Category: Government Failure

Due Process

On By southwerkIn business ethics, Capitalism, ethics, Government Failure, Philosophy of Business

When someone takes your house, you have a right to be heard. Okay, not really. You’re just supposed to.

The courts have held to a presumption that the banks acted responsibly when they sought a foreclosure. This is because for decades the banks had acted as reliable, responsible members of the community. Only 23 states require a judicial proceeding to take someone’s home.

Unfortunately in those states, the hearing was the merest formality, because once again, there was a presumption in favor on the banks. The banks did not have to produce the documents and prove their case, they only had to provide an affidavit that they had looked at the documents and the facts were as stated.

The banks are no longer stable, reliable members of the community. I’m sure some still are. Nevertheless, piracy is more a correct synonym for modern financial practices than the word, banking.

No one who has watched the financial casino betting of the last decade can have the kind of trust in banks that used to be the norm.

It’s time to change the rules.

If you steal a car or shoplift a $4.95 toy from a store, you are entitled to due process. You have to be arraigned and told what the charges are. The state is required to produce evidence to convict in open court. The defendant is able to produce evidence of his own and call his own witnesses.

But a bank can take a half million dollar home based on the affidavit of former supermarket checker with no knowledge of the mortgage process at all (who didn’t look at the documents anyway). The bank does not have to provide supporting documents, and many judges are uninterested in hearing the problems of “dead beat” homeowner.

Now I recognize the difference between a criminal and a civil matter. However, that a criminal has far more rights than a law abiding homeowner should be a matter of concern.

It is time for banks to bring the documents to court. It is time for a full hearing of the homeowners claims.

No more “sworn” affidavits. Since the foreclosure industry has lied in these affidavits hundreds of thousands of times, I find them valueless.

Now, you might say, “James, just because these people lied on their affidavits doesn’t mean that we should change the system. After all most people who swear out an affidavit are telling the truth.”

I would say, “Okay, if you want to keep affidavits, you have to make them believable.”

You would respond, “How would we do that?”

“You jail or fine those who have filed false affidavits. Only then will the system have the necessary integrity.”

That’s what I want. Penalties for those that deliberate lie to the court for the financial gain of their employer and I want penalties for the banks that engaged in these practices.

Can you tell me that these companies had hundreds of thousands of these affidavits signed over two years and didn’t notice it? What definition of the word, affidavit, is a mystery to the attorneys of the banking industry?

As ridiculous as it may sound, I want justice.

James Pilant

Foreclosure Freeze (via Lesslie Giacobbi’s Blog)

On By southwerkIn business ethics, ethics, Government Failure

Few writers have mentioned the dangers of the title insurers deciding to sit this dispute out. She does. I’d pay attention if I were you, particularly if you are thinking of buying a house.

James Pilant

What’s going to happen with the foreclosure freeze and should I wait to buy? Gary P. Hi Gary, There are several things to consider, and here are just a few. Right now, with the freeze, there may be a little less inventory to choose from. Some experts have even thought that we’ll have a little upward blip in pricing because there will be fewer houses to choose from and fewer distress sales on the market. Most people think that if this fiasco takes … Read More

via Lesslie Giacobbi's Blog

Katherine Porter to Senate: No Non-Judicial Sales While System Is In Doubt (via Livinglies’s Weblog)

On By southwerkIn business ethics, Capitalism, ethics, Government Failure, Philosophy of Business

I found this site about foreclosures. It has case law and a great deal of useful information for those in foreclosure. I recommend you give it a look.
On the other hand, if you are an attorney, it’s a good place to start your hunt for the case law on this issue. And I promise you the case law is developing very rapidly in this area.
James Pilant

10.27.2010 KATHERINE PORTER SENATE testimony-102710-porter see also 10.27.10 OHIO AG ROBO AMICUS BRIEF ParmaForeclosureBrief Katherine Porter is a visiting law professor at Harvard. Her 2007 study was the seminal work on mortgage and foreclosure irregularities. She found that 40% of the notes had been "lost" or destroyed. The following is an excerpt from her testimony today before a Senate Committee. The entire transcript is in the link above. Du … Read More

via Livinglies's Weblog

Reality Takes A Hike!!

On By southwerkIn business ethics, ethics, Government Failure

From MSNBC Business – Real Estate –

On Wednesday, Phyllis Caldwell, chief of the Treasury Department’s homeownership preservation office, told a financial bailout watchdog panel that there was no evidence of risk to the financial system from the documents scandal — or from efforts by mortgage investors to force banks to buy back problem loans.

Okay, let’s take a deep breath.

Now, where do we start? The amount of self delusion necessary if she actually believed this is staggering. If she doesn’t believe it, she must believe that we are grotesquely stupid and amenable to the most childish stupidity.

Put me in her position and ask my opinion. It will run like this –

“Oh, my God, oh, my God, in six months we are going to have to pay out several hundred billion dollars to shore up the banking industry, the housing crisis will be extended by three to four years and there’s going to be a legal battle over bank buybacks of improper securities that should last roughly a decade.”

Oh, and I will probably add, “Thank the Lord, I’m admitting how serious the situation is, because I’d sure look like a fool if I told everyone there was no problem! After that, I wouldn’t have any credibility at all.”

It’s hard to add to this. I could throw numbers running down the page for quite a distance about the huge amounts of money and the incredible number of mortgages affected by the crisis. But you can read, if you’ve paying any attention, you already know the numbers are huge.

So, I’ll let what I say stand without throwing the numbers at you. After all, I’ve probably got 15 to 20 posts where I talk about the numbers in detail.

I tell you guys. I just don’t get it. I graduated from Oklahoma’s Northeastern State University, got my law degree at the University of Tulsa College of Law. This woman has a BA, sociology and urban planning, and MBA, University of Maryland. Why is her thinking so different from mine?

Well, she’s got something I haven’t got, twenty years in the banking industry, most of it at Bank of America.

That would be the same bank that resumed foreclosures after deciding it didn’t have a problem? It would.

I guess I might not see a problem there either, if I only just had her “experience.”

James Pilant

More Evidence That Foreclosures Were Done Incorrectly – 55,000 Times!

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

Remember everybody including the White House says there is no systematic problem with the mortgage industry. Wells Fargo is apparently not cooperating with the narrative

From MSNBC Real Estate –

Wells Fargo admitted Wednesday it made mistakes in the paperwork for thousands of foreclosure cases and promised to fix them.

The San Francisco-based bank said it plans to refile documents in 55,000 of the cases by mid-November. The company said not all those cases included errors but didn’t say how many thousands did.

Wells Fargo described the mistakes as technical and said it has no plans to halt the foreclosure process, though filing new paperwork will cause some delays.

“We don’t believe that there are instances in which the foreclosures would not have occurred otherwise,” said Teri Schrettenbrunner, a Wells Fargo spokeswoman. The documents are being refiled in the 23 states where a judge’s approval is needed to complete a foreclosure.

I guess there isn’t any real problem. Oh! and they think so too – (from further down in the article) –

On a conference call with investors this month, Stumpf said the bank is “confident that our practices, procedures and documentation” are accurate.

Well, that’s reassuring. Except for those, well, 55,000 mistakes, they’re accurate.

I teach. By their standards, not only did all my students pass with A’s, they passed and got full credit for all the classes meeting nearby. They may have passed courses in other dimensions and forms of reality.

I hate to tell them this, but 55,000 mistakes is a lot of mistakes! Further, it doesn’t make claims that A) “We don’t believe that there are instances in which the foreclosures would not have occurred otherwise,” and B) “the bank is confident that our practices, procedures and documentation are accurate,” sound very convincing.

It’s kind of like a married man being caught with another woman. He didn’t really cheat except for those 55,000 times. Both he and Wells Fargo want you to know that it isn’t that big a deal.

James Pilant

President Clueless!

On By southwerkIn business ethics, Capitalism, ethics, Government Failure, Philosophy of Business, White Collar Crime6 Comments

The mortgage industry lies and cheats for two years and the President conveys his concerns.

He is worried about deadbeat homeowners.

I have to point out no matter how deadbeat a homeowner, he didn’t deliberately create a half million false affidavits. No matter how far behind in payments a homeowner might be, he didn’t foreclose on a property he didn’t own.

But the President isn’t worried about violations of the law, he’s worried that some homeowner will get aid he doesn’t deserve. That explains the byzantine labyrinth of paperwork required for the federal program, HAMP, (and why it doesn’t work).

Here’s the President –

“The biggest challenge is how do you make sure that you are helping those who really deserve help and if they get some temporary help can get back on their feet, make their payments and move forward and stay in their home versus either people who are speculators, own second homes that they really couldn’t afford because they’d gotten a subprime loan, and people who through no fault of their own just can’t afford their house anymore because of the change in housing values or their incomes don’t support it,” Obama said during a roundtable discussion with a handful of progressive bloggers at the White House.

“And we’re always trying to find that sweet spot to use as much of the money that we have available to us to help those who can be helped, without wasting that money on folks who don’t deserve help,” he continued. “And that’s a tough balance to strike.”

“The sweet spot,” Wow, do you get the impression that the only people allowed anywhere near him are bankers telling stories of deadbeat homeowners. I assume after they finish their litany about “personal responsibility, they then tell him how sad it is that the American people don’t appreciate his efforts.

I have been directly criticized for having the category, incredible stupidity, as one of my topics for search engines to pick up. It’s shrill. What else is appropriate here? Damn right it’s shrill.

I haven’t the slightest objection to being tough of wrongdoing on the part of the mortgage holders. But, good grief, the banks and foreclosure industry have been gaming the legal system, and refusing to act in good faith. Doesn’t he notice? Is he obligated by his Presidential oath to only worry about wrongdoing by non-banking entities?

Couldn’t he generate an unkind word for robo-affidavits? Just one unkind word?

He couldn’t even manage that.

Is the President right and fifty states’ Attorney Generals wrong?

Well, let’s look at the problem from a different angle – from CBS news –

Now there’s more evidence of just how blatantly the paperwork for that flood of foreclosures has been mishandled. Consider this: a stack of legal documents used to seize homes that don’t even identify the lender claiming to hold the mortgage.

Instead the words “bogus assignee” fill the space where the lender’s name should be. In foreclosure after foreclosure, the lender’s address is listed only as x’s, such as xxxxxxx. In some cases the documents identify the lender as “bad bene.”

“They have foreclosed in the name of ‘bad bene,’ for bad beneficiary,” says attorney Robert Hager.

Hager, who represents homeowners fighting foreclosure, says the paperwork also appears to bear bogus signatures.

“This is how arrogant they are with regard to taking homes,” he says.

How arrogant, indeed.

They might be less arrogant if held accountable.

James Pilant

Drumroll: Bank of America reviews several hundred foreclosure cases and finds…. (via Rortybomb)

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

Further evidence is coming in that the banks’ and the Obama Administration’s assurances of no systematic abuse in the foreclosure process are just nonsense.

Here’s some more evidence.

By the way, the web site Rortybomb seems to really have their stuff together. If I were you I’d give it a regular look.

James Pilant

Drumroll: Bank of America reviews several hundred foreclosure cases and finds.... Uh-oh: The Charlotte, N.C., lender [Bank of America] discovered errors in 10 to 25 out of the first several hundred foreclosure cases it examined starting last Monday. The problems included improper paperwork, lack of signatures and missing files, said people familiar with the results. In certain cases, information about the property and payment history didn't match…. Some of the defects seem relatively minor, according to the bank, and bank of … Read More

via Rortybomb

“We Can Either Have a Rational Resolution to the Foreclosure Crisis or We Can Preserve the Capital Structure of the Banks. We Can’t Do Both” (via Foreclosureblues)

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

Foreclosureblues is a web site devoting to defending homeowners. I like this web site. This is a fighting web site filled with a desire for justice and fair dealing. Here is there take on today’s congressional hearings.

James Pilant

"We Can Either Have a Rational Resolution to the Foreclosure Crisis or We Can Preserve the Capital Structure of the Banks. We Can't Do Both" "We Can Either Have a Rational Resolution to the Foreclosure Crisis or We Can Preserve the Capital Structure of the Banks. We Can't Do Both" Today, October 27, 2010, 35 minutes ago | noreply@blogger.com (George Washington)   The quote of the day comes from Damon Silvers, a member of the independent Congressional Oversight Panel: We are faced with a choice here. We can either have a rational resolution to the foreclosure crisis or we can pres … Read More

via Foreclosureblues

Banks Muscle Up For Fight With States’ Attorney Generals!

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

Bank of America is loading up big guns for the coming battle over its mortgage practices. It has picked up former Virginia Attorney General Richard Cullen and Brian Boyle, formerly of the Justice Department.

From the Reuters article –

Richard Cullen, chairman of the McGuireWoods law firm and Virginia attorney general from 1997-1998, is one of the lawyers representing the nation’s largest mortgage servicer. Cullen has already been communicating with the offices of various state attorneys general, according to a source familiar with the investigation.

Here’s more from further down in the same article –

Cullen served on President George W. Bush’s legal team during the Florida vote recount after the 2000 presidential election. He also represented Republican Tom DeLay in a recent federal probe that did not result in any charges being filed against the former U.S. House of Representatives majority leader.

Through a spokesman Cullen declined to comment on Bank of America. The company also did not answer questions on Wednesday.

Bank of America has also turned to a former top Justice Department lawyer in the George W. Bush administration to represent it in dealings with state attorneys general.

Brian Boyle, formerly principal deputy assistant U.S. attorney general, participated in a conference call between the bank and representatives from the Florida attorney general’s office, a spokeswoman for the office said.

It’s a pity that the Americans who were the victims of these practices will have to fight without picking up this kind of firepower.

But there is such a thing as justice and if these practices are as nefarious as they appear to me.

Justice will come.

James Pilant

Andrew Responds To The Post – The Vast Majority Of Foreclosures Were Done Correctly?

On By southwerkIn business ethics, ethics, Government Failure

My post, The Vast Majority of Foreclosures were done Correctly?, received several responses.

As always, Andrew provides an excellent thoughtful addition to the discussion.

In my personal opinion, the number of botched foreclosures is not the issue. The issue is that it has happened beyond the scope of being a rare isolated incident.

In one of my sophomore level engineering classes, called Mechanics of Deformable Bodies, our final exam was to select the proper materials and geometries for each member of a standard, run of the mill, truss bridge. Each member was to be designed with a given safety factor in mind to protect against cyclic fatigue of the truss members.

I was about 3/4th of the way finished with my exam when one of my classmates got up, and turned in his exam. The professor had the proper design right in front of him. He quickly compared my classmates design with the proper design, and then told my classmate that he received an F on the exam. When my classmate challenged this, my professor pointed to one of the truss members and said “Your bridge will fail, you get an F.”

My classmate raised his voice in protest. He said,”Professor, I messed up on TWO truss members! TWO out of 24! I shouldn’t get an F for that!”

By this time, the whole class had stopped working on their exams and were all staring at the student and the professor. I will never forget what the professor told my classmate. He looked at the boy and said, “Tell that to the people who were on your bridge when it failed.”