Occupy the New Year

Watch live streaming video from califather at livestream.com

Where’s Our Money greeted the New Year in church – All Saints Church in Pasadena.I moderated a panel on the foreclosure crisis, with three people who have been on the front line of trying to find solutions, help people save their homes and hold bankers for their continuing fraud.

I met Walter Hackett when I first began writing about foreclosures in early 2009. He’s a former banker who became a homeowner’s advocate, as well as a leader in training other lawyers in one of the most complex areas of law. Jono Shaffer and Carlos Marroquin were two of the great people I met through Occupy. Jono, a veteran labor organizer who spearheaded the Justice for Janitors campaign, now works with ReFund California, a coalition that is fighting the austerity agenda across a range of issues, including education, housing and making Wall Street and the 1 percent pay its fair share, rather than making the middle-class bear all the costs of the economic collapse.

Carlos is one of the great spirits of Occupy LA, who through his advocacy and blog, No2HousingCrime.com has helped individual homeowners and put the spotlight on the foreclosure crisis.

The panel was part of stellar afternoon teach-in sponsored by Occupy’s Interfaith Sanctuary as part of the run-up to the Occupy the Rose Bowl Parade the following day.

I thought Walter, Jono and Carlos each made strong presentations and I recommend that you catch up with them in the video shot by my friend Vincent Precht, a stalwart Occupier, special education teacher who also has a terrific blog, California Father, where he writes about education issues, among other things.

It was a great way to start the new year, joining with people who have been doing good strong work for a long time, realizing how much resources we have, along with all the people who are finding their own way into the Occupy movement.

 

 

Foreclosures / Occupy - 01/08/2012

Going to the White House

I've been a politics geek since I was about 10 years old and I went from reading the sports page of the Detroit News to the front page. I've been reading about it, arguing about it, covering it on some level as a journalist, and some times writing about it as an advocate, ever since.
So getting invited to the White House as part of a delegation of California activists, organizers and bloggers, organized by the Courage Campaign, is a big deal. A lot of us have expressed frustration with the Obama administration for it’s unwillingness to focus on jobs and housing in a more effective way, for its embrace of the austerity agenda, and its failure to hold bankers accountable in any meaningful way for the financial collapse that the whole country is still suffering from.
I was ambivalent about going at first, because this administration has sometimes seemed so determined not to get to it, to prize elusive bipartisanship over a strong fight for what’s right, for its cluelessness about the depth of the unemployment and housing crisis that continues to cause so much misery across the country.
That cluelessness was on display again in the past few days, when the president proclaimed no deficit deal would be fair without “shared sacrifice” that would require hedge fund managers to pay higher taxes while the government cut Medicaid. Does the president really believe that the sacrifice is equivalent – millionaires having to get by on a little less while people who are dependent on the government for health care get less care?
Even in planning our visit, the White House doesn’t seem to get it. We’ll have break-out sessions on education reform, the new health care law, lesbian gay transgender bisexual issues, the environment and labor – but no session on the foreclosure crisis and housing. The administration’s efforts in this area, so crucial to California’s economy, have been particularly lame. Whether or not the president’s staff wants to focus on it, I’m sure they will get an earful.
What I will suggest to the president’s people is that he’s vulnerable because he hasn’t done enough to reduce unemployment or to address the foreclosure crisis, and because too often he has accepted the Radical Republicans’ and the deficit hawks’ terms of the debate. When the president debates on those terms, he loses. We all lose.
Still, I don’t want to give up on the administration or the people who continue to put their faith in him. I’ll go in memory of my father, Irving Berg, who would be 90 this year. He saw great promise in Obama and wouldn’t allow frustration to cause me to give up on him, or fail to participate in some effort that might set Obama on a firmer course.
We meet with the president’s top staff on Friday all day. Any messages you want me to deliver?

Action / D.C. Disconnect / Foreclosures / Martin Column / Outrage / President Barack Obama - 09/22/2011

"Wall Street Is Our Main Street" NOT

New York's Attorney General is under pressure from banks and, sadly, the federal government, to agree to a sweetheart settlement that will let the financial industry off the hook for its mishandling of mortgages and foreclosures, today's New York Times reports.

As my colleague Marty Berg has reported, the settlement, negotiated by other state Attorney Generals, is a disaster for consumers who got screwed by the financial industry that taxpayers had to spend hundreds of billions to bail out three years ago. Most of the banks are doing great now, while many Americans are barely hanging on by their fingernails.

The  Obama Administration - from the Justice Department to the Department of Housing and Urban Development – is pushing NY AG Eric Schneiderman to agree to an $20 billion settlement that would actually prevent people from further litigation against Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. It's been widely criticized as a sell-out. Schneiderman's also pissed off Wall Street for trying to scuttle another settlement that would have shortchanged investors.

A member of the Federal Reserve Bank of New York told the Times "Wall Street is our Main Street... we have to make sure we are doing everything we can to support them," that is, of course, "unless they are doing something indefensible." Yeah, right.

There haven't been many heroes over the last few years willing to take on Wall Street on behalf of the silent majority of Americans who can't make campaign contributions. The New York AG is one, and he deserves to know we appreciate his efforts. If you agree, email his people: NYAG.Pressoffice@oag.state.ny.us – or tweet him @AGSchneiderman.

 

 

 

Action / Foreclosures / Harvey Column - 08/22/2011

With Watchdogs Like These...

It would be bad enough if our leaders were letting the high-finance big shots off the hook for their misdeeds because the authorities were just too incompetent to catch them.

But what’s worse is that those in power don’t want to hold the high rollers accountable and run the other way when any opportunity presents itself to shine a light on how we got here.

The most recent examples are the shenanigans of Rep. Darrell Issa, head of the House Committee on Oversight and Reform.

Issa’s committee could play a crucial role in highlighting the abuse and fraud that led to the crisis if he chose, similar to the one played by Ferdinand Pecora’s hard-hitting investigation into the financial corruption and speculation that led to the Great Depression.

But Issa, a Republican, has other agendas in mind – like embarrassing the Democrats and protecting Republican interests in winning more donations from Wall Street. His priorities have been in lock-step with the Republican attack on government regulation of corporations, rather than figuring out how government might do a better job of responding to corporate abuse.

This week he hastily canceled an inquiry into the Financial Crisis Inquiry Commission after emails surfaced that would have severely embarrassed Republicans on that bipartisan commission that investigated the causes of the financial collapse.

In response to Issa’s investigation, the Democrats on the commission issued another report, accusing the Republicans of rigging their conclusions to support their political goals – weakening the Dodd-Frank financial reform.

The commission itself had long ago collapsed along partisan lines, with Democrats issuing a report that reached bland conclusions – it was everybody’s fault, while three of the committee’s Republicans were reluctant to blame anybody except to the extent that they agreed with the bankers – it was the fault of an unforeseeable global housing collapse.

The fourth Republican, meanwhile, fixed the blame on the right’s favorite bogeymen – poor people, Fannie Mae and Freddie Mac.

But the FCIC’s Democrats have now unearthed an email sent by that fourth Republican, Peter Wallison, fellow at the right-wing American Enterprise Institute think tank, to another FCIC Republican, Douglas Holz-Eakins, the day after Republicans took the majority in the House of Representatives last year. In the Nov. 3 email, Wallison wrote that it is "very important" that the separate GOP statements "not undermine the ability of the new House GOP to modify or repeal Dodd-Frank."

Issa has a chance to redeem himself by joining the senior Democrat on the oversight panel, Elijah Cummings in scrutinizing the shameful foreclosures of members of the nation’s military.

I wouldn’t hold my breath for that to happen.

While Issa has shown some willingness to tackle an investigation of the Obama administration’s failed foreclosure relief program, he’s shown no interest in the robo-signing scandal or aspects of the housing crisis that might embarrass the big banks.

Martin Berg

 

Around the Web / Financial Crisis Inquiry Commission / Foreclosures / Martin Column - 07/13/2011

The Scandal That Won't Go Away

Despite the efforts of our public officials and bankers to ignore it, downplay it, paper it over or make it disappear, the fraud surrounding the mortgages at the heart of the financial collapse is the scandal that won’t go away.

Two big stories breaking over the past week showed what strong legs the scandal has. First, Huffington Post reported on a series of confidential audits that showed five of the country’s largest mortgage companies defrauded taxpayers in their handling of foreclosures on homes purchased with government-backed loans.

Then the New York Times and others trumpeted an investigation of the mortgage securitization process by New York’s new state attorney general, Eric Schneiderman. This investigation won strong praise from two of the toughest watchdogs on the financial beat, Matt Taibbi at Rolling Stone and Robert Scheer at Truthdig, who portrayed Schneiderman as a hared-charging prosecutor who unlike the feds and other state attorney generals, is not intimidated by Wall Street.

But Reuters financial blogger Felix Salmon argued that confidential audits, which were turned over to the Justice Department were a much bigger story than Schneiderman’s investigation.

Until Schneiderman’s investigation bear some fruit, I think history suggests we should be skeptical of officials who claim they are going to get tough on the banks and protect consumers.

Salmon pinpoints the real significance of the Schneiderman investigation – the continuing cracks in the state attorney general’s 50-state coalition that was negotiating with the banks to settle claims of mortgage fraud. Some Republicans had already criticized the state attorney generals for being too tough on the banks, referring to a proposed settlement as a shakedown. Other critics have raised questions about whether the attorney generals are being too soft, having sat down to negotiate without having done robust investigations first to gather ammunition.

Whatever the outcome of these on-going investigations’s, the week’s news guarantees one thing – the mortgage fraud scandal, and its offspring the foreclosure scandal, are not going away any time soon.

 

 

 

 

 

 

Around the Web / Foreclosures / Martin Column - 05/19/2011

From Prosecutions to Peanuts

It was only last December that the head of a 50-state attorney general investigation into foreclosure fraud boldly told homeowner advocates, “We will put people in jail.”

That was Tom Miller, Iowa attorney general, who added, “One of the main tools needs to be principal reductions, just like in the farm crisis in the 1980s…there should be some kind of compensation system for people who have been harmed…And the foreclosure process should stop while loan modifications begin.  To have a race between foreclosures and modifications to see which happens first is insane.”

That was then. Now Miller is backing off his tough talk, replacing it with a strategy of negotiating with the big banks and a bunch of federal agencies to come up with a settlement.

The amount of the potential settlement is $20 billion, according to press reports.

Gone is any notion of prosecutions.

There’s been a lot of discussion about whether this amount is too high or too low. The banks contend that they might have been sloppy about their paperwork but they foreclosed on only a few people who hadn’t been making their mortgage payments. No harm, no foul.

But homeowner advocates and critics are outraged, arguing that the banks are guilty of more than slovenliness, they violated laws intended to protect consumers. You can’t pass laws that require banks to follow certain procedures and then allow the banks to flout them. That reinforces one of the most corrosive aspects of the bailout and its aftermath – that the system is rigged so that the banks don’t have to follow the law.

Not to mention that $20 billion is pocket change to the big banks and won’t go far in modifying the mortgages that they refused to touch so far.

In addition, any fund that is controlled by the banks rather than a responsible government agency is a recipe for continued inaction by the banks.  See the disastrous Obama Administration HAMP program, which is somewhere between an abject failure and an actual scam that rips off homeowners.

Miller’s retreat is not the only distressing signal coming from the foreclosure front. Here in California the new state attorney general, Kamala Harris, made the strong protection of homeowners in foreclosure a key plank of her campaign. Yet her office recently signed off on a feeble $6.8 million settlement of a lawsuit against Angelo Mozilo and another top official of Countrywide Financial who presided over that company’s orgy of subprime lending before the financial collapse.

$5.2 million of the money goes into a restitution fund for victims. Mozilo and his president, David Sambol, admitted no wrongdoing. They’re not on the hook for the money- Bank of America, which bought Countrywide will pay it for them.
As David Dayen points out on Firedoglake, the settlement was probably inherited from her predecessor, the present governor, Jerry Brown. But that doesn’t mean she has to tout such a pittance as some great victory for the state.

It’s just a very small drop in a bucket with a very big leak in it.

If you live in California, you can call Harris’ office and suggest she stop caving into predatory lenders and start living up to her campaign promises.

Wherever you live, please contact your attorney general and remind them they are, after all, not the bankers’ buddies, but the people’s prosecutors.

Here are numbers where you can reach your state attorney general.

 

Around the Web / Foreclosures / Martin Column / Outrage - 03/04/2011

Will Afghan Bailout Trump U.S. Homeowners?

At least you know where the Tea Party stands. If it’s a government program, they want to end it.

The Democrats are murkier. They propose tepid solutions to serious problems like the foreclosure crisis, then when their programs don’t work it, ends up reinforcing the Tea Party’s arguments that government doesn’t work.

So the Tea Party-driven Republicans come along and want to whack the Obama administration’s failed foreclosure prevention scheme known as the Home Affordable Modification program. They would probably want to whack it even if it was working, but that’s another subject.

The Tea Party doesn’t offer anything in its place. Homeowners are pretty much on their own at the mercy of the banks.

So much for the American Dream.

Many people have pointed out that the HAMP program is something between an abject failure and a scam that rips off already beleaguered homeowners.

The Obama administration doesn’t offer so much of an argument in its defense as a hapless shrug. In this video, Treasury Secretary Timothy Geithner acknowledges that the foreclosure prevention program amounts to a “tragic, terrible mess.”

But hey, the administration says, it’s better than nothing.

Meanwhile, the foreclosures continue while authorities investigate massive fraud by the banks in the foreclosure process.

This is not a debate calculated to offer much confidence that our public officials can deal effectively with the problems that afflict those of us who live in the reality-based community.

I was reflecting on this tawdry spectacle while reading about the latest developments in the latest “too big to fail” bank bailout to strike at U.S. taxpayers – this one in Kabul, Afghanistan. My colleague Harvey Rosenfield warned about this brewing fiasco several weeks ago.

Apparently the wildly corrupt officials and their cronies used the bank as their private piggy bank, and the bank’s imminent collapse is now a greater threat to Afghanistan’s security than the Taliban.

As recently as last September, officials were offering assurances that U.S. taxpayers would not have to pay for a bailout. Now apparently if we don’t cough up $1 billion the war and the country will be lost and all the previous billions we’ve squandered there will have been wasted.

So we can’t afford a dime to help homeowners in this country but we must spend $1 billion to bail out the Afghans.

I don’t expect the Democrats to put up much of a fight against such an outrage.

I hope the Tea Party stands strong on this one.

 

 

 

Around the Web / Foreclosures / Martin Column / Outrage / Too Big To Fail - 03/02/2011

Big Bank Launches Attack on Military Families

America’s least-hated banker hasn’t had much to say about how his institution, JPMorgan Chase, wrongfully foreclosed on 14 military families and overcharged thousands of others.

That banker would be Jaime Dimon, the subject of a flattering profile in the New York Times magazine last month, in which he was portrayed as an astute and careful risk manager and staunch defender of the benefits of large banks. Dimon admitted that he wasn’t careful enough before the financial collapse – he missed the problems posed by the securitized pools of investments stocked with bad mortgages that nearly sank the economy.

In the wake of disclosures last year about massive problems in the foreclosure process, Dimon led the charge in dismissing them. He appeared to be less concerned with evidence of bankers’ extreme carelessness than he was that the efforts of 50 states' attorneys general to investigate might slow down the housing recovery.

As Fortune reported, “He (Dimon) strode into the foreclosure fiasco last fall with guns blazing, as usual, claiming Chase wouldn't be tarnished by the banking industry's mortgage misbehavior.”

Dimon has repeatedly insisted his bank hadn’t wrongly foreclosed on anyone.

Whoops.

Over the last several weeks, the news media has reported that JPMorgan Chase had wrongfully foreclosed on 14 active-duty military families and overcharged thousands more on their mortgages.

Bank officials said they discovered mistakes and were in the process of reversing the foreclosures and about $2 million in fees to 4,000 families that the bank overcharged.

The bank may have discovered those ‘mistakes’ in the process of preparing their response to a lawsuit filed by a South Carolina Marine captain whose house they foreclosed on, in violation of the protections provided by the Servicemembers Civil Relief Act.

Under that law, banks aren’t supposed to charge active-duty members of the military more than 6 percent interest on the mortgages.  In addition, members of the military are supposed to be exempt from the delinquency process – including foreclosure.

The Marine captain, Jonathan Rowles, is serving in South Korea. His wife, Julia Rowles, told National Public Radio that she and her husband have been fighting with Chase ever since Rowles was commissioned as an officer five years ago.

They got harassing collection calls, sometimes in the middle of the night, Julia Rowles said. "They would say, 'we will take your house. We will report you to the credit agency. This is a bad situation that you don't want to be getting into. Pay us today.' ”

The bank was charging them 9 to 10 percent interest and nearly $2,000 a month, when they should have been paying $1,400."

JPMorgan’s Dimon has sent his PR spokesmen to deal with the mess. Back in November, Dimon has insisted that his bank is especially friendly toward those who serve their country. On Veterans’ Day, he was touting JPMorgan’s increased efforts to recruit veterans because “it is, quite simply, the right thing to do.”

In the wake of JPMorgan’s disclosures, other big banks, including Citibank, Ally Bank and Goldman Sach’s Litton Loans are reviewing their policies concerning home lending to military families.

Unfortunately, the JPMorgan fiasco is only the latest in a long, tawdry history of financial institutions targeting members of the military for predatory lending. During the recent fight over financial reform, the nation’s military leaders had fought to have the nation’s car dealers covered by the new financial consumer protection agency. But they were no match for the clout of the car dealers, who won the exemption they lobbied for.

According to Army Times, Chase has advertised itself as a military-friendly bank since at least 2005, when it began touting its Home Finance Military Mortgage program, which offers a discount on closing costs in home purchases or refinancing for military members and retirees. Mobilized National Guard and reserve members who had a Chase mortgage in good standing could defer entire mortgage payments for up to 18 months during call-ups. Both those initiatives go beyond the requirements of the SCRA. A bank spokesman couldn’t say if any of the 4,000 service members receiving checks, or Rowles, for that matter, participated in those initiatives.

In November, Dimon celebrated Veterans’ Day by touting his banks’ efforts to recruit those who served their country to work at JPMorgan because “it’s the right thing to do.”

This week Dimon is off to the meeting of the global elite at Davos, Switzerland, where he was complaining about the unjustified hostility toward his profession. “I just think this constant refrain [of] ‘bankers, bankers, bankers,’ - it’s just a really unproductive and unfair way of treating people,” Dimon said. “People should just stop doing that.”

Foreclosures / Martin Column / Outrage - 01/27/2011

Night on Fantasy Island

As a snapshot of the wildly dysfunctional state of our political union, last night’s festivities were a smashing success. All sides were serving up plenty of mom, apple pie and platitudes while ignoring what’s actually left on plates of millions of Americans –nothing.

I did find at least something to agree with in what each of the speakers said. Who can quarrel with President Obama when he calls on us to “win the future?” And I want my government as lean and mean as Paul Ryan and the Republicans do, without any wasteful subsidies that boost corporate tycoons and their overseas expansion rather than creating decent-paying jobs here at home.

It’s true that the tea party’s spokeswoman, Rep. Michele Bachman of Minnesota, looked like aliens had captured her brain and were speaking through her. Maybe we would have been better off if the aliens had captured Obama and Ryan too. At least Bachman briefly took note of the high unemployment rate before she went off to into her own rhetorical fantasyland.

That’s more than you can say for President Obama, who was pitching us his hallucination that his new pals from the Chamber of Commerce are going to beat their corporate profits into ploughshares in partnership with government, in an effort to foster new technologies and growth that we all share. Forgive me if I can’t get too worked up about this. Didn’t we try this government-corporate partnership recently? Wasn’t that what the bailout was?

Back here on Planet Earth, that didn’t work out so well for a lot of us, though it does seem to have worked well for the president’s friends at General Electric and JPMorgan Chase.

Both Ryan and Bachman aren’t interested in any partnerships; they want to dismantle government altogether so that GE, JPMorgan and the rest of the corporatariat can run the show without any interference at all. The only difference is that Bachman would like to do it faster, with less nice talk, than Ryan.

Neither the president, Ryan, or Bachman could focus on reality long enough to mention the long, steep decline of the middle class or the on-going foreclosure crisis, or offer any specific ideas on addressing those very real issues.

Back here on Planet Earth, we’re going to have to harness all of our ingenuity, strength and diversity just to wrestle our political system back from these leaders and their corporate backers before they plunder what’s left of it.

Congress / Financial Crisis / Foreclosures / Martin Column / Outrage / President Barack Obama - 01/26/2011

High Court's Low Opinion of Foreclosure Practices

Apparently the Massachusetts Supreme Court neglected to read the bipartisan memo reminding politicians and judges to refrain from doing anything that might upset the banks.

Most judges have shown extraordinary deference to bankers, even amid growing evidence that those bankers haven’t been following the law in pursuing foreclosures.

That may be beginning to change, in the wake of a Massachusetts ruling against banks in a closely watched foreclosure case.

Right now the decision only has force in Massachusetts. But as other cases challenging foreclosures make their way through the courts across the country, other judges are likely to be guided by it. In addition, the ruling will also provide guidance for lawyers posing legal challenges to other mortgages scrambled in the securitization process.

The Obama administration has consistently downplayed evidence of rampant fraud and sloppiness in the way banks split up, packaged and sold off mortgages to investors in the heat of the housing bubble.

Almost all subprime mortgages as well as millions of conventional mortgages originated before the meltdown were securitized and sold to investors. Securitized mortgages account for more than half of the $14.2 trillion in the total outstanding U.S. mortgage debt.

Bankers have tried to dismiss these problems with what’s known as the securitization process as a matter of mixed-up paperwork that can be straightened out.

But the highest level court to examine the issue thus far took the issue much more seriously. Last week the Massachusetts Supreme Court invalidated what had become a common practice – banks seeking to foreclose on properties without properly holding ownership of the promissory note and mortgage as part of the securitization. The court  focused heavily on the use of the power of sale contained in mortgages; the same power exists in the vast majority of California deeds of trust.

Ruling in a closely watched case, the high court rejected arguments by U.S. Bancorp and Wells Fargo & Co. that they didn’t have to prove their authority to foreclose. The banks had argued that evidence that they intended to transfer ownership was enough to establish their standing to foreclose.

The ruling makes dense but fascinating reading, with some passages coming through loud and clear even if you’re not steeped in real estate law.

The justices stressed they weren’t creating any new interpretation of law. “The legal principles and requirements we set forth are well established in our case law and our statutes,” wrote Justice Ralph D. Gants. “All that has changed is the (banks) apparent failure to abide by those principles and requirements in the rush to sell mortgage-backed securities.”

Banks have argued that their “pooling and servicing agreements” allowed them to transfer mortgages to securitized trusts “in blank” without specifying whom the new owner would be.

But the justices ruled in U.S. Bank v. Ibanez that the “foreclosing party must hold the mortgage at the time of the notice and sale in order accurately to identify itself as the present holder and in order to have the authority to foreclose under the power of sale...”

In a concurring opinion, Justice Robert Cordy wrote: “There is no dispute that the mortgagors (borrowers) had defaulted on their obligations.”

But that’s not the legal standard. “Before commencing such an action...the holder of an assigned mortgage needs to take care to ensure that his legal paperwork is in order,” Cordy stated.

The ruling could lead to an increase in complicated and expensive litigation, if those whose homes have already been foreclosed on sue to challenge the financial institutions’ authority to conduct the foreclosures. Investors may also sue, contending that the banks didn’t properly document the ownership trail on the mortgages contained in a particular investment pool.

Can banks go back in and straighten out their securitization mess? So far the banks are downplaying the significance of the ruling. But untangling the paperwork may not be so easy. Many of the entities that created the securitized pools have gone bankrupt or dissolved into other businesses. At the very least, it could pose a costly and complicated process for the bankers, one that would entail taking a hard look at the details of the deals that led to the country’s financial collapse.

Foreclosures / Martin Column - 01/11/2011