foreclosure relief - Represent Consumers

A "landmark" we still can't see

For the most part, the big media and housing nonprofits have bought the government’s hype on the recent foreclosure fraud settlement, lauding it with great fanfare as a historic landmark.

It’s a good thing that not all our national landmarks are as phony as that settlement has turned out to be.

If they were, none of them would still be standing.

If big media had taken a more objective view, rather than just copying the authorities’ press releases, they might have chosen another, much less dramatic description, such as “yet to be released.”

The best description might take a few more words: “designed to make the Obama administration and state attorneys general look like they’re doing something while letting banks off the hook and leaving homeowners out in the cold and taxpayers and investors holding the bag.”

The settlement continues to raise more questions than it answers. For example, California’s attorney general Kamala Harris announced that the state would get $18 billion in foreclosure relief from the national settlement.

But then a couple of days later, Jeff Collins of the Orange County Register reported that Harris hadn’t offered a complete explanation.

As it turns out, the state might get only $12 billion.

The amount, Harris’ people explained to Collins, depends on which of two methods you used to calculate it.

“There are two sets of numbers,” said Linda Gledhill, a Harris spokeswoman told Collins.

Hah! Who knew?

One method calculates the cost of the settlement to banks, which as explained in the settlement’s “executive summary” are required to provide $25.2 billion in a variety of forms of assistance to borrowers. But providing that assistance doesn’t actually cost them $25 billion.

Apparently the settlement only requires the banks to pay out $5 billion in cash, with the balance consisting of a yet to be released complex system of credits that the the government will give the banks credit for offering the assistance, with details yet to be announced.

Meanwhile, the Financial Times (registration required) has been parsing the sparse publicly available details about the settlement. Their prognosis: The settlement shifts the costs of modifying mortgages from the banks to the taxpayers and to investors who bought securitized mortgages. As a result, it resembles another bailout more than it does a settlement.

Neil Barofsky, the former Inspector-General of the Troubled Asset Relief Program told the FT:

“If the banks are doing something under this settlement, and cash flows from taxpayers to the banks, that is fundamentally an upside-down result.”

And keep in mind that the actual settlement agreement still hasn’t been released yet, more than ten days after it was announced. What exactly is the hangup?

Do the authorities really expect us to take their word for it? How gullible do they think we are?

Remember how the 2008 bank bailout started: a three-page document submitted by the treasury secretary.

As my colleague Harvey Rosenfield warned when the President first announced the settlement, we’ll be in for a lot of surprises when the actual settlement is actually released, whenever that will be.

And something tells me they won’t be the good kind of surprises.

California Attorney General Kamala Harris / Foreclosure / Martin Column / President Barack Obama / SIGTARP - 02/22/2012

For foreclosure relief, occupy the Legislature

Two years ago, California legislators bowed to bankers when they failed to pass legislation that would require mediation between a bank and borrower before banks could foreclose on the borrower’s home.

But a recent report by the U.S. Justice Department should cause the Legislature to take another crack at making a critical choice: Do they want to provide tools to reduce foreclosures, or do they want to keep kowtowing to bankers?

California remains among the hardest hit by foreclosures: third worst in the country.

While foreclosure rates are going down nationally, that’s more a reflection of the continuing mess in the foreclosure process itself rather than any fundamental restoration of health in the housing market.

So the problem hasn’t gone away by itself.

Federal efforts to help homeowners have been ineffective because they’re voluntary for the banks, with inadequate government oversight. For the feds, foreclosure reduction efforts have consisted mainly of offering banks modest incentives for loan modifications, incentives that are less than the profit the bank, in its role as loan servicer, makes from foreclosing on homes.

As demonstrated by the California legislators’ previous refusal to embrace mediation, government officials at all levels have so far lacked the political will to force banks to take the action needed to stem foreclosures. Two years ago, Assemblyman Pedro Nava spearheaded the foreclosure mediation effort, AB 1639, which passed the Assembly but died in the Senate under fierce banking opposition. Consultant on the bill was Los Angeles mediator Laurel Kaufer, chair of the State Bar's ADR committee.

Around the country, there have been a host of mediation programs around the country, with mixed results. ¶

Programs in Connecticut and Philadelphia successfully settled about three of every four cases, avoiding foreclosures. In Nevada, officials reported that about 42 percent of the cases in mediation settled without foreclosure. Nevada also reported another significant finding – the banks dropped many of the foreclosure attempts during the mediation process because there paperwork wasn’t in order.

But in late December, the Florida Supreme Court closed down its foreclosure mediation program after state officials determined it wasn’t working because so few cases eligible for mediation ended in settlement.

Then, just a couple of weeks later, the U.S. Justice Department issued a promising report calling for wider federal use of mediation in foreclosure and more research into how well it works.

The details of foreclosure mediation programs vary widely. The most successful programs, the Justice Department explained, are those that begin early in the foreclosure process, require mandatory participation, include some form of financial counseling for homeowners, are well publicized and require a high degree of transparency by the banks – meaning that banks have to disclose how their foreclosure process works, including the secretive, often confusing criteria by which they grant loan modifications.

Will the feds blow this opportunity to attack the foreclosure crisis, as they bungled their earlier efforts? Or will finally get a clue and start taking effective action?

In California, we shouldn’t wait to find out.

This Justice Department report should give a boost to a renewed effort to require mediation in California foreclosures, and offers some guidance to California in how to create a successful mediation program.

But it will only happen if people mobilize against the banking lobby, which is sure to oppose any attempt to weaken bankers’ complete control over the foreclosure process.

We keep hearing how the Occupy movement has changed the debate, how issues that couldn’t gain traction six months ago can now get a fuller hearing. We should seize the opportunity to give legislators the opportunity to get the bankers off our backs.

Foreclosures / Martin Column - 01/18/2012

9 For the 99 – Restoring the Real Economy

Remember how aggressively our leaders have talked about tackling unemployment and the housing crisis?

Remember all the strong action to make good on their promises?

Me neither.

Remember how all our leaders criticized each other for taking money from Wall Street and other powerful corporate interests?

Remember all the potent steps they took to rid our democracy of corporate money?

Me neither.

You’ve probably heard of Herman Cain’s 9-9-9-tax plan, the scheme he says will get the economy going. Do you think it will work?

Here’s our proposal to restore the real economy. Unlike the solutions proposed by our leaders, these proposals focus on the problems faced every day by most people, not bankers.

We’ll be offering it at OccupyLA in the next couple of days to complement their work.

Support 28A, constitutional amendment overturning U.S. Supreme Court “Citizens United” ruling to stop the flood of toxic corporate cash poisoning our democracy
Prosecute Wall Street crime, not Wall Street protestors
Give citizens same right to borrow taxpayer money from the Fed at the same low interest rates that Wall Street got in the bailout
Cap bank fees and interest rates
Offer real foreclosure relief: Require banks to provide principal reduction for underwater mortgages, including allowing judges to reduce home mortgage principal in bankruptcy court to encourage mortgage modifications
Repeal unnecessary tax loopholes and other corporate subsidies (overseas tax breaks, local & state tax bribes for moving jobs from one community to another, make corporations pay taxes) and transfer savings to taxpayers and small businesses in the form of tax cuts.
Repeal corporate-backed NAFTA-style trade deals, which export U.S. jobs overseas, reduce wages of American workers to that of laborers in foreign countries and weaken environmental regulation.
Restore traditional separations between federally guaranteed consumer banking from other, riskier, financial business.
Reform student debt, stop predatory practices.

For more information, check out http://www.wheresourmoney.org

On Facebook https://www.facebook.com/wheresourmoney

Twitter http://twitter.com/ - !/WheresOurMoney

Support 28A http://www.wheresourmoney.org/campaign-2011/

Action / Citizens United / Congress / Foreclosure / Martin Column / Supreme Court - 10/20/2011

Around the Web: Now, They Won't

I remember when the Obama administration burst into office leading the nation in its campaign mantra: Yes we can. Later they adapted a new mantra to acknowledge how bad the economy was but how hard they were trying to fix it: It could have been worse. After the Democrats got walloped in the midterms, the president adjusted with his latest mantra: this was the best I could do.

Now his treasury secretary has offered the administration’s latest spin: No, you can’t.

Tim Geithner, the architect of so much of the administration’s no questions asked bailout of corporate America, is refusing homeowners facing foreclosure access to legal assistance to fight to save their homes, Zach Carter reports at Huffington Post.

Democrats from foreclosure-ravaged states are working on legislation that would overrule Geithner’s edict but the leadership isn’t interested.

This in spite of the massive failure of the administration’s foreclosure relief program, even when mortgage servicers are wrongfully attempting to throw people out of their homes.

According to a recent survey, banks started foreclosure proceedings against 2,500 homeowners while they were in the process of getting their mortgages modified.

When it comes to fixing the inadequate programs they’ve offered to fix the foreclosure mess, the Obama administration has offered a consistent mantra: No, we won’t.

Meanwhile, the state attorney general leading the 50-state investigation into the foreclosure scandal, Tom Miller, has some pretty tough talk.

Unlike the Obama administration, Miller comes right out and says that the mortgage principal should be reduced as part of any settlement with mortgage servicers. “One of the main tools needs to be principal reductions, just like in the farm crisis in the 1980s,” Miller said. “There should be some kind of compensation system for people who have been harmed. And the foreclosure process should stop while loan modifications begin. To have a race between foreclosures and modifications to see which happens first is insane.”

And yes he will, Miller insists, put financial criminals in jail.

Around the Web / Foreclosures / Martin Column - 12/16/2010

BIPARTISANSHIP FOR BIG BANKS

With 2 weeks to go to the midterm elections, President Obama and the Republicans have found an issue they can agree on: if they just do nothing, the foreclosure scandal will go away.

They’re betting that the use of robo-signers to process foreclosure documents without actually reading them will just amount to a pile of sloppy paperwork.

They’re betting that blaming borrowers will trump public outrage over banks holding themselves above the rule of law that states they have to prove that they own a mortgage note before they can foreclose.

You can understand the Republicans’ position; they argue that the government has no responsibility and is only capable of making any problem worse.

President Obama’s approach can’t be much of a surprise either, after leaving his financial policy in the hands of Wall Street apologists, fighting the most robust financial reform, providing a failed foreclosure relief program and not raising a finger to help when banks opposed his own proposal and not using his bully pulpit to push it. The president, despite his occasional bursts of rhetoric, has never assumed the role of tough regulator and reformer he promised on the campaign trail, preferring to act as the big bank’s collaborator-in-chief.

The president’s name may not be on the ballot November 2. But many of the Democrats who are facing the voters advocate a more robust response: a foreclosure moratorium while the very real legal issues are sorted out.

The Obama administration has taken to sending signals to the voters, hoping that might allay their worries. The feds announced the formation of that entity designed to show concern while guaranteeing that no action will be taken for the foreseeable future: a task force.

A number of banks had started their own voluntary moratoriums on some foreclosures. But two of those banks, Ally and Bank of America, have already canceled them. Meanwhile all 50 state attorney generals have announced their own investigations into the mess.

Despite the efforts of bank apologists to minimize it, the foreclosure debacle continues to shape up as a series of nasty legal battles, with a dramatic, unsettling impact on the housing market.

Opponents of a foreclosure moratorium portray it as a way of giving homes to people who haven’t been making their mortgage payments. But that’s a phony argument. A moratorium will not end up causing anybody who hasn’t been paying their mortgage to own a house they didn’t pay for.

As far as borrowers living in their houses for free, let’s be clear: that’s happening now, and it’s not the fault of any moratorium. It’s happening as a result of the banks’ own chaotic approach to foreclosure, often not wanting to take possession of property that has lost its value or not hiring enough staff to manage the properties properly.

This is the terrible irony about the banks’ fear-mongering. While they’re always predicting awful consequences to any action that limits their own power, the banks create the consequences all by themselves, or with the help of their willing collaborators.

Bank of America (BoA) / Foreclosures / Martin Column / President Barack Obama - 10/20/2010