Tag: mortgage

The mortgage crisis in a nutshell

| April 23, 2012 | 2 Replies
The mortgage crisis in a nutshell

I invite you to view a brand new 54-minute video (embedded below) titled “Mortgage Crisis in a Nutshell.” The presenter is John Campbell, a St. Louis attorney and educator. I work with John at the Simon Law Firm in St. Louis, Missouri. We gained much of our experience in this area of law by litigating numerous suits for mortgage fraud on behalf of homeowners, both individual suits and class actions. Also on behalf of homeowners, we’ve defended many unlawful detainer suits (attempts to evict homeowners). We’ve both become passionate about this work as a result of witnessing firsthand that many homeowners have been victimized by unscrupulous and unrepentant banks.

In this 53-minute video John presents the main aspects of the mortgage crisis that has devastated the U.S. housing market and the economy. Our goal is empower all who seek to better understand what went wrong with the American mortgage system. As you will see when you click on the above link, this video can be watched in chapters:

I. The Big Picture and its Many Parts (:55)
II. Banks Flood the Market with Subprime Mortgages (3:54)
III. Banks, Securitize their Mortgages (10:05)
IV. Banks Cry for a Bailout (13:57)
V. Wall Street Malfeasance (16:54)
VI. Foreclosures, Robo-Signing, Trustees and Conflicts of Interest (18:20)
VII. MERS (“Mortgage Electronic Registration System) (33:45)
VIII. The Mortgage System Used to Work (43:42)
IX. Credits and Further Readings (52:43)

We created this video because we were frustrated by the fact that it is difficult to find websites and other materials describing the modern mortgage system in terms that are accessible to both lawyers and non-lawyers. As a result, many of our friends and acquaintances (those outside of the mortgage law community) don’t understand the inter-relationships among subprime loans, ratings of mortgage-backed securities, MERS, the bailout and robo-signing.

The failure to understand these things is making it easy for the entities that caused this crisis to conduct business as usual. Because this system is so difficult to understand, too many people think the crisis was entirely caused by “irresponsible borrowers.” The result is that our national dialogue is obsessed with the alleged need for less regulation instead of discussing how to change the system to make sure this never again happens.

We’ve used simple terms and basic drawings in order to make an opaque system understandable. Though it is undoubtedly slanted toward our perspective as attorneys who represent homeowners, we’ve worked hard to keep it factual and fair-minded.

We ask only one thing in return for the link to this video. To the extent that you find it helpful to your understanding of the mortgage crisis, please consider forwarding this link to anyone else you know who would benefit from viewing it. Our aim is to spread this video widely through email, list serves, Facebook, Twitter, blogs, websites other social media.

We certainly invite comments, both at DI and at YouTube. If this video works for you (or if it doesn’t), please let us know. Thank you.

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Matt Taibbi reports from his front row seat at a foreclosure court trial docket

| November 11, 2010 | 3 Replies
Matt Taibbi reports from his front row seat at a foreclosure court trial docket

Matt Taibbi’s newest article should be required reading for anyone who wants to support the desires of banks to expeditiously foreclose on home loans. Taibbi showed up at a Florida foreclosure docket to give an insider’s view. You will be amazed at the conduct of the judge (it is described toward the end of Taibbi’s article). Here’s the link: Courts Helping Banks Screw Over Homeowners: Retired judges are rushing through complex cases to speed foreclosures in Florida.

Here’s an excerpt:

At worst, these ordinary homeowners were stupid or uninformed — while the banks that lent them the money are guilty of committing a baldfaced crime on a grand scale. These banks robbed investors and conned homeowners, blew themselves up chasing the fraud, then begged the taxpayers to bail them out. And bail them out we did: We ponied up billions to help Wells Fargo buy Wachovia, paid Bank of America to buy Merrill Lynch, and watched as the Fed opened up special facilities to buy up the assets in defective mortgage trusts at inflated prices. And after all that effort by the state to buy back these phony assets so the thieves could all stay in business and keep their bonuses, what did the banks do? They put their foot on the foreclosure gas pedal and stepped up the effort to kick people out of their homes as fast as possible, before the world caught on to how these loans were made in the first place.

. . .

When you meet people who are losing their homes in this foreclosure crisis, they almost all have the same look of deep shame and anguish. Nowhere else on the planet is it such a crime to be down on your luck, even if you were put there by some of the world’s richest banks, which continue to rake in record profits purely because they got a big fat handout from the government. That’s why one banker CEO after another keeps going on TV to explain that despite their own deceptive loans and fraudulent paperwork, the real problem is these deadbeat homeowners who won’t pay their fucking bills. And that’s why most people in this country are so ready to buy that explanation. Because in America, it’s far more shameful to owe money than it is to steal it.

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For consumers, it’s not the free market. It’s the Wild West.

| January 27, 2010 | 2 Replies
For consumers, it’s not the free market. It’s the Wild West.

Bob Sullivan is quickly becoming one of my heroes, based upon my reading of his new book: Stop Getting Ripped off: Why Consumers Get Screwed and How You Can Always Get a Fair Deal (2009). Bob also offers a blog called the Red Tape Chronicles, where he reports on numerous consumer issues. It’s well worth your while.

I recently mentioned Bob’s book on a post focused on America’s profound case of Innumeracy.

I’m a bit deeper into the book now, and I am highly impressed with Sullivan’s ability to write clearly and persuasively with regard to consumer issues. I am also impressed with his ability to give an evenhanded account of many consumer issues. He doesn’t deny that consumer greed has played a role in modern-day screwing of American consumers. On the other hand, consumer greed is only part of the story. The other big part of the story is that our federal agencies that we have had set up to serve as watchdogs for Americans, are doing a pathetic job. Consider the case of Bernie Madoff. The securities and exchange commission (SEC) was presented with overwhelming evidence that Madoff was running a Ponzi scheme way back in 1999. They did nothing about it. Sullivan as “if the SEC isn’t hunting down folks such as Madoff, do you really think it’s protecting you?”

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Law professor: Stiff the mortgage company

| November 28, 2009 | 1 Reply
Law professor:  Stiff the mortgage company

According to law professor Brent T. White, many of the home owners who currently owe more on their mortgage than the house is worth should stop paying their mortgages and walk away from their houses:

[F]ar more of the estimated 15 million U.S. homeowners who are underwater on their mortgages should stiff their lenders and take a hike. Doing so, he suggests, could save some of them hundreds of thousands of dollars that they “have no reasonable prospect of recouping” in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume, he says.

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Banks and Republicans are blocking short-sales of homes

| May 10, 2009 | 6 Replies
Banks and Republicans are blocking short-sales of homes

A middle-aged couple who bought a home in my neighborhood are in a terrible situation. They paid too much for their new house, which needed a lot of repairs, and they failed to aggressively work to sell their existing home. Therefore, they now have two houses.

They continue to live in their original home while their new house (two houses away from where I live) has been vacant for three years and it is falling apart. I’m not talking about chipped paint. There are huge holes in the roof that are causing the house to rot out.

Check out the garage roof too:

Image by Erich Vieth[/caption]

People who know a lot about rehabbing houses tell me that if this house and garage don’t get immediate attention, they will need to be completely torn down.

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How did the “free market” fail us?

| December 20, 2008 | 4 Replies
How did the “free market” fail us?

How did the “free market” fail us?  How about this?  It was a matter of dogma over evidence, a theme that connects the blots–the long string of massive failures caused by conservative Republicans over the past eight years. In an article called “White House Philosophy Stoked Mortgage Bonfire,” the NYT analyses the causes of the […]

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