by Jacob Davies
I don’t have much use for the Daily Caller generally, but you should read this. The banks ran their mortgage units like a 1999 dot-com: no paperwork, everyone runs around like chickens with their heads cut off, next week we’re all either millionaires or fired. But mortgage lending is a 30 year business.
Tomorrow, a bank — not your bank, but any bank — could evict you from your home. Even if you didn’t know the bank was foreclosing. Even if your mortgage is paid off. Even if you never had a mortgage to begin with. Even if the bank doesn’t hold a single piece of paper that you signed. And major banks not only know this fact, but have spent millions of dollars to defend it in court.
… Earlier this year, Goldman worked with Jane Doe, an elderly woman whose real name couldn’t be disclosed for legal reasons. She had just spent several weeks outside of her home state of Florida visiting relatives, and she was current on her mortgage payments, which she had been paying for the past 15 years. She even called up her bank during her trip to ask about the best way to send in her latest payment. The bank told her that it wasn’t allowed to discuss the mortgage with her because her husband was the property owner, not her. But the bank couldn’t discuss the mortgage with her husband, either. Why? Because he was dead. And he had been for five years. Confirming this fact would have taken mere minutes.
Instead, when Jane returned home, the locks to her house had been changed and all of the property inside the house was gone. She still hasn’t recovered that property, and the bank hasn’t even told her where it is. According to Goldman, the wrongful repossession was first admitted, and then, inexplicably, the bank actually changed its mind and tried to make the outrageous claim that the homeowners’ association was actually the entity which had ultimately decided to change the locks and empty the house.
Hey, this is America. If a bank wants to break into your house and steal all your possessions, that’s their right. Got a problem with that?
This was best highlighted by an event that generated plenty of late-night chuckles last fall, when Wells Fargo sued … Wells Fargo.
Wells Fargo wanted to foreclose on a condo unit which had multiple mortgages attached to it. Wells Fargo also owned one of those second mortgages. So Wells Fargo spent money to hire a law firm and file suit against the irresponsible lenders at Wells Fargo. Then, Wells Fargo spent money to hire a different law firm in an understandable effort to defend Wells Fargo from the vicious legal attack coming from Wells Fargo. The second law firm even prepared a legal statement for Wells Fargo which called into question the dubious claims being made by Wells Fargo. Sadly, Wells Fargo won the case, crushing the hopes of Wells Fargo.
We have given vast power and influence to banks that act like a gigantic, headless, blind worm thrashing around. They don’t even know what they’re rolling in or why they’re doing it. Their ostensible role in the mortgage market is to help people buy homes. Instead they blew up the housing market, in the process randomly dispensing money to some people in the form of windfall gains and stripping it from others in equity losses. Gorged on US mortgages and kept alive with transfusions from the US government, the worm keeps ripping its way through the country with false-document foreclosures.
The purpose of the US mortgage system is to provide financing for Americans to buy or build good-quality homes to live in and raise families in. It wasn’t designed to be a casino.
As Jane Doe makes her way through the bleeding-heart yard and the circumlocution office, I wonder, whither do her political avenues lead?
To Glenn Beck and the merry band of anti-Semitic hyenas he has assembled to create the John Birch/Skousen future. Will she wander down to a Tea Party social with a lawn chair and a rum caricature of the witch doctor in the White House?
Will she cast her vote for Rick Scott, thinking he’ll keep the government out of her Medicare and all to himself, by golly?
The above organizations funded by the worm, of course, on behalf of the worm.
If she wanders into the worm’s all-chewing maw looking for comfort, we’re all f#cked.
BTW, who watches “It’s a Wonderful Life” and roots for Mr. Potter, the crooked bank manager? Besides most of the Village elders, I mean.
The Banks have entirely abandoned their legal obligations, and soon Congress will do whatever is necessary to make fraud and forgery legal for them. There is no rule of law in America anymore. It’s not what you do, it’s who you are that determines whether theft is a crime or simply business as usual.
Guess who the evil empire is now?
I love the Wells Fargo v. Wells Fargo thing. Beautiful.
I blame ACORN.
Plus, they gave us the “Savings and Loan Crisis” of the 1980’s, as a fair warning. We should have heeded it…
There’s a lame duck session of Congress starting November 15th, that will undoubtedly legalize the illegal, and fix everything until next time. They’ll blow things up and flee Washington.
I can see it now, the Tea Party and Kos Kids will join in storming the Federal Reserve, or Bank of America.
YCMTSU
Bear in mind: firms which deal squarely and honestly, giving good service and making honest profits, do not get written about in the news. The rogue banks are indeed wrecking things and must be stopped from running away with the market. But let’s hope that they are an aberration, and not the New Normal.
Dude, it’s not an “aberration”, it was happening at Bank of America, Citi, Chase, and Wells Fargo.
And regional banks and other mortgage originators were churning out the garbage at proportionate paces. That’s why so many of them have been seized by the FDIC.
It was apparent several years ago that the New Normal was exactly this: massive fraud from the highest levels to the lowest in the banking industry, Congress and the media bought and paid-for, and the tab left on the Federal government. It’s not an aberration. That’s how things work these days.
The Bush administration led the way in demonstrating what the rich and powerful could get away with. Now we see the result.
who watches “It’s a Wonderful Life” and roots for Mr. Potter, the crooked bank manager?
Perhaps the people who elected him Vice-President of the United States twice.
Doc Science wondered a few threads back whether the rich and powerful could be made to suffer punishments equal to their misdeeds. And this article provides the answer, at least in part:
Things are particularly bad in states like Arizona because of a peculiarity of their respective state foreclosure laws. Banks don’t have to go to court to foreclose on a property in those states. Instead, they can simply show “proof” of rightful foreclosure to local officials, who then evict the homeowners. To fight back against fraud, the homeowners have to hire a lawyer—which many can’t afford to do—and win a lawsuit before the property is sold.
“A lot of this stuff gets by everyone,” said Kevin Harper of Harper Law PLC, which operates in Arizona. “State law says that if a bank makes a mistake when they foreclose and sell, they only have to pay for damages incurred by the rightful owners. And since so many homes are underwater, the banks often argue that the owners haven’t suffered any damage whatsoever. Even if there was rampant fraud, there really would be no way to stop it in Arizona.
As usual- breaking into a house and stealing your stuff gets the perp subject to the increasingly draconian penal system. Stealing the entire house though- that being the sort of crime the wealthy perpetrate upon the poor and middle class- that gets you… a house. And it’s made even easier by allowing the rich to claim the house without even a court proceeding, where the ‘useless eaters’ must go to court to maintain possession.
It’s almost as if the assumption behind the proceedings is that, similar to the Masai’s creed regarding cattle, the wealthy believe (and have written the laws) that they already own everything, and that actual legal possession of property by the non-wealthy is something of a distasteful technicality.
And regional banks and other mortgage originators were churning out the garbage at proportionate paces.
If you want to argue that point, then you must agree with the premise that the CRA truly was responsible for the mortgage crisis. Only about 25% of the sub-prime mortgages were originated by banks covered by the CRA. The majority were originated by the private networks set up to feed Wall Street. It’s not clear to me where all the true junk came from as far as origination goes.
BofA, Chase, Wells etc. were much smaller players in the mortgage game, primarily they were in HELOCs, until they bought the true originators: Countrywide(BofA), WaMu(Chase) Indymac etc.
Even Fannie and Freddie were minor players until 2007 when they became the last resort.
The bulk of the banks shut down by the FDIC are of the same ilk as the S&Ls in the ’80s. Most banks are basically real estate lenders, and that’s especially true of the smaller banks. Small business loans are invariably tied to the real estate owned by the individuals. The ones that crashed had a large concentration to homebuilders and land.
The bubble came from a machine set up by Wall Street to generate higher returns for their pension fund and other institutional investors. They asked for yield and they got it. For a while.
A casino might be an improvement at this point. I’m getting the impression now of a banking industry run like a fly-by-night driveway blacktopper who sprays used oil and runs.
Nothing in life is to be feared. It is only to be understood.