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Too Pig to Jail? Ban Foreclosures Now
SAN FRANCISCO -- What would happen to you if you got caught forging a mortgage application? You'd go to jail. And rightly so.
In one case in Florida, an employee of GMAC Mortgage admitted under oath that he personally forged 10,000 foreclosure affidavits. This low-level schlub is the tip of the tip of a massive iceberg, one of countless "robo-signers" whom voracious banks including GMAC, Bank of America, Citibank and JPMorganChase hired in order to kick American families out of their homes as quickly as possible.
Ignoring state banking laws, which require bank officers to review each foreclosure document to make sure all the facts are correct, banks instead hired low-wage "Burger King kids," as B of A execs called them, to sign thousands of foreclosures they never looked at. Many were signed under someone else's name.
Hundreds of thousands of foreclosures--maybe millions--were processed illegally by these huge banks gone wild. "Behind the question of improper foreclosure documentation lies a more important issue of whether lenders even have legal standing to foreclose because they lack the original mortgage note as required by law," reports The New York Times.
One guy got evicted from his house in Florida despite the fact that his mortgage had been completely paid off years earlier. Thousands of people who purchased illegally foreclosed properties may not have legal title.
Prosecutors in Ohio, Florida and at least 20 other states are investigating one of the biggest acts of wholesale fraud in the history of American business.
When the scandal broke on October 8th the banks declared a temporary moratorium on foreclosures. Two weeks later, they declared the whole fuss a simple matter of paperwork and resumed their happy work of reducing millions of jobless Americans to homelessness.
"There is not a single case where a foreclosure was made in error," said Bank of America spokesman Dan Frahm (if that's his real name). "The facts supporting the foreclosures are correct."
Bank of America plans to evict 102,000 families next month alone.
Adam Levitin, an associate law professor at Georgetown University, expressed doubt that the same banks that effectively rejected 99 percent of loan-modification applications by intentionally "losing" paperwork had suddenly become efficient. "The banks have dragged their feet and taken forever to do loan modifications, yet within less than two weeks they have managed to review hundreds of thousands of foreclosure cases," he said. "It is simply not credible."
"These are banks going to court and committing fraud," said Ira Rheingold of the National Association of Consumer Advocates. "For them to say this is a minor technical problem is mind-boggling."
Meanwhile, Florida officials are looking into charges that Fannie Mae and Freddie Mac foreclosed on 70,000 homes in the state during 2009 using forged court documents.
Enough is enough.
It is time to stop foreclosures.
Not for a few weeks. Not temporarily.
Forever.
Foreclosure has always been terrible for America. It's bad enough to fall on hard times, whether it's due to a medical catastrophe or a job loss. Getting kicked out of your house forces you to couch-surf or camp outside, struggling to survive day to day. This makes it even harder to get back on your feet.
Foreclosures penalize spouses and innocent children. And, as studies have shown, shuttered houses reduce property values in the surrounding neighborhood.
At this writing millions of American families are in default on their mortgages. It's only going to get worse. The real unemployment rate is over 20 percent and rising. The global economy is still tanking. And the Obama Administration hasn't even bothered to propose a single jobs program. If this keeps up, we'll all be living outside while our empty former homes fall apart.
Flint, Michigan: America's glorious future?
It's not as though banks don't have other ways to induce people to meet their monthly nut. If you default, they can trash your credit rating. Good luck getting another mortgage later.
Even if you don't care about common decency or social stability, consider the cause of justice: The banks are criminal enterprises. Their executives are gangsters who think nothing of charging 40 percent interest on credit cards and lines of credit.
The banks don't deserve to get "their" houses back through foreclosure. (We don't even know if they're "their" houses.)
Don't look to Obama or the Democrats for help. They work for the banks. We need neighborhoods to form mutual-defense organizations. When a family gets evicted, everyone should help them move their stuff back in and guard the house to keep out the fraud-happy banksters and their rent-a-cops.
What of the banks? These corporate maniacs should be treated as harshly as the individuals they pretend to be for the purpose of buying campaign ads. What they've done is the equivalent of robbing a million convenience stores.
Lock them in prison. Throw away the key. And seize their property. Shut them down. Or, if they're "too big to fail," rescue them--through nationalization.
A nationalized bank might still do evil things. But their profits would belong to us--not corporate criminals.
- Posted in
80 Comments so far
Show AllI can imagine four ways to crack down on the banks. First, try to get a class action suit established for each bank. Second, if the courts will not go for that, contest every foreclosure in court, which would delay things for years.
That approach would not bring criminal charges agains the banks and bankers, but it would present them with the prosepect of tens of billions in liabilities. Of course, if they settled the cases, they would be opening themselves up to lawsuits from the suckers who bought the toxic junk securities, which would also make them liable for tens of billions in liabilties.
The third approach, if the Justice Department has the cojones to do it, would be to let the FBI treat the situation the way it does when it deals with gangsters. Start with the guys who actually signed the documents under false pretenses. Lean on them to find out who authorized them to sign fraudulent documents, and go after them. Lean on them to find out which of their superiors told them to "do the dirty." And so on. The guys at the bottom may only face a year or two in jail, but that should be enough to get them to name names. And as you move up the ladder, the potential jail time increases. If somewhere in the chain they find a "stand-up guy" (not likely), prosecute him, and start over.
Less likely is the fourth approach, namely the option of filing criminal charges against the bank itself. In such a case, the bank will settle for any amount of money, because a conviction would put it out of business.
Very sound thinking, sheepherder.
Now all that has to happen is that your suggestions be taken and acted on by all of those who are in a position to do so, including the hapless mortgagees. Maybe you could spend the rest of your life organizing, ... 24/7.
I rarely use the word and concept of SIN. But SIN it is for what so many of these rotten, morally bankrupt leaders and lackeys have done and are doing.
And concerning our President, our leader, I have come to believe that he is either the epitome of the charming, intelligent, ambitious psychopath; a total coward; a common-sense stupid; or somewhere along the line, maybe when he was getting a physical examination, a chip was placed in him, and he is a true Manchurian candidate/president and like the trained killer in "The Bourne Conspiracy" [Matt Damon], acting out someone other than himself and taking orders from elsewhere OR he is just a really rotten person with a great facade and we were snukkered big time.
I'd say "Have a nice day," but if you're like so many of us the weight of this ugliness unfolding gets to you many times in a day.
peace, cm
Last week I read an Associated Press article about the how the too big to fail banks hired unqualified employees to process foreclosures who were either the same unqualified employees (or in some cases less qualified people) who originated the toxic mortgages. The article cited attornies' depositions wherein the bank employees stated that they knew absolutely nothing about mortgages let alone foreclosures.
At the time Dubya and Obama bailed out these banks in 2008 and 2009 it was common knowledge that bank employees who originated most toxic mortgages were unqualified.
Despite this knowledge none of the bailout conditions addressed this issue and the recent Dodd-Frank Bill fails to address it.
Any logical person would conclude that the White House and Congress have not only done nothing to control the banksters, they have assured the banksters thattheir license to steal will have no expiration date.
Not only did they know nothing about mortgages, but because of a clause in the law, they were given the title "Vice-President," of the bank,even though they worked for some contract company, not the bank.
During the 2005-2007 housing boom, many of these mortgage originators (most of whom had no skills to perform any legitimate job)were telling reporters how they were making $75,000 to $80,000 PER MONTH in commissions.
Although nobody winked an eye at that travesty, now politicians, the media, and "concerned citizens" are chastising public employees, few of whom make more than $75,000 PER YEAR (most make far less).
this is corn cricket behaviour. when these insects are young and green they are perfect team players. later in their life when they are adult and fat they become violet in colour and turn out as cannibals until the whole population is extinct.
how long are people waiting for changes to happen? ...which will certainly not be for the better.
we need to change the system not to patch one of many symptoms.
The bankster pigs are now adding fuel to the fire!
According to the link below, they have been setting up front companies and buying "tax liens" from cities and towns and then foreclosing on homes within a six month period after slapping major interest increases on the debt along with outrageous legal fees.
It just keeps getting worse every day! http://theeconomiccollapseblog.com/archives/the-big-wall-street-banks-have-found-a-new-way-to-strangle-the-american-people-predatory-property-tax-collection. What next?
These suggestions would work if the judicial and executive branches of government weren't already owned and operated by the banks. As it is, file all the suits you want; they'll still evict you while waiting for a trial date.
And bring the FBI all the evidence you want, they still won't investigate, any more than they investigated 9/11.
If the government wasn't in on it, the banks couldn't do it. They're just different divisions in the same company.
Absolutely !
I read another Associated Press article last week that indicated that anybody who purchased a foreclosed property had better consult an attorney to assure that they have clear title since a flawed foreclosure process could invalidate their title.
The article noted that just because the purchaser obtained title insurance is no guarantee.
Anybody who has ever had to deal with title problems quickly realizes that title companies' mission is to protect lenders, not purchasers.
Considering these "guys at the bottom" committed apparently one felony a minute every working day for months on end, I would say that they likely would be looking at life imprisonment unless they made a deal with the prosecutors for immunity in exchange for testimony against those next up the chain.
Keep in mind, each signature stating on a legal document that they were familiar with its contents is a separate count of Perjury. 10,000 counts in one month, assuming just a 10 day sentence for each, is still 100,000 days or 273+ years.
Thanks, Mr. Rall.
Most sensible thing on CD for months.
Banks that foul up their documents and foreclose on houses without the legal right to do so should be liable in damages.
That said, to prevent banks from foreclosing on defaulted loans is, basically, to prevent banks from making loans secured by enforceable mortgages, which would effectively shut most Americans out of the housing market. Most of us don't have sufficient money to buy a house without borrowing 80% or more of the purchase price and don't have enough credit to borrow that amount on an unsecured basis.
You could say, well, that's great, the prices will come down precipitously. What that would engineer is a massive wealth transfer from the old and near-retirement to the young, leaving the country with having to find a way to protect the old from destitution since their houses are usually their most important asset. Not a good solution to anything.
The idea of a vigilante group of neighbors chaining standing with pitchforks or whatever to prevent foreclosure seems a bit medieval and is hardly a solution.
"Banks that foul up their documents and foreclose on houses without the legal right to do so should be liable in damages."
No. When you take something without the legal right to do so--if you're a person--you go to prison and pay restitution.
Corporations want all the rights of humans and none of the responsibilities. If there will be entities who hold property without paying for it, it should be the one party we know has that right: the occupant/owner.
The banks should be dissolved and their assets seized. Fair is fair.
Otherwise, why obey any laws?
Hm?
All the banks did was facilitate the transfer of the home from one person to another - and made a fortune in the process, all fraudulently as it turns out. Banks have no more claim to those properties than the people living in them do.
The only thing that would "prevent banks from making loans secured by enforceable mortgages" is their own fraudulent and illegal behavior, behavior that just about destroyed the country. The banks wrote mortgages under false pretenses, forged documents, corrupted and bought off government watchdog officials, and made of with the loot - a lot of loot.
This nonsense about how fighting the banks "would effectively shut most Americans out of the housing market" is just fear-mongering. Let's shut the banks out of the housing market - they are the cause of all of the problems. Are you truly of the mindset that we should be grateful to the banks, that thinks we are being done any favors?
Your post reads like the sales pitch the banks made to get everyone into this mess. It is sales and marketing double-talk. People bought your sales pitch once, and we see here that landed us. Now you - and others pitching for the banks - present the cause of the problems to us once again as a "solution."
Old people generally have their mortgages paid off, and they are eligible for Social Security.
They would be far less destitute than young people would be if such a thing is not done, and the young people have had no say in the policies that created this mess. Why should those who had no say in it take the worst of the pain, to protect those who did have a say in the policies that created the problem from suffering the result of their actions?
Somebody lemme know when this gets straightened out and so i can stop paying my mortgage. I like to get a free house but i don't really wanna jump thru all the hoops.
unless you're one of the wall street parasites,
nothing you have is "free." you've been paying through your nose one way or another for what you don't need, knowingly or not.
"nothing you have is "free.""
If i don't pay my mortgage my house will be free. Let other losers pay for it. I just wanna live there.
So, your property tax is free too?
No, but i'm thinking of not paying that either. Some other loser can do that as well for me.
if enough homeowners decide to ride it out, there's no stopping them.
huh...
you surprise me, Ted...
this is very close...a good start, on:
Global Start Date: September 22, 2012...unanimous, worldwide rejection of the modern world...cessation of industry, voiding of contracts, release of owned property...
individual engagement in local governing and defense of community and resources...acoustic, agrarian living...
the idea is correct...the need is for unity...
Ted, you really need to quit with all these observations about how 2+2 = 4. We all know that 2+2 = 7, officially, and always has, or at least has since it equalled negative 13, which it had since it equalled the square root of 33. We cannot have you undermining God, motherhood, the Dow Jones, baseball, freedom, the free market, the Grand Canyon, and the belief that America is always right because it does what the Wall Street oligarchs tell it to and they are never wrong.
If you persist in making traitorous claims like 2+2 = 4, you will need to be watched. And we all know what happens to those who need to be watched.
Considering the subject being discussed, it might be more appropriate to say that 2 + 2 = minus 1, whose square root is an imaginary number.
Not a bad article but it's really only dealing with one manifestation of a bigger problem: our whole Debt-Based money system. Money is introduced into the economy not by the government but by private banks. But they never introduce more money than debt. A $1,000 loan means $1.000-plus-interest in debt. Inevitably the economy is awash in unpayable debt, the workers (Real producers) inexplicably owe all the value they create (money) to a small parasitic class which produces nothing. Until the American Revolution is complete (we Did democratize the executive, legislative and judiciary) and we democratize our financial system we will live as serfs.
The weapons of mass destruction are right here in the U.S. of A.: they are not in Iraq, they are the banks and the legal system that tolerates their assault on the majority of the country's residents.
Yes, Wall Street is destroying the US at ten times the speed the terrorists could possibly destroy it if they had the ability (which they don't).
The last thing I read about the subject indicated that the banks' lawyers could have taken the trouble a few years ago to get legislation passed in all 50 states to make the fraudulent signing legal. In which case, the banks' actions would not even be considered by the courts.
But they did not do that, so the signings are apparently illegal.
Our federal and state governments have three branches: #1 Executive #2 Legislative #3 Judicial AND IMHO, all three are trying to outdo each other in being corrupt and against the very ideals on which this nation was formed. C'est la fuckin' vie...
What's the solution.........hmmm...I am afraid to express my opinion as it might get me arrested and imprisoned.
The Anarchists have won and they didn't have to use any bombs. Our government has closed up shop. It is time to get a copy McCarthy's novel and hit the road.
The so called business schools these days turn out a class of thieves and cons. I've been subjected to these people endlessly lately and many of them deserve prison time. Instead, we reward this kind of behavior with wealth and power. It's no wonder were hated almost universally in the rest of the world these days. Obama is an example of these lying weasels and cons and he's just continuing the work of his fellow felons in DC and on Wall st. today. Start by reforming what these people are being taught in the so called elite business schools like Harvard and Penn. and then maybe we'll begin to see some real changes. Until then these kinds of frauds and Ponzi schemes will continue to proliferate and grow.
Dear Lender:
Our household has not been immune from this 'economy thing' and, as a result, our mortgage check will be somewhat delayed. Our financial resources have finally dwindled to the point where our ability to make payment is affected. Our living expenses have been cut back to the basics and we're still cash short to cover the mortgage payment, which is our largest expense next to taxes. We will resume paying the mortgage when our financial situation improves. It's not like we haven't been trying. It has been and continues to be very frustrating.
You may decide to proceed with eviction. Before doing so, you should know that we consider the dwelling our home and home is very important to us. Since those events that control the economy are way beyond our control, we don't plan to suffer disproportionately for something that's not entirely our fault, and since there is no safe haven from this 'economic thing', we prefer to stay in our home until whenever. You have the power to initiate or to not initiate the use of legal force that will be required to remove us from our home. Should you initiate the use of force or harassment, at whatever level, you will share proportionately. Friends who share our outlook and temperament are aware of our situation. The level of escalation is your call.
Please don't take this personally, these are just business risks that the bank must have, or should have, considered when investing in people's homes. The business climate has certainly changed.
There's no place like home.
Sincerely yours,
Debtor
http://theformofmoney.blogharbor.com/blog/_archives/2007/4/13/2878726.html
I can not and will not defend the banks. Subpoena the banks records (All of them, including internal memos and e-mails), send in the teams of forensic accounts and start prosecuting the fraud.
Simple really, a bank employee who signed a falsified legal document gets arrested. Do this and watch all the low level workers point fingers.
As for the individual homes, the mortgage is held by somebody. Has to be. Go to the county courthouse and look up the last legal record.
Problem is that it won't be the people who think they own it. This whole thing is such a screwed up mess.
I do NOT however, advocate or support letting millions of mortgage paying homeowners off the hook.
We need to set up a single government agency to convert all these loans into 30 year fixed rate mortgages at 5% interest, and most of this goes away for the homeowners. No more high interest, no more balloon payments.
As for the upside down mortgages, to me they are inconsequential. Homes should have never been treated as an "investment" with unending increases in return. If you could afford it then, you should be able to afford it now. Too many people treated homes like stocks, only with roofs.
Too many people are walking away, not because they can't afford the payment, but because they don't want to pay for something that's worth less.
For those who have lost jobs, medical, etc., federal bankruptcy law should be changed to FAVOR keeping people in their homes.
Including mortgage modification, if necessary.
What to do about the old mortgage? Put the payoff balance in an escrow account until the rightful, legal old mortgage holder can be determined.
Where to get the records? Start with the homeowners original copies.
Fair and simple.
krazy: I like your idea and recently posted something similar.
It was the public's treasury that bailed out the banks that are now seeking to foreclose (and thus own) these homes. Since the chain of fiduciary command has broken down, it is ultimately TAXPAYERS who already (by bailing out the banks) paid for these loans.
As you related, let the homeowners remain, and where possible adjust the mortgage to better reflect market values. Then have these distressed (perhaps less so after a viable adjustment to payments are made) homeowners make their monthly checks out to a NATIONAL bank (or similar facility) that would be governed by those of genuine honest character, not the latest rip-off appointees. Someone like Ellen Brown I'd recommend to oversee all transactions therein.
This could become a "People's Bank" and start lending to small businesses again. It could perhaps even pay a normal interest rate on people's savings, say 3.5%.
IF all those defrauded got to keep fancy, expensive homes free and clear, what would that say to those who are still tethered to cumbersome mortgage payments?
I don't believe in something for nothing. It sets a bad example. On the other hand, since the banks violated the trust of THE people, the mortgage payments should go to this OTHER bank. The People's Bank.
If we could start with rounding up these thieving banksters and imprisoning them, as Rall suggests, we'd get somewhere. But we all know that's not gonna happen. Obama and his criminal administration will protect them exactly as it protects Bush, Cheney and Ashcroft. Criminals put him in office and he's there for them, not homeowners illegally foreclosed on. We can't rid ourselves of the rule of banksters unless and until we rid ourselves of their protectors in Warshington. We're shackled to these criminals. Don't elect ANY more of them. Then take over the banks. Fill the prisons with these assholes and their front men in Warshington.
Ephraim:
I think these Art illustrations also capture the truth. They're very good- check them out at http://dollarcollapse.com/uncategorized/art-of-the-collapse-october-2010/. The artist did a great job on these.
bank of america said they have not stopped foreclosures
The $780 billion handed over to the banksters in the waning days of the Bush administration should have been routed through the individual mortgage accounts that were causing the negative balances in the first place. In other words, the government should have "created" that money and paid down the mortgages along the way. That would have made $780 billion available to the public to keep the economy churning along.
You have mentioned the fundamental problem. In this country, instead of paying people decent salaries so they could buy things, we have given them lots of credit so they could buy things.
Then, when they lose their jobs and cannot make the payments, and the banks suddenly are not getting the upward flow of money they depend on, we do not do the sensible thing and bail out the people who have to make the payments, we bail out the banks, which distribute the money to their shareholders.
The handouts are always given to those at the top of the ladder.
Heavyrunner,
That was never an option. Simple reason being that wasn't the goal. Making these mortgages good was a bad thing, for Goldman Sachs and the rest who bet against them. That's the reason we bailed out AIG. So it could pay off the bets. That the homeowners and public got screwed was never even a consideration.
Must have forgotten "Frankly, the bankers own the place"
The casino economy and its high stakes Wall St. gamblers have turned our entire economic system into a series of crap shots. Meanwhile the leaders take their cuts while identifying with the big chip holders. The next step is to place citizens on the hook to make good on all the bad bets.
The world is watching!
Consult your copy of The Misery (sorry: Mystery) of Capital: Why Capitalism Triumphs in the West and Fails Everywhere else by Hernando de Soto. It is due for a revision.
"They work for the banks."
Says it all, doesn't it?
The fraudulent foreclosure paperwork is just the tip of the iceberg. The real scandal, and you need to make this clear to everyone you know, is that the original mortgage-backed securities were a fraud, which re-sold the same mortgages as much as 20 times. The only way that scheme can work is for the mortgages to fail, to end investor demands for repayment, while the cash from the extra sales goes into their pockets. In other words, the banks sold those mortgage-backed securities, and need them to fail, intentionally set them up to fail, to cover their tracks! The Foreclosures are a limited hangout, and we should not allow ourselves to be fooled into thinking that is the only crime here!
AESOPS: Did you ever see the original film or broadway show, "The Producers"?
The idea was to create a show so bad, that the creditors didn't have to be paid back since there was no profit to share.
Are you saying this is pretty much the M.O. of the behind-the-scenes scam artists who dreamt up this whole sickening real estate mess?
I have not seen The Producers but this is exactly what is happening. This was designed as just another bubble and was built to fail. When it fails the forclosures are the method of eliminating the paper trail... That is why the accelerated foreclosures are happenening now. Get the word out.
Aesops you're absolutely right. But it's broader than that. At least here in California, the entire industry was in on it. Nobody cared whether the loan could ever be paid. They all took their cut up front and walked away. Appraisers who jacked up values, mortgage brokers, title companies, real estate agents. The whole damn industry was in on it.
As I said earlier, subpoena all the records, send in the investigators, and start prosecuting. Oh, and just like drug dealers, seize any assets gotten by illegal means.
So much moaning and groaning about the legality or morality of foreclosing... I'm wondering when it will come so far that gun-toting Americans are going to feel the need to begin conversations with their bankers when they get foreclosed, fully armed, of course. Think it might have an effect? Our gun-toters may be next in line. Ya never know. Apparently, even people who own their homes legally are not safe, and I'm sure there must be a large number of gun-toting Americans who own their own homes. After all, they're not afraid to show up at Tea Party events or Democratic Party political campaign events, for that matter, why not a friendly conversation with his/her local banker. Something to wonder about.
The country is becoming more and more paranoid by the day, since you can't say that it's becoming more and more violent. It's always been that.
But, what will push someone over the edge? A foreclosure, maybe? As I've already stated, Americans are (historically and inherently?) a very violent people (that is to say, the immigrant Americans, the ones that came from Europe so many centuries ago and perpetrated a pretty effective genocide against the indigenous population); ergo, the fallout from the banks stealing people's homes could have a very undesirable outcome. If it comes to violence, I would seriously reconsider a career in the banking sector. I mean it's something to think about.
I certainly wouldn't consider it. I think i'd rather be a monk. Violence scares me.
I highly suggest Leslie Cockburn's documentary, American Casino -- she relates the human story, and includes data and stats relative to the narrative. Ms. Cockburn begins in Baltimore and takes the audience to California.
I saw the film a few months ago at the Film Forum in NYC -- the audience was quite diverse, and there was hardly a dry eye in the theatre. Leslie Cockburn left nothing to the imagination, and backed up the images with clear, sourced, research. I spoke to several people on my way out, and everyone grasped the message -- that citizens had been fleeced.
KAY: I nominate you as Commondreams intrepid film (and documentary) reviewer! Thank you for letting us know about material we might otherwise have unwittingly bypassed. Obviously, your location is a plus when it comes to being up on the latest media & related events.