Category: Capitalism

Banks Foreclosures In August The Highest Monthly Total EVER!

On By southwerkIn business ethics, Capitalism, Government Failure, Philosophy of Business, White Collar Crime2 Comments

From an article by William Alden –

August saw more Americans lose their homes to foreclosure than any other month on record, RealtyTrac reported today. Banks repossessed a total of 95,364 properties in August, a 25 percent increase from the same period in 2009 and a 2 percent increase over this May’s previous record. Foreclosure filings of all types, including default notices, scheduled auctions and bank repossessions (the three major stages of the foreclosure process), increased to 338,836 in the month, a 4 percent jump from July.

Can there be any better evidence of robo – signing (the practice of mortgage companies simply have attorneys sign off on mortgages as if they had examined the paperwork for accuracy and legality [like whether or not the bank actually owned the property]) than these enormous numbers of foreclosures?

Foreclosing on people’s homes without doing the most minimal required legal work is “highly unethical.” (I don’t really want to use that phrase, but children might be reading my blog.)

Robo signing is profitable. You can see from the numbers just how streamlined the process can be if you avoid following the law.

But isn’t that the current philosophy in the “real” world? Isn’t the money the only thing that matters? And who are these homeowners anyway, just a bunch of dead beats. Why should they have any rights? They signed the note, didn’t they?

Yeah, do you know what note they signed? The actual amount of what they owed? Whether or not the home was actually the property of the foreclosing bank? Whether or not they were even in default?

I guess I’m just a strange person. I think you shouldn’t take people’s home casually. I think it is a very serious matter. Perhaps I don’t live in the real world. Maybe I’m one of those utopian thinkers who have expectations all out of accord with reality.

Or maybe, just maybe, justice is still important in this nation.

James Pilant

Ohio Attorney General Sues GMAC Mortgage Division – Texas Attorney General Halts Foreclosures!

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business, White Collar Crime1 Comment

It has begun, there will be lawsuits filed across the country to punish the foreclosure industry for their violations of state laws. Can they stop these crimes? What is the Attorney General in our state going to do?

The Ohio Attorney General is filing suit and the Massachusetts Attorney General is considering doing the same.

From Huffington Post –

Attorney General Richard Cordray said Wednesday the alleged fraud could involve hundreds of foreclosures in the state. The lawsuit claims the company’s employees signed and filed false affidavits to mislead courts. Cordray called the alleged fraud the “tip of an iceberg of industrywide abuse of the foreclosure process.

The Texas Attorney General’s Office is halting foreclosures across the state – From CBS7 – West Texas –

The Texas Attorney General has called for a halt on all home foreclosures, this includes all sales of property that were previously foreclosed upon and all evictions of people living in previously foreclosed properties.

State Attorney General, Greg Abbott, has sent a letter to thirty loan service companies freezing foreclosures in the state as they begin an investigation into foreclosure practices in the state.

“Evicting someone out of their home is very serious, and it needs to be done in the proper manner,” said Western National Bank Financial Advisor Mickey Cargile.

Will there be any justice?

Stay with my blog, I’m not letting this subject go until we get to the end of it.

James Pilant

Homeowners Betrayed

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business, White Collar Crime2 Comments

I have been accused of being shrill. Today is the day, I should tear the wallpaper off the walls in hot raging anger. The Senate passed a bill on the last day of the session by unanimous consent that essentially solves the banks’ mortgage foreclosure problems.

Have a read – (from Reuters)

The bill, passed without public debate in a way that even surprised its main sponsor, Republican Representative Robert Aderholt, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.

The timing raised eyebrows, coming during a rising furor over improper affidavits and other filings in foreclosure actions by large mortgage processors such as GMAC, JPMorgan and Bank of America.

Questions about improper notarizations have figured prominently in challenges to the validity of these court documents, and led to widespread halts of foreclosure proceedings.

The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.

Do we live in a nation where citizens matter? Hundreds of thousands of mortgages have been done without actual knowledge of the facts. This is not legal. But here comes Congress just when the crisis is beginning to develop. And Congress like the cavalry rides not to rescue the homeowners but to make it difficult or impossible for them to challenge inaccurate or false documents. It will also make it difficult or impossible to sue for redress by these simple Americans who lived their lives believing falsely they had a government that was concerned in some way about their rights.

It’s not law yet. It awaits that “stalwart defender” of the public, Barack Obama, to sign or veto. What do you bet?

This is incredible. The mortgage companies are caught committing essentially fraud on a massive scale at the very least lying to the court system not once but hundreds of thousands of times(probably several million times) and the government acts to legalize their acts just as the scandal is revealed.

I don’t know what to say. I am well aware that besides this frail web site, I have no influence. I want to go outside and scream. Doesn’t someone, anyone care about the homeowners who have been abused hundreds of thousands of times?

What do these huge accumulations of money have to do to get in trouble? Apparently there is nothing they can’t do. Apparently there is no line they can cross, that will cause our government to act against them.

Will there be any action taken? Will there be any outrage? Will there be any investigations and will they lead to any actual action?

Stay tuned. I’m not finished with this yet.

James Pilant

Google Faces Inquiry Into Anti-Competitive Practices

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, monopoly, Philosophy of Business2 Comments

From “France 24 International News” –

The European Commission has launched a preliminary inquiry into anti-trust allegations against Google brought by three online companies over how the Internet giant’s search engine operates and the way it sells its digital advertising.

The Commission is acting on separate complaints from three companies – the British price comparison site Foundem, French legal search engine eJustice and Ciao! from Bing, a German online retailer that was bought by Microsoft in 2008. The three have alleged that Google’s search engine artificially demotes the results of competitor sites in its rankings and questioned some of the conditions the company includes in its deals with advertisers.

It is unlikely that Google is only doing this in Europe. “Don’t be evil” is Google’s motto but they seem to have reconsidered especially considering their all out assault on net neutrality.

We have anti-trust laws on the books. Couldn’t we use some of them? Perhaps, the European Union could let us cooperate with their investigation?

We as a society lose a lot when one company clobbers another though anti-competitive practices. We pay more but worse than that a monopoly company can diminish the quality of their product and customer service. In the long term, product development and innovation suffer. So remember, it’s not just the money.

James Pilant

Let’s Have A Moratorium On Foreclosures!

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business

That’s right. Until we have evidence that the banks intend to follow established procedure when foreclosing homes instead of the hopeful, magic of the “our people don’t make errors” world.

No one has the right to take people’s home based on supposition or simply trusting companies who have proven by their behavior that they have no interest in justice and fair dealing.

Let’s stop it and use the time to do an across the board re examination of those mortgages foreclosed without proper procedure. It is obvious that homes have been taken and money charged without legal justification.

That’s not how we do things in the United States of America!

We are a nation of honor, where fair dealing and good faith are enshrined in the law. That’s right, they are on the books. They are part of the common law tradition in this country. They are still used to decide cases. This is one where they apply.

I’m not the only one who thinks a moratorium is a good idea. – (from Reuters)

An influential U.S. senator on Tuesday raised the prospect of an industry-wide moratorium on foreclosures as he pressed three banks accused of improperly kicking borrowers out of their homes to outline steps they are taking to fix their procedures.

“It is simply inexcusable that proper oversight proceedings were not in place, especially when dealing with matters as monumental as the seizure of a family’s home,” Senator Robert Menendez wrote to the heads of JPMorgan Chase and Co, Bank of America Corp and Ally Financial Inc, formerly known as GMAC and 56.3 percent-owned by taxpayers.

“At least one credit rating agency, Fitch, states that it believes this problem is widespread among banks and servicers, which raises the question of whether other banks should impose a moratorium until this lack of oversight is corrected,” wrote Menendez, the head of a Senate subcommittee on housing.

It’s a good idea. It’s something that should be done in the name of simple justice.

Simple justice may not be the fashion in dealing with the “self correcting” mechanism of the free market. But it’s still something I believe in.

James Pilant

Robo-Signers – Not R2D2!

On By southwerkIn business ethics, Capitalism, ethics, Government Failure, Philosophy of Business4 Comments

In an article featured in ProPublica by Marian Wang, the phenomenon of signing foreclosure document without knowledge of the contents is discussed –

Last week, we noted that the discovery of “robo-signers” — employees who signed off on thousands of foreclosure documents without much, if any, knowledge of their accuracy — had caused Ally Financial’s GMAC mortgage unit to freeze foreclosures in 23 states where foreclosures require a court order.

You’d think that all banks using the practice would be humiliated and chastened by a practice that misinforms the court as to their actual knowledge of the mortgage documents. You would be wrong, big time wrong.

From further down in the article –

The Associated Press reported late Sunday that a Wells Fargo executive acknowledged in a May deposition that he had signed hundreds of foreclosure documents each week without verifying any information aside from the date. The company, nonetheless, told AP it had no plans to halt foreclosures and was confident of the documents’ accuracy. (As we’ve noted, other banks — including those that have chosen to halt foreclosures — have also expressed confidence in the accuracy of their documents and played down the likelihood of mistaken foreclosures, despite the flawed paperwork.)

See, Wells Fargo, knows its documents are correct without even looking at them. Now, that’s a crack staff! Errors are discovered in mortgage filings all the time but they don’t have any.

The site, Complaints Board, catalogs Wells Fargo mortgage complaints. ConsumerAffairs.com also lists Wells Fargo complaints. But don’t worry, they only verified the dates but all the rest needs no examination!

This is a pretty high level of arrogance particularly when the court is being presented unverified documents. They taught us in law school to be scared of judges. Wells Fargo is apparently unaware of this basic rule. Telling judges you have verified data you have not could get them in the fining and contempt citation mood not even mentioning that throwing the case out of court thing.

Let’s see what happens next. I’m betting they can’t keep the practice of robo-signing up.

James Pilant

Andrew On Mortgage Foreclosure Lies

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure, Philosophy of Business1 Comment

My friend, Andrew, once again displaying his usual knowledgeable approach adds to the discussion on my essay on the mortgage foreclosure crisis.

I live, and have a mortgage, in Georgia, which is a non-judicial foreclosure state. Here, the banks are required to register all mortgages in a computer system called MERS. I believe that stands for Mortgage Electronic Records Service or something along those lines. The bank has to input all information regarding all of its mortgages in Georgia into this system.

Whats scary is that if the MERS system sees a lapse in mortgage payments for an account, it can automatically initiate the foreclosure process. With Georgia being a non-judicial foreclosure state, its very hard to fight a foreclosure once it has begun.

Every now and then I hear about people here who make all of their payments on time, and the bank forgets to enter the payment information into MERS. MERS then initiates the foreclosure of the property, and the homeowners have to hire a lawyer to have the process stopped. Its scary to know that I can make all of my payments on time and do everything that I am suppose to, but if my account information happens to fall through the cracks due to a lack of diligence on the part of the bank, that I can be burned for it.

It is always good to have Andrew’s thoughts on a subject.

James Pilant

Just For Fun – Speaking of vintage ads… “(via Pharm Regulations)”

On By southwerkIn business ethics, Capitalism

I have one of those Sears catalogs from the 1890’s (it’s a sixties reprint) and I love reading the ads (like how much dynamite or laudanum costs). Well, apparently I’m not the only one who finds this kind of thing fun.

I am reblogging this web site a second time in a few days and I don’t usually do that. But this entry was so charming, I couldn’t resist.

The authors have posted three vintage ads from the past in all their glory. Look and envy (or despise) the uses of cocaine etc.

Speaking of vintage ads... After posting about the "vintage" cigarette ads (let's be real, they're not necessarily vintage, just older than I am…Hence my warped perception), I searched a bit more to find what other pharma-related campaigns I could find. Let's just say I opened Pandora's box. I knew that the drugs of yesteryear (more than 20 years ago) were under less regulation and obviously we had less scientific evidence about the side effects of these, but… I found … Read More

via

Chris MacDonald Comments On “No more tears? Think again. (via Pharm Regulations)”

On By southwerkIn business ethics, Capitalism

Major academic honcho, Chris MacDonald, calls attention to the background of my posting and right he is. I should have put more links and information into it. I’ll be more careful next time.

Here are his remarks –

Nice find (the Pharma Regulations blog). It’s worth following their link to the CNN story:
http://money.cnn.com/2010/09/20/news/companies/johnson_johnson_mounting_problems/index.htm
which in turn links to *this* CNN story…
http://money.cnn.com/2010/06/02/news/companies/mcneil_motrin_phantom_recall/index.htm
…which gives some hint of the reason for the recall (basically, there’s a problem with how the Motrin tablets dissolve).

It gives me great pleasure to be able to call attention to specific comments. The longer a piece is or the more significant the author (in the business or academic world), the more likely such a posting is.

James Pilant

Mortgage Foreclosure Lies

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure, Philosophy of Business4 Comments

Telling judges across dozens of states that documents are accurate and have been reviewed when you don’t know and haven’t done it, is just a pack of lies. Running thousands of foreclosures through the court system without enough staff to actually do the work isn’t just cost cutting it’s stealing from homeowners who do not owe the sums reported or are trying to prove fraud in the process. The banks essentially said, “Our documents show you are just wrong, suck it up.” All this when they had little or no assurance that the documents were correct.

In an article written by Arthur Delaney, he writes –

The paperwork scandal that has prompted several banks to halt evictions and review their foreclosure procedures is reminiscent of the predatory lending scheme that inflated the housing bubble.

“It’s the same process, falsifying documents to make them look acceptable to someone,” said Tom Domonoske, a lawyer and consumer advocate in Virginia. “They’re falsifying foreclosure documents so judges will look at them and say, ‘Here’s an affidavit. It’s signed.'”

Now, get a load of this – (further down in the article)

The bogus loans and bad foreclosure paperwork are both the result of Wall Street’s massive appetite for mortgages during the housing bubble, experts say, as banks repackaged mortgages as asset-backed securities and sold them to investors. As mortgages repeatedly changed hands, servicers in many instances lost track of who owned them. In states where foreclosures need a court’s approval, servicers now find themselves unable to prove they have a legal right to foreclose.

That’s right, they’ve been foreclosing on homes they weren’t sure they owned. (By the way, the sentence explaining that when they need a court’s approval, they don’t get to foreclose if they can’t prove ownership is nonsense. It is only when you contest ownership, usually with a lawyer, can you stop the process. There is no doubt in my mind that thousands of homes were foreclosed on, with no small profit to the bank, that the bank had no ownership rights to.)

What are we going to do? Banks have had a good reputation in the past with foreclosures. It was unpleasant for the bank and for the customer. They did their process and the home shifted possession. Because of this good reputation the law accepted the bank’s statement as to ownership and money amounts without demanding proof.

It would have cost a lot of money for banks to have to prove the facts in dozens of what were largely routine cases. So, the legal system streamlined the process. The bank’s paperwork was accepted as accurate as long as an attorney signed that he had personally reviewed the documents.

What have we learned? First, we can learn that the processes under which we gave financial institutions the benefit of the doubt have to be modified so that these institutions have to prove their case. Yes, it will make mortgages more expensive to forclose. Yes, it will make the process more complex and longer. But what choice do we have when the banks have deliberately and calculating lied for years in tens of thousands of cases? At what point do you stop giving them the benefit of the doubt?

Now.

They have proven that they cannot be trusted. Anyone who says otherwise is ignoring the hard, cold, unpleasant, unyielding facts.

James Pilant