I’m sorry you have to watch a commercial before it gets going, but it’s good of coverage. The local news station’s take on these is different from the national media. The beltway bloviators are usually out of touch with public sentiment.
James Pilant
I am immensely grateful to my readers. Writing 400 posts sounds like a lot of effort but knowing that there was an appreciation of my words whether or not you agreed made it a pleasure.
Thank you all!
James Pilant
Well, it has alliteration. I guess that’s better than a moratorium on foreclosures. It lacks rhythm.
Foreclosure Freeze is the phrase I’m hearing more and more in the news.
Words are the way we design our thoughts. Strangely enough, this simple change of title probably is a significant turning point in the debate.
It was probably easier to argue against a moratorium, all legal and unfriendly, than it it to argue against a freeze, all simple and temporary sounding.
I suspect whether you call it a moratorium or a freeze, it’s become an avalanche and it’s going to happen.
The White House is as usual about a mile behind public opinion. While every elected official who could walk, run or crawl has got themselves to a microphone to declare something must be done, the White House is trying to cut a deal with the villains. They look like fools. Forgive me, the look is not just a look. It is apparent that political wisdom is not a resident at the White House – apparently it’s not even allowed to visit.
Now, I want you to understand. I don’t attack the White House with any joy in my heart. I’m angry, very angry. I mean look at the situation. Nobody had any concern for the homeowner. The government provided the banks with 700 billion dollars and gave the homeowners a program so pathetic it has virtually no participants. The mortgage companies acted totally irresponsibly and illegally for at least two and probably the better part of three years. So, the President’s press secretary announce that a moratorium is unnecessary, we’re going to have the mortgage companies take a second look. Okay, what do they have to do, run kittens through a blender? sacrifice virgins to satan? What gets these guys in trouble? I promise you if I went to court and told the Judge I looked over the paperwork and I am ready to proceed and I’m not, hell is coming to breakfast. I would probably be found in contempt of court and my case thrown out. These guys didn’t lie about that just once but hundreds of thousands of times.
So, I wait for the President to punish the wrong doers and he negotiates with them. I’m sorry. I don’t get it.
James Pilant
Sonia Jaspal’s blogs have been reblogged by me on several occasions. Do not expect it to stop. The writing is good and commentary is timely.
This is the author’s “resume.”
I recommend that you add the site to your favorites and check every few days.
I have added this to my list of links. This doesn’t happen very often. This is my ninth link.
If you read my blog much, you know that Alain Sherter is one of my favorite writers. Well, he’s hitting one out of the ballpark this time. This is from his article on BNET. It’s called “Foreclosures: Did Wall Street Banks Conspire to Rob Homeowners?” Read! –
Are the financial firms alleged to have fraudulently repossessed people people’s homes more like the gang that couldn’t shoot straight or the mob? That question underlies the spreading foreclosure scandal, and how it is answered could affect any ensuing legal or legislative remedies to resolve the crisis.
Ohio Attorney General Richard Cordray is unequivocal in his assessment. In suing GMAC Mortgage and corporate parent Ally Financial in order to to block it from proceeding with any foreclosures in the state, he characterized the company as preying on vulnerable homeowners “through fraudulent and unfair and deceptive practices.”
Now take a look at the previous article – “Foreclosures: Help for Homeowners Means Hurt for Banks.”
The foreclosure crisis is morphing into a full-blown political crisis — and it’s about time. In Washington, lawmakers are urging the Obama administration to investigate whether financial institutions have broken the law in dealing with borrowers at risk of losing their homes. At the local level, legal officials are pressing lenders to cease foreclosures. …
Several things are happening here. First, the foreclosure epidemic, until recently mostly a subplot in the national economic drama, is now front-page news. Revelations that some of the nation’s biggest financial firms, including JPMorgan Chase (JPM), Bank of America (BAC) and Ally Financial, have “robo-signed” people’s homes away have seen to that. With midterms elections only weeks away, Congress has no choice but to sit up and take notice, if only to cover their backs.
Second, more and more homeowners face eviction. One in seven people with a mortgage is past due or in foreclosure, according to the Center for Responsible Lending, a consumer advocacy group. That’s up from one in eight in 2009 and one in 11 the previous year.
You should follow the links and read the whole articles. Better yet, check every few days to keep up with crisis, you can’t do any better that Sherter’s reporting.
James Pilant
You cannot accuse Professor MacDonald of not being timely.
This article is a very clever while straightforward analysis on what on the surface is a simple question but ethically has more arms than an octopus in circus sideshow.
Here is the ethical thought problem he poses –
So, a thought experiment: what if there were only one company qualified to do the rescue work, or only one company available locally? What should that company charge?
A few quick options:
1. They should charge whatever the market will bear, which would essentially amount to charging the most the Chilean government and/or the mining company involved are willing to pay.
2. They should charge nothing. They should be happy to be involved, and to charge anything would be to put a price on human lives, which is unacceptably exploitative.
3. They should charge just enough to cover their own costs — machinery, fuel, and maybe their own workers’ wages.
4. They should charge exactly the same to drill this hole as they would to drill any other hole of similar size, depth, and complexity. No more (that would be exploitative), and no less (that would be foolish).
Do you favour one of those four? On what grounds? Or can you suggest another principled answer?
Follow his columns, he writes regularly and if you follow the articles and pay a little attention, you will probably have the equivalent experience of an undergraduate class in business ethics!
James Pilant
My buddy Andrew adds his thought to my recent post, “Anectdotal Evidence Or Life In The Skycastle!”
While I agree that a more up to date central title system will help keep mistakes from happening, it is not the problem. The problem is with the banks and how they do business. Thats all there really is to it.
I also agree that we should help out as many people as we can with getting refinanced and keeping their homes. This should especially be done for the people who did fall victim to deceptive lending practices.
However, we must keep in mind that not EVERYBODY who defaults on their mortgage is a poor victim in this case. At the end of the day, these people signed the papers to a mortgage that they couldnt afford. Just because external influences say that its the right thing to do doesnt mean that it ACTUALLY is the right thing to do. When we excuse sheep-like behavior from citizens, then we end up with a population full of sheep. Would you want your son, or any family member for that matter, to make a major life choice based on what external sources say is best, or do you want him to figure out, on his own, what is best for him and go for it?
Dont get me wrong, I do sympathize with the people who honestly fell for deceptive lending practices and fraud. Those people had no way of knowing that they were about to be taken for a ride.
The problem is, like you said, the numbers arent out yet. There is no telling how many people were actually affected by the banks inability to do a simple task such as record keeping. It could be less than 1% or it could be 50%. Who knows at this point.
I believe the banks should have to own up to their mistakes. We can do this by mandating a moratorium on foreclosures until this mess can be sorted out. After everything is sorted out, if you deserve to have your house foreclosed on, then you lose your house. If not, then you get to keep it. Like I said before, this is not mutually exclusive from showing mercy towards those who did fall for these lending practices. Im all for helping them refinance into a more fair situation.
I borrowed my title from an article series on CBS Moneywatch. I can’t improve on it. It covers eloquently and briefly the situation.
Here’s the lead paragraphs from the article –
After three years of terrible news about the housing market, you’d think it couldn’t get much worse. But over the past week, a whole new can of awful has opened up. It turns out that the banks who lent money with reckless abandon during the real estate bubble were just as incompetent on the way down as they had been on the way up. Big lenders and mortgage servicers have been forced to acknowledge that, as they rushed to foreclose on hundreds of thousands of properties, they didn’t always check to make sure that they actually held the mortgages.
In one case, a Florida man who had paid cash for house was foreclosed upon for defaulting on a loan he never took out. In other cases, mortgage documents have been forged. So-called “robo-signers” have been churning out affidavits without checking to see if they are true. In response, foreclosures are all but frozen in 23 states, House Speaker Nancy Pelosi has called for a federal investigation, and attorneys general around the country are seeking to halt foreclosures. One major title insurer has announced it won’t insure homes foreclosed upon by J.P. Morgan Chase. That may sound like a technicality, but if the trend spreads, it could send the housing market into a tailspin.
CBS provides a slide show to give you a quick overview of the crisis. I recommend it.
Do not read the comments on the CBS web site! Trust me. Life is too short for that kind of reading.
The CBS report is a seven parter. If you are interested in how this came about and what is likely to happen, it is the best thing at the moment. I’m sure as time goes by, we’re going to get some better stuff because we’ll have more information, but CBS was first and it’s a good job.
James Pilant
“White House doubts need to stop all home foreclosures” reads the headline. David Axelrod spinning the story like a top explains… well, let’s just let him tell us – from Yahoo News –
A top White House adviser questioned the need Sunday for a blanket stoppage of all home foreclosures, even as pressure grows on the Obama administration to do something about mounting evidence that banks have used inaccurate documents to evict homeowners.
“It is a serious problem,” said David Axelrod, who contended that the flawed paperwork is hurting the nation’s housing market as well as lending institutions. But he added, “I’m not sure about a national moratorium because there are in fact valid foreclosures that probably should go forward” because their documents are accurate.
Axelrod said the administration is pressing lenders to accelerate their reviews of foreclosures to determine which ones have flawed documentation.
“It’s a serious problem.” he says. I get that. So, since the story broke in the middle of last week you are dismissing a moratorium based on virtually no real information? Unless you, kind reader, think a giant national crisis, has run its course and everything is out on the table in the seven days since the story broke. If you don’t, you are with me in the disbelief column. Apparently the White House can see into the future and knows that no information will come out meriting action. I don’t know whether Axelrod has the “sight.” Perhaps, the White House has the super deluxe, limited edition, one of kind, ultimate ouija board. I hear it’s got a presidential seal on it.
But don’t worry, the White House has a plan. Let me run that line past you again – Axelrod said the administration is pressing lenders to accelerate their reviews of foreclosures to determine which ones have flawed documentation That’s right. They are going to go to the guys who lied to the court system roughly one million plus times and ask them to check their numbers. The people who have profited billions of dollars by cutting out those inconvenient legal requirements are gonna’ fix everything.
Fool me once, shame on you. Fool me twice, shame on me. – Maybe someone should send that in to our President?
“Hey, Mr. President, a massive wrong has been done to the American people. Send out the Attorney General! Mobilize the federal government, your regulators, your advisers, every friend you can muster! Let justice fall from Heaven like rain!”
“Oh? You can’t do that, Mr. President? Wouldn’t be prudent? Might upset the financial markets? That justice thing overrated anyway? Oh, I’m sorry I didn’t understand the burdens of your office. I’m sorry to bother you. Thanks for the engraved napkin.”
Yeah, everything going just fine.
James Pilant
Pilant's Business Ethics Blog 
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