The Rules!

On October 25, 2010 By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business, White Collar Crime

Right now, all over America, there is a single perception. We, the people, live by one set of rules. The financial institutions of this nation live by another.

The one we live by requires that we obey the law and should we fail, there are many penalties which include fines, jail time and public disgrace.

The great investment firms live by laws that are flexible, that bend with circumstance and desire. When they commit crimes, the offenses are considered civil matters. When they are found liable in civil court, the amount of fines compared to their profits are laughably small. When they violate regulations, the violations are either ignored, minimized or papered over. And when finally they commit such acts as endanger the welfare of the nation and it people, even then the law is not applied to them and they receive money and not punishment.

And never, under any circumstances is the flow of their profits and in particular, their bonuses, to endangered at any time under any circumstances.

The nation is bleeding.

It bleeds every day.

It’s bleeding credibility.

It’s bleeding honor, morality and ethics.

To many in this society, these are all jokes, the subject of humor.

To the great financial houses, the flag means the convenient locale with the least regulations. They live here and obey the rules here only when it is convenient. They are Americans of convenience.

We have spawned a series of institutions in this country that exist to its financial and ethical detriment.

They do not build value. They take it.

They do not limit risk. They increase it.

Can this nation long survive with two standards?

I do not believe this nation can long survive, half held to rules and half not.

It will either become all of one or all of the other.

Which one?

James Pilant

White House Refuses To Act! Administration Will Not Call For Foreclosure Freeze!

On October 20, 2010 By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business, White Collar Crime2 Comments

What a shock! The White House siding with the banks! Who would have thought it? Well, me. I was shocked the President pocket vetoed the legislation that would have retroactively made the banks false affidavits a non problem, but I needn’t have worried this meant a change of policy.

The banks will be protected. Homeowners are not that big a deal, but banks, no matter what they’re doing (unethical, illegal, cruel, vicious, incompetent- those things), will be protected.

Well, the President figured he’d stand firm, conduct a cursory investigation, which would be kept well in hand, and it would all go away.

Wrong, the crisis keeps rolling and keeps getting bigger.

Now, listen up, this is not the fault of Rahm Emanuel, Larry Summers, the President’s Council of Economic Advisers, or the Fed. The President of the United States is making these decisions. There is only one guy in charge at the White House and unless they’re holding his family hostage, he is the architect of his own decisions.

The President once said, “My administration is the only thing between you and the pitchforks.” How about, “and the law, and justice and accountability?”

I think those ought to be in there too.

Well, the crisis continues. This is Jill Schlesinger from CBS’ Moneywatch –

Banks are against the moratorium because it could call into question larger documentation issues, which could in turn put the nation’s biggest financial institutions on the hook for breaches of representations and warranties made to buyers of mortgage-backed securities. If there were a breach, the buyers of the loans in question could “put back” the loans to the banks, forcing the banks to repurchase them for face value or to make the owner of the mortgage whole for the losses incurred. Some analysts have estimated the potential cost of putbacks to banks to be over $100 billion.

Let’s talk about this “putback” thing a little bit. Soon, you may hear about little else in the news!

You see the banks unloaded all these nasty securities packages on pensions funds, etc., selling them as if they were good values without disclosing their inherent flaws because the purchasers were “knowledgeable investors,” a legal status that is essentially a license for investment banks to lie to them. If the banks misrepresented these loans, the pension funds, etc. can demand their money back. What terrible thing could the bank have lied about that would get them in trouble? Well, they might have told the buyer that they owned the mortgages when they didn’t have the actual documents of ownership. Whoops! One hundred billion dollars! That a lot of money.

Remember that phrase, “putback.”

James Pilant

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

On October 6, 2010 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 October 6, 2010October 6, 2010 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

Let’s Have A Moratorium On Foreclosures!

On October 5, 2010October 5, 2010 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

Mortgage Companies Flout The Law – 56,000 Foreclosures Suspended

On October 1, 2010 By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business

When you file a foreclosure the law favors the bank. All the bank has to prove is that they have personal knowledge of the case. This eliminates the need for proving each individual mortgage.

So all they had to do to meet their legal requirements was to have someone review the file. Guess what? In their hurry to foreclose on as many homes as possible (tens of thousands), they just didn’t do it. Since they didn’t do it, there is no way to know how many homes they took wrongly, or if the amounts were right, etc.

This isn’t just sloppy work, it’s a case where these large companies, in particular, GMAC and Chase, violated the law by asserting that they had fulfilled their legal requirements when they had not. But to them that wasn’t important only that they close the cases by thousands a month. Can you conceive of anything more contemptuous of the law?

I’d been reading reports of homeowners who owned their homes outright being foreclosed on by these companies and having to hire attorneys to get it stopped. I just thought they fouled up here and there. No, they didn’t even try to do what they were supposed to do and as long as the courts accepted that they had “personal” knowledge, the machinery of foreclosure went on whatever the actual circumstances were.

If you want to know why people have been unable to renegotiate their mortgages, look no further. The bank suffered little or no expense from a high speed unwitnessed foreclosure. Renegotiation would have required work, personal knowledge and a concern for the customers. Those three things were not about to happen and I believe will not happen.

From the New York Times article –

The missteps stemmed from the affidavits the lenders file as they seek a quick or summary judgment in thousands of foreclosure cases. The affidavits state certain facts about the case, including the amount owed, which the signer indicates he has personal knowledge of. Without the affidavit, the lender would have to prove the facts at trial.

In depositions taken by lawyers for homeowners, executives at GMAC and Chase said they or their teams signed 10,000 or more affidavits and related documents a month. That did not give them time to review the cases.

Defense lawyers say the disclosures are symptomatic of the carelessness, if not outright fraud, that lenders have been exhibiting for years in their rush to file cases. Many necessary documents have disappeared, with defense lawyers saying the lenders often do not even have standing to foreclose.

Callousness, cruelty, pure injustice, contempt for the law, an apparent total complete lack of concern for the hundreds of thousands of mortgage holders – this is all here.

Now, the big question, are they going to be penalized? And I don’t mean that they have to do the mortgages over again, I mean contempt citations, I mean state’s attorney generals filing lawsuits to recover the sums illegally taken from homeowners, I mean a forced reconsideration, re analysis of every single mortgage, these blackhearted villains did.

You say, James, calm down, they just messed up on their procedure. No, they took thousands of people to court based on NO knowledge of the case. They didn’t know what the people owed, the history of the loans or, in fact, whether they owned the home or not!

And get a load of this – their attorneys signed on to it, put their names on it. Let’s see a little action there. Let’s see what the state bar associations think about this.

There’s a lot more to say and I want to get this up, so more later. People have to know.

James Pilant

Americans Believe Recession (Depression) Is Not Over

On September 28, 2010 By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business1 Comment

From a CNN story –

Seventy-four percent of Americans believe the economy is still in a recession, according to a new CNN/Opinion Research Corporation poll. Only 25 percent think the downturn is over.

One-third of Americans say the recession is serious, while another 29 percent characterize it as moderate.

Only the elite in the beltway believe the ridiculous idea that we have successfully come through the recession. I don’t understand how the numbers could add up to anything but a continuing crisis.

Unemployment – 9.6 percent – This doesn’t count those who have given up seeking work, so the real number is probably closer to 15.

Financial Markets – All Better? – NO – Federal Reserve Governor Kevin Warsh said on Tuesday that financial markets have not fully recovered after the financial crisis and that economic growth is currently weighted to government expansion.

Hiring – All better? – NO – U.S. chief executive officers’ view of the economy darkened in the third quarter, with top executives saying they were less willing to hire new workers as they fear sales growth will slow.

Consumer Confidence – Optimistic? – NO – When it comes to attitudes about the economy, Americans continue to see the glass as half empty, according to the latest reading on consumer morale. The Consumer Confidence Index fell to 48.5 in September — its lowest level in 7 months — and down from August’s negatively revised level of 53.2, the Conference Board, a New York-based research group that compiles the index, said Tuesday.

How long can I keep going? How long have you got?

The politicians and the commentators feel your pain from a safe distance. You’re just more economic data and an annoying one. If you would only believe, everything would be fine. Everybody is doing well. You just don’t see it because you can’t see the big picture obstructed as it is by your suffering. Don’t be pessimistic. Don’t you know that this is America and a good attitude can solve all your problems?

I get tired. You get up and you hear these criticisms of hard working Americans and the utter lack of comprehension of the beltway elites as to what the world is really like, and the next day it happens again. The cycle never ends. Americans are lazy, self-indulgent, and fat. They need to get tough, get smart and do what we, the real people, the people that count do. Learn from us, they say. These creatures who don’t live in a world of labor and pain, who live by manipulating money, shaping opinion, and other ill defined processes. They know how to fix your lives. Right, and I can build a nuclear weapon with a little barb wire and an old tire.

Well, tomorrow will be another day and the cycle will begin again.

James Pilant

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