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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Life by the numbers

In years past, I used to rest assured that I was in good shape, physically, economically and socially. That was before computers gave me the ability to know exactly how I'm doing. It used to be easier to pretend that one was in good health. Nowadays, hundreds of websites let you know about all of the diseases that threaten you, complete with many symptoms that undoubtedly match some of your symptoms. Of course there have always been books and magazines with medical information, but never before could you so easily pinpoint so many symptoms with a free Google search or a quick visit to the symptom-checker at Wrongdiagnosis.com. Economically, we used to put our money into some sort of mutual fund or other investment, and we considered that we were "married" to the account. Computers now give us the ability to track our financial health second by second. Computer-programmed trading also creates crazy jumps and plunges in the market. Ignorance was bliss, and many advisers argue that you should go back to finding a reasonable place to put your money, then ignoring it for long periods of time. Then there is one's social health. It used to be that I could assume that I had an indefinite (large) number of people with whom I had a friendship. That was before Outlook came along to tell me exactly who I did (and did not) know well enough to have a phone number or an email address. In Outlook, you'll get the exact number. Ooops. My social circle is not nearly as big as I'd like to believe. Perhaps you are thinking that Outlook is not the right place to look, and that one ought to look, instead, to Facebook. Thanks to the precision statistics offered by Facebook, we can see that the typical Facebook user has 190 friends. That's it? But what if I get in a bind or I get sick, and I need the help of a "friend." It seems like you could run through 190 "friends" all too quickly. It ultimately presents the same problem as Outlook. It gives you a finite number, and many of them are not really good friends, anyway, as much as I enjoy sharing information with them. A new article in The Atlantic, "Is Facebook Making Us Lonely," by Stephen Marche, should make us even more suspicious of the Facebook phenomenon (the article is in the May 2012 edition, not yet online). We learn (p. 66) that neurotics and lonely individuals spend greater amounts of time on Facebook per day than non-lonely people. He also writes that Facebook has become a place to pretend that one's life is better than it is, and that "believing that others have strong social networks can lead to feelings of depression." He also cites to research showing that "surrogates can never make up completely for the absence of the real thing . . . actual people in the flesh." He concludes that the idea that a website "could deliver a more friendly, inter-connected world is bogus." Further research shows that "the greater the proportion of face-to-face interactions, the less lonely you are . . . [and] The greater the proportion of online interactions, the lonelier you are." He adds that Facebook is not always a bad thing. Like many things, it is a tool that can be used or misused. "It's like a car. you can drive it to pick up your friends. Or you can drive alone." Then again, Facebook puts us into the business of competing with our "friends." "Facebook imprisons us in the business of self-presenting, and this, [according to author Jaron Lanier], is the site's crucial and fatally unacceptable downside." Facebook gratifies "the narcissistic individual's need to engage in self-promoting behavior." So think about this next time you smugly react to your "friend" count. Marche's article is far more nuanced than the above summary, and he would admit that there are many ways to use Facebook. I, for instance, use it to share article, including many articles from this website. I can't help but notice, though, that many people post on Facebook 8 times per day, and they would seem to fall into his description of those having a "narcissistic personality disorder." When you add up your Facebook "friends," then, to see how rich you are with "friends," you might want to set those narcissistic friends aside before counting. So this is life by the numbers, at least if you include this final number, which I take as a challenge, rather than a depressing fact (or use this alternate method of calculating your approximate number of remaining days). In sum, it appears that you will be happier (or at least you will think you are happier) if you get away from the computer and, instead, spend time with a good friend, face-to-face, talking about something other than your health, your investments, and you cyber social circle.

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The ability to engage in a culture jump started human animals

What gives human animals such an advantage over so many other animals? Culture is the answer according to Susan Okie at TruthDig, commenting on a new book by Mark Pagel:

About 45,000 years ago, members of our species, Homo sapiens, reached Europe after earlier migrations out of Africa via the Middle East. The newcomers’ arrival must have come as a shock to the Neanderthals, a separate human species who had inhabited Europe for some 300,000 years. As Pagel notes, the new arrivals “would have carried a baffling and frightening array of technologies”—not only new kinds of weapons and tools, but also perhaps sewn clothes, musical instruments and carved figures. “It would have been like a scene from a science fiction story of a people confronted by a superior alien race.” The aliens likely didn’t owe their advantages to dramatically superior genes, but to a development, some 40,000 years prior to their arrival in Europe. Something happened that had immensely speeded up their ability to learn, adapt and acquire new strategies for taking over the planet: Homo sapiens had acquired culture.

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The Fate of the Volker Rule

Bill Moyers opened a recent show featuring Paul Volker with the following:

Well here we go again. The old game of congressional creep. After months of haggling and debate, Congress finally passes reform legislation to fix a serious rupture in the body politic. The president signs it into law, but then we discover the fight’s just begun, because the special interests immediately set out to win back what they lost when the reform became law. They spread money like manure on the campaign trails of key members of Congress. They unleash hordes of lobbyists on Capitol Hill, cozy up to columnists and editorial writers, spend millions on lawyers who try to rewrite or water down the regulations required for enforcement. And before you know it, what once was an attempt at genuine reform creeps back towards business as usual.
Following this introduction, Moyers interviewed Mr. Volker, who discussed the Rule named after him:

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Motherhood and Politics

I don’t have a lot to say about this kerfluffle over the remarks of someone who, as it turns out, is not actually working for Obama regarding Ann Romney never having worked a day in her life.  This kind of hyperbole ought to be treated as it deserves—ignored. But we live in an age when the least thing can become a huge political Thing, so ignoring idiocy is not an option. I remember back in the 1990s a brief flap over Robert Reich.  I’m not certain but I believe it was Rush Limbaugh who started it by lampooning the Clinton Administration’s Secretary of Labor for “never having had a real job in his life.”  Meaning that he had gone from graduation into politics with no intervening time served as, at a guess, a fast-food cook or carwasher or checker at a WalMart.  Whatever might qualify as “real” or as a “job” in this formulation.  In any event, it was an absurd criticism that overlooked what had been a long career in law and as a teacher before Clinton appointed him.  It’s intent was to discredit him, of course, which was the intent of the comments aimed at Mrs. Romney by asserting that she has no idea what a working mother has to go through. A different formulation of the charge might carry more weight, but would garner less attention.   It is true being a mother has little to do with what we regard as “gainful employment” in this country: employees have laws which would prevent the kinds of hours worked (all of them, on call, every day including weekends and holidays) for the level of wages paid (none to speak of) mothers endure. Hilary Rosen raised a storm over remarks aimed at making Mrs. Romney appear out of touch with working mothers.  A more pointed criticism might be that Mrs. Romney does not have any experience like that of many women who must enter employment in order to support themselves and their families, that a woman who can afford nannies (whether she actually made use of any is beside the point—the fact is she had that option, which most women do not) can’t know what working mothers must go through. But that’s a nuanced critique and we aren’t used to that, apparently.  Soundbite, twitter tweets, that’s what people are used to, encapsulate your charge in a 144 characters or less, if we have to think about it more than thirty seconds, boredom takes over and the audience is lost. Unfortunately, the chief victims then are truth and reality. So the president gets dragged into it for damage control and the issue becomes a campaign issue. Which might not be such a bad thing.  We could stand to have a renewed conversation about all this, what with so many related issues being on the table, given the last year of legislation aimed at “modifying” women’s services and rights.  Whether they intended it this way or not, the GOP has become saddled with the appearance of waging culture wars against women, the most recent act being Governor Scott Walker of Wisconsin’s repeal of that state’s equal pay law.  Romney is the presumptive nominee for head of that party and one of the things he’s going to have to do if figure out where he stands on these matters and then try to convince the country that he and his party are not anti-woman. Yes, that’s hyperbolic, but not by much.  This is where the culture wars have brought us—one part of society trying to tell the other part what it ought to be doing and apparently prepared to enact legislation to force the issue.  Ms. Rosen’s remarks, ill-aimed as they were, point up a major policy problem facing the GOP and the country as a whole, which is the matter of inequality. That’s become a catch-all phrase these days, but that doesn’t mean it lacks importance.  The fact is that money and position pertain directly to questions of relevance in matters of representation.  Ann Romney becomes in this a symbol, which is an unfortunate but inevitable by-product of our politics, and it is legitimate to ask if she can speak to women’s concerns among those well below her level of available resource and degree of life experience. The problem with all politics, left, right, or center, is that in general it’s all too general.  Which is why Ms. Rosen’s remarks, no matter how well-intentioned or even statistically based on economic disparities, fail to hit the mark.  She can’t know Ann Romney’s life experience and how it has equipped her to empathize with other women.  Just as Ann Romney, viewing life through the lens of party politics, may be unable to empathize with women the GOP has been trying very hard to pretend are irrelevant. Like with Robert Reich’s critics, it all comes down to what you mean by “real” and “work.”  And that’s both personal and relative. Isn’t it?

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