclosures come before them. Tens of thousands of foreclosures have been halted nationwide.

One analyst I read regularly, Harvey Organ, says that this will be the death knell of many major banks, and even our whole system, as now the "assets" that make up the collateral for all the mortgages on the books of these banks is gone, unavailable, "Kaput!" as Lily von Schtoop would say.

I don't know how bad it will be, but I sure as heck wouldn't want to be a shareholder in a US bank that holds a lot of bad mortgage exposure. It seems that the new world order has become very disorderly for the banker types, I hope they don't bring the honest people down with them!

Hmmm, I wonder what the price of gold, silver, platinum and palladium will do THIS week?