Earlier I posted about the bailed-out banksters who would very much like to pin the mortgage fraud debacle on people like us, who bought their crappy mortgages and who, in many cases, got foreclosed on even when, with everything collapsing all around us, we made all of our payments, and trusted the mortgage holders to treat us fairly.
The banksters have their allies in the corporate-owned media, naturally, and it’s no surprise that these include the Wall Street Journal. As you would expect, the Journal‘s op-ed page has been vociferous in it’s defense of predatory capitalism; but their news pages, which generally steer clear of the red-meat conservatism of the Journal‘s editors, have also been pushing the “it’s all just a paperwork error” narrative, as seen in this post by Yves Smith at Naked Capitalism (via Atrios):
The lead article in the Journal tonight, “Niche Lawyers Spawned Housing Fracas” telegraphs its bias in its headline: the foreclosure crisis is merely the creation of two bit lawyers who by implication don’t know what they are doing, and are pumping trivial issues up for their own enrichment, with the housing market as collateral damage.
Funny that anyone can think this spin is remotely true. The fact that solo practitioner lawyers could have such an impact on the system is not proof that they are miscreants, as the Journal implies. It is that the foundation of mortgage securitzations is rotten as a result of widespread abuses, first on the origination end, later in the foreclosure process. These small firm players are using the legal equivalent of toothpicks; the fact that their efforts have destablized the foundation of the residential mortgage backed securities market is tangible proof that they were imperiled to begin with…
…The foreclosure crisis, which is the result of what increasingly appears to be a widespread failure to convey borrower promissory notes and related liens properly to the the securitization entity is reduced to a mere “paperwork mess”. So the idea that the shortcomings are serious is dismissed. Similarly, the efforts of various attorneys who have been chipping away as aspects of this problem are incorrectly lumped together, as if there was really only a single, simpleminded strategy, a mere “lawyer’s gambit” which by implication, was copied by other low life attorneys. And this effort was to keep a deadbeat borrower illegitimately housed.
Funny, this James Kowalski, the attorney behind this dastardly act, did what members of the bar normally do (at least if they are competent): they look for weaknesses in fact and law in the case presented by the other side. And part of the process involves, stunningly enough, depositions! Kowalski’s evil deed was that he was early, perhaps first, to find a robo signer, back in 2006.
But robo signers are an abuse of court process. You can’t have it one way, and say you believe in law and order and the sanctity of contract, and then say it’s just fine to abuse legal procedures if you are pretty sure you are right. Well you can’t unless you are the Journal, skilled in the art of defending plutocrats, no matter how much in the way of mental gymnastics that might require.
Smith has a great fisking of the Journal article, but the best part is the response by James Kowalski in the comments section of the online version of the article:
Despite my best efforts to answer all of Mr. Whelan’s questions, the article contains a number of misstatements. First, Mr. and Mrs. Jackson did not face a foreclosure hearing after simply stopping payment – they paid the entire amount due per a statement sent to them by GMAC, and paid by certified check. GMAC mistakenly refused the check, alleging it was an NSF payment (not possible with certified funds), then placed the couple in foreclosure. I was simply trying to track the facts of the payment by deposing a witness who had sworn in court documents that she had reviewed the entire file and was familiar with the payment history, when, as it turned out, she was not only not familiar with the payment history, but the substance of her entire affidavit was false, including the allegation that the affidavit was sworn to in front of a notary. These were substantive questions I needed answers to – not an excuse for a delay. Further, the judge did not “throw out the case” – it is still pending, with GMAC still suing the Jacksons, years later.
I, and most of my fellow consumer attorneys who are members of the National Association of Consumer Advocates, do not raise these issues for delay – we raise them because we all have cases (this is the bulk of my foreclosure defense practice) where all or part of the foreclosure is purely the fault of the servicer or mill law firm – from homeowners whose payments were misrouted by the servicer, to servicers who simply changed the address of the property and then force-placed flood insurance, to servicers who ignore insurance plans the borrowers paid for (all examples from my cases) to servicers who refuse to even accept HAMP-type loan modification documents – all are substantive, real problems that were not the fault of the borrowers. The deposition was, in the Jackson case, merely an effort to get at the truth of the reversed payment – instead, GMAC admitted to wholesale manufacture of court documents, then promised to fix the practice, then continued that practice unabated for 4 more years.
Most of what we have uncovered are criminal violations – false testimony under oath, notary fraud, etc. These problems will continue until the attorneys general who have formed a task force recognize and confront the significant criminal violations, and will continue unless we have real reform of the servicing practices that emphasize speed over the truth.
Not a single one of my clients wants (or deserves) a free house. What they want (and deserve) is for their voices to be heard, and, for better or worse, consumer lawyers are the only ones capable of achieving this at the moment.
Oh, and it would have been nice if Mr. Whelan had taken the time to spell my name correctly throughout the article.
So, what’s the Obama administration’s response to the widespread fraud and abuse perpetrated on the American people by these greedy motherfuckers? Well, bad things may conceivably have happened, and if they did we don’t like it, but let’s not waste time trying to place blame, and bicker and argue about who killed who:
U.S. Housing and Urban Development Secretary Shaun Donovan said Wednesday that the Obama administration will attempt to protect homeowners and police the kind of paperwork fraud that led the nation’s largest banks to temporarily halt foreclosures this month, but added that the administration had yet to find anything fundamentally flawed in how large banks securitized home loans or how they foreclosed on them.
“Where any homeowner has been defrauded or denied the basic protections or rights they have under law, we will take actions to make sure the banks make them whole, and their rights will be protected and defended,” Donovan said at a Washington press briefing. “First and foremost, we are committed to accountability, so that everyone in the mortgage process — banks, mortgage servicers and other institutions — is following the law. If they have not followed the law, it’s our responsibility to make sure they’re held accountable.”
He added, however, that the administration is focused on ensuring future compliance, rather than on looking back to make sure homeowners and investors weren’t harmed during the reckless boom years. The administration is “committed to forcing institutions to change the way that they conduct business,” Obama’s top housing official said, “to make sure these problems don’t happen again.”
As the incomparable Digby puts it:
Well that’s a big relief. And I’m sure they won’t. And anyway, to get all prissy legal beagle on the finance people would end up threatening the system and that would be bad for all of us (especially the people who run it.) Of course, if anyone should suggest that some of the individuals who caused all this carnage might be required to pay a price for what they did just as a sort of warning for the future … well then, all bets are off. In fact, there are no bets. The financial firms are to be allowed to do whatever they choose or they’ll blow this whole place to smithereens. (That’s the “free enterprise” the Koch brothers and our other wealthy overlords are working overtime to protect.)
The deadbeat citizens, however, must be held accountable lest the country creates a monstrous moral hazard. Believe me, it’s not something that our dear leaders want to do. It’s just that no functioning society can allow average people to believe that they are more important than the wealthy owners who need to risk other people’s money for the good of the country. It’s tough love. We should be grateful for it.
Do read the link in Digby’s piece about the Kochtopus and its thus-far very successful efforts, with the help of Glenn Beck and a who’s-who of American Plutocracy, to influence the November elections. As Think Progress notes, these are the same people, or the heirs of the same people, who have been fighting the New Deal, the Great Society, and every other progressive social welfare accomplishment of the last 80 years. They really do want a return to the Robber Baron era of capitalism, along with the destruction of unions, the dismantlement of all regulatory processes, and in the more extreme cases, an end to representative democracy itself, the better to enjoy their obscene profits and exalted status as America’s royalty. And now that it has become easier for them to simply buy the electoral outcomes they desire, while propping up pseudo-populist movements like the Tea Party, why wouldn’t they? Nothing personal, it’s just business:
Prudential Financial sent in a $2 million donation last year as the U.S. Chamber of Commerce kicked off a national advertising campaign to weaken the historic rewrite of the nation’s financial regulations.
Dow Chemical delivered $1.7 million to the chamber last year as the group took a leading role in aggressively fighting proposed rules that would impose tighter security requirements on chemical facilities.
And Goldman Sachs, Chevron Texaco, and Aegon, a multinational insurance company based in the Netherlands, donated more than $8 million in recent years to a chamber foundation that has been critical of growing federal regulation and spending. These large donations — none of which were publicly disclosed by the chamber, a tax-exempt group that keeps its donors secret, as it is allowed by law — offer a glimpse of the chamber’s money-raising efforts, which it has ramped up recently in an orchestrated campaign to become one of the most well-financed critics of the Obama administration and an influential player in this fall’s Congressional elections…
These records show that while the chamber boasts of representing more than three million businesses, and having approximately 300,000 members, nearly half of its $140 million in contributions in 2008 came from just 45 donors. Many of those large donations coincided with lobbying or political campaigns that potentially affected the donors…
In January, the chamber’s president, Thomas J. Donohue, a former trucking lobbyist, announced that his group intended “to carry out the largest, most aggressive voter education and issue advocacy effort in our nearly 100-year history.”
The words were carefully chosen, as the chamber asserts in filings with theFederal Election Commission that it is simply running issue ads during this election season. But a review of the nearly 70 chamber-produced ads found that 93 percent of those that have run nationwide that focus on the midterm elections either support Republican candidates or criticize their opponents.
And the pace of spending has been relentless. In just a single week this month, the chamber spent $10 million on Senate races in nine states and two dozen House races, a fraction of the $50 million to $75 million it said it intends to spend over all this season. In the 2008 election cycle, it spent $33.5 million…
Chamber officials acknowledge the tough fund-raising, but they say it has been necessary in support of their goal of remaking Congress on Election Day to make it friendlier to business.
“It’s been a long and ugly campaign season, filled with partisan attacks and political squabbling,” William C. Miller Jr., the chamber’s national political director, said in a message sent to chamber members this week. “We are all tired — no doubt about it. But we are so close to bringing about historic change on Capitol Hill.”
Funny, I seem to recall someone else talking about historic change, not so very long ago. Who was that again?