Putting mortgage trustees under the microscope

I’m going to offer several facts, then I’ll ask a few questions.

  • Many states allow foreclosures to occur entirely outside of the court system. In these “non-judicial” foreclosure states, a “trustee” is deemed to be a “neutral” party charged with the duty to make sure that the foreclosure process is fair.
  • Since 2008, U.S. banks have foreclosed on more than 10 million families. About half of these have been non-judicial foreclosures supervised by trustees. Trustees are appointed by the banks at the time homeowners take out their home loans. These trustees are strangers to the homeowners, but highly paid repeat-player legal advocates for the banks.
  • Many foreclosures occur despite the fact that homeowners are disputing whether the foreclosure should occur at all. In many of these cases, the homeowner claims that he or she has made all mortgage payments timely, indicating that the bank has lost or misallocated the payments. In significant numbers of these cases, the homeowner has offered written proof that he or she has made every mortgage payment on time. In other cases, the bank unjustifiably added charges to the bill (such as forced-place insurance, even though the home-owner already has insurance) and the homeowner refuses to pay these bogus charges. On other occasions, the bank has mangled the accounting, giving the homeowner no confidence that the bank has any idea of what is owed or what has been paid.
  • I have seen each of these situations in cases I’ve handled. Despite knowledge of each of these problems, the “neutral” trustee in each of these cases nonetheless proceeded with the foreclosure.
  • On occasions too numerous to count, homeowners facing unjustified foreclosures had turned for help and advice to these supposedly “neutral” trustees, calling them up and asking questions. In many of these cases, the trustees gave the customer terrible legal advice—advice that was helpful to the banks and harmful to the homeowners. In many cases, the trustees gave the homeowners no advice at all, indicating that the customers should simply pay the banks unwarranted late fees and back interest, or else lose their homes.
  • Many “trustees” are also law firms (consumer advocates refer to them as “foreclosure mills”), who in addition to falsely claiming that they are “neutral trustees,” also serve as attorneys in fact to the banks. [More . . . ]

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The Iraq war goes on

As Kathy Kelly explains, the Iraq War is not over:

Effects go on immeasurably and indefensibly. Effects of war continue for the 2.2 million people who’ve been displaced by bombing and chaos, whose livelihoods are irreparably destroyed, and who’ve become refugees in other countries, separated from loved ones and unlikely to ever reclaim the homes and communities from which they had to flee hastily. Within Iraq, an estimated 2.8 million internally displaced people live, according to Refugees International, “in constant fear, with limited access to shelter, food, and basic services.” The war hasn’t ended for people who are survivors of torture or for those who were following orders by becoming torturers. Nor has it ended for the multiple generations of U.S. taxpayers who will continue paying for a war which economists Linda Bilmes and Joseph Stiglitz have so far priced at $4 trillion. For Bradley Manning, whose brave empathy exposed criminal actions on the part of U.S. warlords complicit in torture, death squads and executions, the war most certainly isn’t over. He lives as an isolated war hero and whistleblower, facing decades or perhaps life in prison. The war may never end for veterans who harbor physical and emotional wounds that will last until they die.
-- Amy Goodman of Democracy Now also added up some of the costs of the Iraq adventure:
On the 10th anniversary of the U.S. invasion of Iraq, we look at a massive new report by a team of 30 economists, anthropologists, political scientists, legal experts and physicians about the Iraq War’s impact. "The Costs of War" report found the total number of people who have died from the Iraq War, including soldiers, militants, police, contractors, journalists, humanitarian workers and Iraqi civilians, has reached at least 189,000 people, including at least 123,000 civilians. Financially, the report estimates a cost to U.S. taxpayers of $2.2 trillion, a figure that could one day approach $4 trillion with the interest accrued on the borrowed money used to fund the war.

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The so-called news

It turns out, just like you might have expected, that the news is devoid of news.

"The Pew Research Center's annual "State of the Media" study was released Monday. One section of the report — which, when taken in its totality, makes for very gloomy reading — deals with changes in the television news landscape over the past five years. The study's authors found that, since 2007, CNN, Fox News and MSNBC have all cut back sharply on the amount of actual reporting found on their airwaves. Cheaper, more provocative debate or interview segments have largely filled the void."

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Business as usual at J.P. Morgan Chase

Nothing has changed for the better at J.P. Morgan Chase, as described by Matt Taibbi. It's clearly time to break up the big Wall Street banks.

If you can fight through the jargon, what this basically means is that Chase decided to go into the fiction business and invent a new way to value its crazy-ass derivative bets, using, among other things, a computerized model the company designed itself called "P&L predict" which subjectively calculated the value of the entire fund toward the end of every business day. If this all sounds familiar, it's because it's the same story we've heard over and over again in the financial-scandal era, from Enron to WorldCom to Lehman Brothers - when the going gets tough, and huge companies start to lose money, they change their own accounting methodologies to hide their screw-ups, passing the buck over and over again until the mess explodes into the public's lap. The difference is that Chase is a much bigger and more dangerous company to be engaging in this kind of behavior. An even scarier section of the report regards the reaction of the Office of the Comptroller of the Currency, or OCC, the primary government regulator of Chase. The report exposes two huge problems here. One, Chase consistently hid crucial information from the OCC, including the sort of massive increases in risk the OCC was created precisely to monitor. Two, even when the bank didn't hide stuff, the OCC was either too slow or too disinterested to take notice of potential problems.

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