1. Naked Capitalism | Banks Win Again: Weak Mortgage Settlement Proposal Undermined by Phony Consent Decrees
2. David Dayen | The Schneiderman Gambit: Financial Fraud Unit Appears Designed to Fail, and Grease Skids for Foreclosure Fraud Settlement
3. Naked Capitalism | Mortgage Settlement Term Sheet: Bailout as Reward for Institutionalized Fraud

1. Naked Capitalism | Banks Win Again: Weak Mortgage Settlement Proposal Undermined by Phony Consent Decrees
2. Naked Capitalism | Mortgage Settlement Term Sheet: Bailout as Reward for Institutionalized Fraud
3. Naked Capitalism | Obama Pressing for a “Shock and Awe” Mortgage Mod Program, 3 Million in 6 Months

1. Abigail Field | Dear Representative Issa: Questions for Your Fannie Backdoor Bailout Investigation
2. Abigail Field | Hey AGs: Banks Aren’t Credible Negotiating Partners
3. Abigail Field | Dear Attorneys General: If You Want to Be Re-elected, Sue the Banks

1. NY Times – Queens Woman Nearly Loses Home Over Bank of America Error
2. Fraudclosure | Largo Man Nearly Loses His Home Over 80 Cents, Still Not In the Clear
3. A Fraudclosure Story | CitiMortgage Foreclosure, Loan Mods and Lies

Ghost of Congress Past.

This is not a new question.  The fund that the Daily Caller rightly reports as a potential American taxpayer bailout got created in 2009 as part of the legislation that also launched Cash for Clunkers, the notoriously failed effort that wasted $3 billion more by subsidizing car sales that would have taken place anyway while [...]

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Uh oh.

Does it matter that Romney hasn’t worked for Bain & Company in nearly 20 years or are the optics of this one bad enough to make it newsworthy regardless? The car dealership episode was one of the most controversial of the auto bailout — as many dealers across the country complained they were being put [...]

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Hmmmm.

Rush Limbaugh unloaded on him today for saying this, but it is what it is. If you want Mitt Romney as your nominee, you’d better be prepared to make ideological compromises. Go re-read Dan McLaughlin’s piece yesterday for a refresher on that. Said Mitt: “In the general election I’ll be pointing out that the president [...]

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“Integrity is not a commodity. It’s the most rare and precious of personal attributes. It is the core of a person’s — and a company’s — reputation.”

John Stumpf, Chairman and CEO, Wells Fargo Bank

Doug and Holly built their home in Raleigh, North Carolina back in 1994.  It’s the only home their four children… ages 12, 13, 15 and 18… have ever known.  For something like 18 years, they never missed a mortgage payment.  I spoke with Holly for a couple hours last night… she’s simply as nice a person as I can imagine exists.

In 2009, the recession hit Doug’s business pretty hard… but no surprise there right?  He certainly was far from alone.  And I would think that Wells Fargo should at least somewhat understand that situation.  After all, the federal government’s taxpayer funded bailout that year sent $38.6 billion Wells Fargo’s way, isn’t that right Mr. Stumpf?  No matter.

Holly wrote to me yesterday… her message began by saying:

“Time is of the essence. I am writing to you today for your help.”

Here’s how her message ended:

“We really need to be out of our house today but Freddie mac put it out in the public that we have until January 3, 2011.  I asked Wells Fargo and their attorney to put that in writing but they wouldn’t. They just agreed to it.

However, I am afraid that they will send the sheriff out today to lock us out of our home. We have not moved yet as we are still under review.  Can you help us by pointing us in the right direction?  We are so desperate.”

I’m going to tell you their story in a moment.  But, first I want to point something out to Wells Fargo CEO John Stumpf and the folks at Wells Fargo.

Holly asked you and the bank’s attorneys at Brock & Scott, if her family should expect to be evicted today or whether they had until the 3^rd of January and you agreed that it would not be until January.  You wouldn’t give her anything in writing, but that shouldn’t be necessary… you agreed.

But you see, Mr. Stumpf, as Wells Fargo’s CEO, at least one point should not be lost on you… she doesn’t TRUST you… she can’t trust you, and I don’t blame her.

She doesn’t believe your bank even when it comes to something like whether she and her four children will be evicted today or next week.  Just before New Years’ Day or right after.  She can’t trust your bank to answer a question like that and she has damn good reason… it’s because you and your bank have been proven to be entirely untrustworthy on so many occasions that she’d rather trust a convicted felon off the street than someone from Wells Fargo Bank.

And so would I, Mr. Stumpf, so would I.  And the same will go for her four children… someday.

Mr. Stumpf, you were one of the 100 highest paid CEOs in the country last year, with almost $19 million in total compensation.  That seems like a lot considering we don’t seem to be able to trust you to answer a question like the one Holly asked, does it not, sir?

Holly and her husband separated in August of 2009.  I didn’t ask why, it’s none of my business, but I could tell that they were very loving and caring parents because she explained how they’ve alternated staying in the home with the kids, 4 days on, 3 days off.  They didn’t want their marital problems to disrupt the lives of their children, so she stays at an apartment and he sleeps at his office.

Perhaps it was their financial difficulties that put too much strain on their marriage, it certainly couldn’t have helped.  Doug’s business was coming back slowly but in October of 2010, Doug couldn’t make the mortgage payment for the first time in over 16 years.  He didn’t tell his wife, I’m sure I know why… he couldn’t.  Like I would have done, he probably devoted all of his time to work so he could catch up as soon as possible.

Holly received a letter from Wells Fargo in February of 2011.  It said their home was in foreclosure.  She called the bank immediately to make payment arrangements that would bring loan up to date right away, but the bank wouldn’t talk to her.  She learned that she was not on the loan, she was just on the Deed of Trust.

She went to see Doug at his office, and the two of them called the bank on speakerphone to arrange to make up the back payments.  Holly had $12,000 in her IRA, and she owned a second home that had equity of roughly $60,000.  And wouldn’t you know it, that mortgage was with Wells Fargo too, and she had never missed a payment.

But, Wells Fargo said they couldn’t accept payments at that time, the couple would have to contact the bank’s foreclosure attorneys at the law firm of Brock & Scott.

SIDEBAR: I’m no banker, but I hear about this sort of thing happening all the time.  Why the hell can’t banks accept a payment… ever?  And don’t bother telling me there’s a rule or a law, because banks treat either like a speed bump when it suits them, that much is clear.  When a homeowner tries to make a payment, figure out how to accept it and get them back on track as quickly as possible.

Doug ended up asking Wells Fargo about a loan modification.  There were delays on Wells Fargo’s end, according to Brock & Scott, so for the purposes of our story, let’s fast forward.

On October 7, 2011, Doug received a letter from a Wells Fargo Preservation Specialist, Katerina Williams.  The letter said that all Doug had to do was have all of the required documents submitted to Wells by October 22, 2011 and he would be reviewed for a loan modification or some other program offered by the bank.

Here’s what the letter of October 7^th said:

“As your mortgage servicer we want to help you stay in your home.  If you do not qualify for a loan modification, we will work with you to explore other options available to help you keep your home.”

Doug submitted and Wells Fargo confirmed receipt of all required documents by October 19^th, three days before the deadline of October 22^nd.  (Holly has the fax receipts showing the date.)

So, the bank immediately started doing what Katerina Williams said the bank would do… they began reviewing Doug and Holly’s file for a loan modification?  No, I’m afraid they didn’t do that.

What Wells Fargo did do was sell their home at a Sheriff’s Sale on October 21, 2011… a day BEFORE THE DEADLINE FOR SUBMISSION OF THE REQUIRED DOCUMENTS.

I can only imagine the feelings of panic Holly and Doug were experiencing as they made call after call to their Wells Fargo Preservation Specialist who “wanted to help them stay in their home.”  They had been told that there would be no sale assuming everything was submitted by the 22^nd.  But, now Katerina couldn’t be reached.

I’m sure she was busy.  Perhaps friends had unexpectedly come in from out of town, or maybe she had a dentist appointment… that lasted for the next two months.  What?  It could happen.

Holly and Doug were finally able to reach the woman’s supervisor who said all she could do is submit their file for review after the sale because no one had bid on it and so it ended up going back to Freddie Mac.

So, the supervisor did exactly what she said she’d do and submitted the couple’s file for review?  No, I’m afraid not… once again.

Next thing the couple knew two letters arrived from the foreclosure attorneys at Brock & Scott.  One was an eviction letter, which said they had 10 days to get out of the home they had built in 1994 and for which they had paid without incident for 16 plus years.  The other was a cash-for-keys letter that said they could stay in their home until December 29, 2011.

They checked and were told that if they left the home it would be considered abandoned and any review of their situation would be over.  So, with no other choices apparent, they chose the cash-for-keys offer, hoping the extra time would allow them to fight the foreclosure and allow them to get an answer to their case, still supposedly under review.

The couple wrote to Wells Fargo, to Freddie Mac, and to Brock & Scott asking that the eviction date be postponed as their review was still pending. Not even one person even responded.

Out of desperation, Holly sent an email to the bank’s CEO, John Stumpf.  (Oh good… that’s you John.  Here’s your chance to help your customer stay in her home.  For almost $19 million a year, I’m thinking you can at least make sure the nonsense stops, right John?)

Holly and Doug heard from Paula Kingery, who said that Mr. Stumpf had forwarded Holly’s email and that she was now on the case.  And what a relief that must have been.  The bank’s CEO had taken action, and thank the good Lord for that.

Today is the 30^th of December… and still no response from anyone, even though Holly has called, faxed and emailed too many times to count them anymore.  The couple assumes that their originally assigned Preservation Specialist, Katerina Williams, must be dead, as they have been unable to reach her via phone, fax or email since before the date of the Sheriff’s Sale.

Here’s the situation in Holly’s own words, as I could not improve on them no matter how I might have tried…

“Paula Kingry called me last night to let me know that she has a phone call in to the lead investigator on our case to see if they can do anything to lift the eviction date. I don’t understand how they don’t know if they can do that and how they can ask us to leave our home when we are still under review. We were told that if we leave we will give up our rights to that review, but if we stay I’m scared that the Sheriff will forcibly remove my four children, and me… and any belongings in the home will be forfeited.”

That’s very nice John Stumpf… very nice indeed.  Have you ever felt like that?  Have you ever felt afraid that the Sheriff would soon be coming to forcibly evict you and your four children from somewhere?  Probably not, would be my guess.

By the way, I should have asked earlier… are you having a nice holiday, Mr. Stumpf?

I only ask because Holly’s living through her own personal hell because of your bank, Mr. Stumpf.  You foreclosed on their home illegally… and if it wasn’t technically illegal because your industry’s lobbyists have made it so, I don’t care one bit… it was WRONG.  And I am going to assume you know the difference between RIGHT and WRONG.

Your bank sold Doug and Holly’s home the day before the submission deadline for the paperwork required to apply for a loan modification.  Then your people told the couple that they were in review to see if the sale can be rescinded… and never called, nor could anyone involved be reached again.

Mr. Stumpf… I want you to know that I take absolutely no pleasure in any of this.  It is now 5:29 AM, and I’ve been up all night writing this article for Doug and Holly because I care about them.  I have a family and I could be doing other things, not the least of which is sleeping… if only Wells Fargo were able to treat its customers like anything above the way a state penitentiary treats its inmates.

You see… I’ve been writing about the financial and foreclosure crises for just over three years now… I’ve written over 600 articles on the subject.  Your bank, meanwhile, has not gotten any better at this whole loan modification thing during that time.  How is that even possible, Mr. Stumpf?  How can you not be any better at this after three years of doing it every day?

It seems, for example, that you still can’t answer the phone with any consistency.  What’s the problem?  Is it all those buttons?

Here’s what you were supposed to do in this situation, and trust me… although it may seem presumptuous, I feel safe speaking for EVERYONE in America…

As Holly has informed your people, she’s prepared to make the payments to prevent the loss of her home.  In fact, she tried to do just that on several occasions.  She has more than $10,000 in her IRA, and she owns another home on which Wells Fargo has the mortgage… it’s current, by the way… and there’s approximately $50,000 in equity.  She’ll sell it and use that money to pay for her home, if that’s what is required.

Also, she’s working, earning $4-5,000 a month on her own.  Doug’s insurance agency business is also doing better, and he’ll likely make close to $100,000 this year.  They remain separated, but he still supports the family.  Plus, they only have 10 years left on their loan.  If Wells could extend the term to a 30-year loan, there would be no problem making the payments as they always have.

I imagine that there could be some issues because she’s not on the loan, and only appears on the Deed of Trust, but they’re not divorced… and regardless, those are the sort of issues that a bank is supposed to help their customers with… what the bank is not supposed to do is screw around for months, lie, stop responding to calls, and then sell someone’s home the day before the bank told them to submit the paperwork required to apply for a loan modification.

In fact, I had a woman in Tennessee that I had to write about a couple of months ago… same problem, but Bank of America figured it out and got her mortgage modified… after I wrote about them too, of course.  (And if you’re not already familiar with me, feel free to ask Brian Moynihan about me, he’ll fill you in, I’m quite sure.)

Doug and Holly were excellent customers of your bank for over 16 years, and then they hit a rough patch.  They needed the bank’s help… some guidance to get them through difficult times.  You had a chance to earn the trust of a customer for life… (and the good news is you still do… but as Holly said in her message to me: Time is of the essence.)

Here’s an excerpt of what Mr. Stumpf wrote about his company’s Vision & Values…

“Our progress has not been perfect. We learn just as much from failure (perhaps more) as we do from success. Companies are made up of human beings who make mistakes. When we make them we admit them, learn from them, then we keep moving forward with even more understanding, guided by the same values toward the same vision.”

I like the sound of that, Mr. Stumpf.

Here’s what Holly said at the very end of our conversation:

“We went to the courthouse yesterday Dec 28, 2011 to file a TRO but they didn’t have forms there for us and we weren’t sure how to do it, but they told us we had to have a attorney file them. We are having a very difficult time finding an attorney here in Raleigh, NC on such short notice. I have called a few but they can’t help and am waiting for phone calls to be returned from others.”

You see, the thing is… I DO KNOW LAWYERS IN NORTH CAROLINA, lots of them, actually, and one in particular… a good friend… Max Gardner.  And I’m going to have to call Max later today and find out what can be done through the courts to stop you from sending the Sheriff to Holly’s to throw her children into the street.  I don’t want to, mind you… especially since you could so easily correct this.

See, and I’d like to think that what I’ve written here would be enough… but I fear it won’t be.  So, if you’ll excuse me for just a moment… I’m going to introduce you to some friends of mine…  Mandelman out.

 ~~~~

Ahem… Excuse me…Are there any DOERS in the house?

CALLING ALL DOERS!

 ~~~~

Doug & Holly Niemic

Raleigh, NC

Loan Number: 0157248618

 ~~~~

And look what I found… a whole list of Email addresses for Wells Fargo execs, but let’s start with letting Mr. John Stumpf know how littler we think of this situation his bank has created.  Let’s let him know we’re here and we’re paying attention… and that there are quite a few of us.

Chairman of the Board, President, CEO: John.G.Stumpf@wellsfargo.com

~~~~ 

John Stumpf (415) 396-7018
john.g.stumpf@wellsfargo.com
CEO: John G. Stumpf
420 Montgomery St.
San Francisco, CA 94163
1-866-878-5865

~~~

Sharon Cecil, Assistant to Both
WELLS FARGO HOME MORTGAGE
sharon.cecil@wellsfargo.com

~~~

Todd M. Boothroyd
Senior Counsel, Real Estate Division
Todd.M.Boothroyd@wellsfargo.com

~~~

**** Kovacevich (415) 396-4927
kovacedm@wellsfargo.com

~~~

John Stumpf (415) 396-7018
john.g.stumpf@wellsfargo.com
CEO: John G. Stumpf
420 Montgomery St.
San Francisco, CA 94163
1-866-878-5865

~~~

Mark Oman (515) 324-2035
mark.oman@wellsfargo.com

~~~

Cara Heiden (515) 213-4040
cara.heiden@wellsfargo.com
Executive number for members to use to escalate the mod process 1-800-853-8516.
Executive Communications
MAC X2302-02J 800 S. Jordan Creek Parkway
West Des Moines, IA 50266
515-324-3130
&
515-324-2872

~~~

Denise Erickson
Executive Mortgage Specialist, Office of the President, WF Home Mortgage
MAC X2302-019
1 Home Campus
Des Moines, IA 50328
denise.erickson@wellsfargo.com
1-515-324-2610 

~~~

Cara K. Heiden, CEO
WELLS FARGO HOME MORTGAGE
cara.k.heiden@wellsfargo.com

~~~

Mary Coffin, Vice President
WELLS FARGO HOME MORTGAGE
mary.coffin@wellsfargo.com

~~~

And a few more… just in case… 

Executive Vice President, General Counsel: James.M.Strother@wellsfargo.com

Executive Vice President, Controller: Richard.D.Levy@wellsfargo.com

Senior Executive Vice President – Wholesale Banking: David.A.Hoyt@wellsfargo.com

Senior Executive Vice President David.M.Carroll@wellsfargo.com

Senior Executive Vice President: patricia.r.callahan@wellsfargo.com

Senior Executive Vice President, CIO: kevin.a.rhein@wellsfargo.com

Senior EVP, Community Banking: Carrie.L.Tolstedt@wellsfargo.com

Senior Executive Vice President: AVID.MODJTABAI@wellsfargo.com

The Board of Directors, Wells Fargo Bank: BoardCommunications@wellsfargo.com

I really don’t care how that headline sounds.  I’m going to make my point regardless, and I think it needs to be made bluntly.  I’m far too angry and way too upset to do anything else.  This is it for me.

I started this blog three years ago for ONE reason: Because the government and banking PR machine was blaming the crisis on “irresponsible borrowers,” and I KNEW then that would prove to be an ultimately destructive thing because, as I wrote back then… when they realize what’s really happened, that it’s not “irresponsible borrowers,” they will have destroyed  the political will to do what’s needed to fix it.  No one was going to support a bailout of the “irresponsible.”

I wrote all of what I’m about to say hundreds of times and in so many ways I couldn’t even count them all.  Recently, I wrote an article titled, “Our future depends on just one thing.”  Abigail Field worked on it with me.  I don’t know… maybe it was 15,000 words.  I was shocked at how many people actually read it… maybe 5,000, which is a lot when you consider how much time it required.

I knew what would come, but I also voted for Barack Obama and I believed that his administration would do something about the foreclosure crisis.  And as I’ve sat and watched this administration’s policies and performance, I have to admit that up until recently, I didn’t know why they were doing the abysmal, seemingly unfeeling and irresponsible job they so obviously have done.  The kind of job that led Neil Barofsky to make the comments he made this week… his comments you’ll read below.

Now, however, I know what’s happened and why it happened.  It happened because the Obama Administration continues to be afraid of being seen as bailing out irresponsible borrowers… quite a coincidence, right?  Actually, not so much.  (Here’s another of my past attempts to explain this situation in writing: “Why Americans Are Allowing the Foreclosure Crisis to Continue.”)

But, you’ve heard what I have to say, so try this on for size and see what you think.  The book, “Confidence Men,” by Ron Suskind, tells the inside story of the first three years of the Obama Administration, based on hundreds of interviews with insiders… including interviews with President Obama himself. It’s not pro or con… it just is.  Jon Stewart interviewed Suskind a couple of months ago… it’s fascinating and I’ve included part one and two of that interview below.  Watch it.  Please.

Is it becoming clear?

I’ve written 600 articles now, and I suppose if I could get anyone to read a few hundred of them it might change their mind… but that would take some time.  This is an election year, as I’ve pointed out many times lately, and we need to shatter the “irresponsible borrower” misperception now if we expect anything to change for the better any time soon.

Last summer, when I returned from a week working with people at the Hawaii legislature, I knew there was only one thing to do… produce an open and shut case in a broadcast quality documentary-style program… and make it entertaining enough that it would go viral on the Internet…. maybe raise a hundred grand and get it on cable television.  Anything else would take too long to influence the number of people that had to be reached.  Nothing is absorbed as fast as high-quality video programming.

I didn’t want to produce a documentary program… I’ve done it many times in my career and it’s a lot of work.  But there was no choice, I’d been trying to get everybody on board for two and a half years at that point, and it was simply taking too long.  And I knew I was probably the only person who could do it.  I spent 20 years in corporate America as a creative director and communications strategist and I know I’m the only person in that world that could do it, because I’ve successfully shattered similarly erroneous views many times.

But… and it’s certainly all my own fault… I just haven’t been able to promote it effectively enough to get others to fund it to any real degree.  And I didn’t want to seek an investor that would want to make it into a money-making proposition and not a viral Internet campaign.

The truth is, I’m not all that comfortable with self-promotion to begin with, and this space is packed with scammers and fast talkers, which makes it that much harder to get people to write checks no matter the purpose.  They don’t know who to trust, and I don’t blame them.  So, I resigned myself to the fact that I would have to fund it myself, and that would mean that it would take a lot longer to get it done… but, it was what it was.

I’ll probably do a book at some point too, but not now because it’s too time consuming and we have an election year in front of us.  If we’re going to succeed at influencing politicians on this key point… this would be the year.  If we fail… it’s over.  What will happen… will just happen… and it will be a tragic failure for me, and an awful period in our nation’s history.

Just last night, I was talking to a homeowner in Pennsylvania and he asked me what was stopping the administration from doing anything effective about the crisis and I said right away, “Oh, it’s Rick Santelli… it’s only one thing… the ‘irresponsible borrower.’  There’s simply NO SUPPORT to help people that the country largely perceives as having been irresponsible borrowers.”  I don’t really know if he believed that I was 100% right…. maybe he thought I was partially right, but not all the way, I really don’t know.

People want it to be more complicated that that.  They don’t want to think of our government as just a bunch of guys making decisions.  People want to imagine that there’s a puppet master pulling strings and that they just aren’t privy to the information.  It’s reassuring to think that way.  Last year, I remember saying about the Obama Administration:

“Tell me there’s a plan… I don’t care if it’s an evil plan… as long as there’s A plan, I’ll be fine.  Because this looks like a bunch of people not knowing what to do and doing at terrible job at whatever they try… and that is scaring me to death.”

I started calling bankers and servicers and those on the other side because I realized that no one was winning, and with so many people losing… someone SHOULD be winning.  But no one was or is… everyone’s losing… we’re literally circling the drain.  Oh, I know… there’s a handful of bankers still getting obnoxious bonuses, and that’s wrong… but in the big scheme of things… it’s nothing really.  In a world where losses are measured in trillions, even a $100 million bonus is a rounding error.

Very quickly I realized two things… that those on the other side of this fight weren’t all that concerned with us one way or the other… and that they had no idea what to do to improve things either.  Our politicians are obviously clueless… they’re not even afraid of people not voting them back into office.  My guess would be that most of the elected representatives in the Hawaii legislature didn’t even view what’s happening as a “crisis.”  And the jackass in Arizona, Harper, think the problem is people walking away that can otherwise afford the payments no problem.

No… we’re not winning.

By the way, it’s not like I’m not used to being right way ahead of everyone else when it comes to things like this… I’ve got a 20-year track record of being exactly that.  But I never wanted to come off like that to people as a homeowner advocate and blogger, and I knew no one knew of my professional career in this world of homeowners and their lawyers.

Now, it just doesn’t matter.  I don’t really care how I “come off.” It is what it is… and I’m not a person capable of deluding myself or others into believing something that’s not true.

Here’s the story from American Banker… it’s short, so I’m posting the whole thing… read it, please.

Barofsky Blasts Treasury, Obama for Housing Mess

Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, hammered the Obama Administration and Treasury Department Tuesday night at a panel discussion on the foreclosure crisis, saying fears of a political backlash led to the administration’s tepid response to the housing crisis and refusal to back principal reductions.

Barofsfky, a former assistant U.S. attorney who is now a senior fellow at New York University’s School of Law, said the administration’s Home Affordable Modification Program was “a failure” because the Obama White House feared being labeled as helping “undeserving homeowners.”

Asked if there was any hope for homeowners at risk of foreclosure, Barofsky said: “Um, no.”

The panel was organized by the non-profit news organization ProPublica. The other participants included ProPublica reporter Paul Kiel, Alyssa Katz, editor of Columbia Journalism School’s New York World, and this reporter.

“The crisis is an example of how people lose their faith in government, which has costs that are hard to quantify,” Barofsky said during the two-hour event at the Tenement Museum in New York’s Lower East Side. “Everything that has happened since [Tarp] has been something of a mess.”

When the administration introduced the Hamp program in 2009, Rick Santelli, an editor at CNBC Business News, went on a rant” calling defaulted homeowners “losers” and accusing the government of “promoting bad behavior.” Santelli is credited with sparking (and naming) the Tea Party Movement by suggesting that people opposed to the government form a “Chicago Tea Party.”

Barosky said the White House, out of concern that aiding homeowners would cause a political backlash, quickly backed away from its goal of helping 3 million to 4 million homeowners avoid foreclosure.

There was a fear of “moral hazard,” the idea that homeowners who were not financially strapped would default to get a principal reduction, Barofsky said.

He argued that the $28 billion left in the Tarp program should be used to modify loans, but he faulted the Treasury for never spending the money, calling it a “lost opportunity.”

###

Homeowners, lawyers and fellow bloggers… we ARE NOT winning.  And we won’t win.  I’ve tried to say this numerous times in more politically correct ways, but it obviously needs to be said in less uncertain terms.

The foreclosure crisis is has only affected less than 15 percent of America’s homeowners.  More than 85 percent aren’t having the problem… yet.  Ninety-five percent of homeowners just go through foreclosure without any representation.  And with at least 3,000 homeowners evicted every single day, seven days a week… we get all hip-hop-happy because a literal handful have some very moderate levels of success… we tell ourselves we are gaining on it… but we’re not.

We’re not gaining on it because there is no WE… so, WE can’t be fighting it.  At best we represent a speed bump to the banking industry, and that won’t change for several years when there will be so many more people swept under that there will be societal pain to a degree we’ve never even imagined.

Lawyers… fighting your cases one by one… in your own small universes, without any sort of data being reported… without any sort of association… you’ve had some great cases, but their impact is akin to a Bandaid on a severed limb.  Loan modifications are the only way people are staying in their homes in any number, but the banking industry has turned those helping homeowners get loans modified into something close to drug dealers, as they echo the familiar refrain… “Call your bank directly or call a (bank funded) HUD Counselor.”

And my fellow bloggers… we continue to limp along writing perhaps bravely and perhaps helpfully, but we’re trying to outrun a tsunami in our individual small canoes.  It’s never boring… it’s stimulating even.  But it’s just nowhere near enough.

I’m not saying we should stop what’s going on… in fact, we need to do more… we need about 10,000 more lawyers and that wouldn’t be near enough.  Maybe it’s all we can hope to do as the collection of individuals that we are, but I can’t not call it as it unquestionably is.  And I can’t just sit back, write my articles and pretend that I’m changing the world.

So… here’s the deal… I need to know how many DOERS are out there.

If you’re a DOER I need to hear from you by email.  If you’re a DOER, willing to support a campaign to strategically target and then attack chosen opportunities, I need to hear from you now.  My DOERS have saved three homes in a row by sending emails in a coordinated way.  Raise your hand now and tell me your on board, because I’ll need to be able to reach you to tell us what WE are doing via email, so as not to tip our hand.

We’re going to “OCCUPY,” but in a very different way than OWS… we’re going to OCCUPY without leaving our homes. It’s going to be a game of inches… it’s going to take 3-4 months before we reach the critical mass that moves the proverbial needle.  It’s not just about reading, it’s about doing.  But, we will gain momentum and WE WILL shatter the “irresponsible borrower,” stereotype.

We’ve already proven that we can inspire a bank to take immediate action by sending some number of emails in a coordinated and targeted way.  Imagine when I can write something that results in 1,000 or 10,000… or even 100,000… or maybe someday 1,000,000 people sending a letter and a bag of pretzels to a specific individual’s office.

• What do you suppose would happen if a senator or a governor were to walk into work one morning and find 30,000 bags of pretzels carrying one message?  And not once, but every month… or more often that that if need be.  Would it make the news?  Damn right it would… and others would join our ranks.
• Why couldn’t a group like that raise a fund to help with eviction defense for senior citizens or single moms?  Wouldn’t the existence of such a fund also make the news?  Yes it would.
• Why don’t we have one highly visible site with trusted lawyers listed on it, so no one ends up retaining sub-par legal representation?  Would that be newsworthy?  Yes.  My trusted attorneys tab gets more traffic than 90 percent of my articles each month.
• Why couldn’t such a group become its own PR machine, publishing viewpoints as part of a strategy, instead of the current passionate but disjointed efforts?  If we can’t get a documentary done, why couldn’t we produce a series of viral vignettes that we all help to distribute to the media, to politicians… to servicers… to other homeowners and that destroy the irresponsible borrowers stereotype?
• Why couldn’t we have our own bills being proposed in various state legislatures that provides solutions?
• Why don’t we make better use of headline risk by publishing the stories of injustice that go on each day?
• And much more…

We’re not wining the way we’re going.  I’m sorry to say it that way, but then again maybe I’m not.  We have to fight as a WE.  I’m not trying to be a king… in fact, I’ve never wanted to be a king.  I want to be a member of a team… but I just don’t see anyone else with any plan to inspire real change.  And yet the banking lobby is well-funded and relentless.

Raise your hand and be counted… and counted on.  Email me at mandelman@mac.com now.

No one helps those who don’t help themselves.  We need to be WE… and now.  Because as long as the country believes that irresponsible borrowers are the problem, nothing will change for borrowers… not enough lawyers will join the fight and as they say… we’ll see you in the soup line.

I need a core group from which we can build.  It shouldn’t be painful, there are many of us.

The country hasn’t changed.  The power of the people remains intact.

WHEN I POST A NEED FOR DOERS ARE YOU COMMITTED READING IT… AND DOING SOMETHING… SENDING AN EMAIL, SENDING A LETTER AND A BAG OF PRETZELS, OR WHATEVER?  LET ME KNOW NOW.

I HAVE A PLAN TO IMPLEMENT A SERIES OF TACTICS DESIGNED TO ATTACK THE IRRESPONSIBLE BORROWERS STEREOTYPE.  ARE YOU WILLING TO HELP FUND THAT INITIATIVE FOR THE NEXT 120 DAYS?  LET ME KNOW.

Any answer is fine… but I do need to know now.

Mandelman out.

1. Abigail Field Open Letter | Dear AG Masto: Thank you For Your Courage, Leadership & Common Sense
2. Abigail Field | Dear Occupy Wall Street: Thank You For Defending the American Principle of Equality
3. Abigail Field | Dear Representative Issa: Questions for Your Fannie Backdoor Bailout Investigation

The last 24 hours have witnessed some remarkable historical revisionism on financial regulation coming out of the GOP.

First, we had one of the most bizarre and simply untrue attack ads I've ever seen, courtesy of Karl Rove's Crossroads GPS outfit. The ad calumnies Elizabeth Warren, claiming that first she was responsible for the TARP bailout and then set out to butter up bankers. Is this man on drugs? Rove seems to be confusing Elizabeth Warren with George W. Bush. 

Let's set the record straight.  Elizabeth Warren involvement with TARP was as chair of the Congressional Oversight Panel.  That was a body created by Congress to monitor and report on the effectiveness of TARP bailout.  The Oversight Panel did not create the bailout.  Congress did at the urging of the Bush Administration. The Oversight Panel had absolutely no authority to direct the use of the bailout. Its sole authority was to act as a watchdog.

And what a watchdog it was! It was Elizabeth Warren's trenchant criticism of the bailout that catapulted her to the national stage. The reason she started being invited to appear on the Daily Show and the like was because there was no better and more articulate critic of the bailout than Elizabeth Warren. The Oversight Panel could easily have been a sleepy, impotent backwater. Elizabeth Warren turned it into a ferocious bully pulpit for the interests of middle class Americans who were confused and angry over what was happening to their country. To blame Elizabeth Warren for the bailout is like calling Larry Bird the greatest New York Knick ever. It's so ridiculous that it's insulting. (And fighting words in Boston.) 

Then there's a hooter of a claim that Elizabeth Warren was courting bankers. Let's put that in some context to show how silly the charge is.  Elizabeth Warren left the Oversight Panel to help push for the creation of the Consumer Financial Protection Bureau, and for a long time it was thought that she would be nominated as the Bureau's Director. One reason she wasn't nominated was because the banks took an "over our dead [but now rescusitated via bailouts thank you very much] bodies" approach to Warren, claiming that she was "anti-bank."

Now, some might think that's a compliment, but Warren tried to show that she's not anti-bank. She just wants fair, transparent markets.  (Apparently, that's a problem for banks.  Heck, apparently, if you want market to be fair, and transparent and work as they are supposed to that makes one anti-bank, a socialist, a communist, or worse.  Capitalism, it turns out has nothing to do with markets.) To show that she wasn't anti-bank, Warren took great pains to reach out to banks and to show them that she's open-minded and willing to listen to their concerns, especially the concerns of small community banks and credit unions.  So now Elizabeth Warren is being damned for having been gracious and fair and open-minded. 

For more commentary on this lunacy, see here and here. 

What worries me about all of this is that I don't think these are isolated incidents. Instead, I think there is a very willful type of revisionism at play here. (Perhaps this should not be surprising given that the 2012 GOP Presidential nominee might be the author of historical fiction books based on the premise that the Confederacy prevailed in the Civil War.) I experienced this know-nothing revisionism myself last month at a House Financial Services Committee hearing.  Some GOP backbencher harrangued me for five minutes about how I had no right to be concerned about a bill that would authorize voodoo accounting and encourage foreclosures because I was personally responsible for the TARP bailout. Yeah, this guy thought that I had been the architect of the whole damn bailout.  Perhaps I should have been flattered. 

OK, I admit it.  I TARPed. It was all my fault.  WTF?!  I finally had to explain to this gentleman that I had merely been a lawyer working for the Congressional Oversight Panel and that it was Congress--including lots of GOP Representatives and Senators, who approved the TARP bailout. The Oversight Panel was just a monitoring body. (If I had been a little quicker on my feet, I might have added that surely the gentleman was not also accusing his GOP colleague Rep. Jeb Hensarling, who served on the Congressional Oversight Panel, of being responsible for the bailout.)

Karl Rove's ad is hoping to play off of voters' stupidity. But maybe his impression of the Massachusetts electorate has formed from spending too much time with the likes of my Congressional interlocutor.  

1. Bernanke Letter to Congress RE: Bloomberg 7.7 Trillion Secret Bailout Article
2. Ron Paul Reacts to Ben Bernanke as TIME Person of the Year
3. Bloomberg | Fed Must Release Loan Data as High Court Rejects Appeal

1. Mayor Michael Bloomberg Blames Congress and Defends Banks, Over the Mortgage Crisis
2. Wall Street Aristocracy Got $1.2 Trillion in Secret Fed Loans
3. Letter | Elijah Cummings Requests Hearing on Secret Government Loans to Rescue Banks

This video is totally worth you 2 minutes. It describes big banks in rather unflattering terms (as parasites, for example) but the main thing I got out of it is that big banks finance payday lenders. Yes, it is true that the same banks that received TARP bailout money are funding payday lenders.  The payday lenders include Advance America, Cash America and ACE Cash Express, which allow customers to borrow against future paychecks, and which charge an average interest rate of 455 percent on top of fees of $15-18 per $100 loaned. These lenders depend on the big banks' financing for their business.  Moreover, Wells Fargo, Fifth Third Bank, and U.S. Bank, all make their own payday loans too.Talk about double dipping!

1. An estimated 120 million payday loans are issued annually in the US worth a total value of $42 Billion.
2. The average effective interest rate on a payday loan is 455% (APR). For a loan of $300, a typical borrower pays on average $775, with $475 going to pay interest and fees over an average borrowing cycle.
3. There are some 17 major payday lending companies (both public and privately-held) that operate approximately half of the nation’s total of 22,000 payday lending outlets.
4. Major banks provide over $1.5 Billion in credit available to fund major payday lending companies.
5. The major banks funding payday lending include Wells Fargo, Bank of America, US Bank, JP Morgan Bank, and National City (PNC Financial Services Group).
6. All together, the major banks directly finance the loans and operations of (at minimum) 38% of the entire payday lending industry, based on store locations.
7. The major banks indirectly fund approximately 450,000 payday loans per year totaling $16.4 Billion in short-term payday loans.
8. Wells Fargo is a major financier of payday lending and is involved with financing companies that operate one third (32%) of the entire payday lending industry, based on store locations.
9. All of these above mentioned banks received TARP bailout funds in 2008-09 and have benefited from accessing capital at exceptionally low interest rates from the Federal Reserve.
10. Major banks access credit from the Federal Reserve at 0.5% or less, these banks extend an estimated $1.5 Billion annually to eight major payday lending companies, who in turn use this credit to issue millions of payday loans to consumers every year at average rates of 400% APR.

1. More Deadbeat Banks Missing TARP Dividend Payments
2. Wall Street Aristocracy Got $1.2 Trillion in Secret Fed Loans
3. Abigail Field | Bank of America’s $500 Million Back-door TARP

The American people are so generous! I'm super serious. Thanks.

At Human Events, Seton Motley takes note of one of the more tin eared, tone deaf remarks to hit the web in some time. On this occasion, it comes from Government Motors CEO Dan Akerson, in recent comments about the company’s future prospects, as well as its post bailout performance. To put this in context, [...]

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Three reasons to say no.

Do Occupiers have a point in demanding a bailout of student loan debt? After all, the argument goes, the federal government bailed out the big financial institutions — why not the little guys, too? Reason and Reason TV offer this three-and-a-half minute slice of common sense in showing why this is not just a bad [...]

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1. Abigail Field | Dear Occupy Wall Street: Thank You For Defending the American Principle of Equality
2. Abigail Field | Dear Representative Issa: Questions for Your Fannie Backdoor Bailout Investigation
3. Nevada Attorney General Masto Files 606 Count Criminal Indictment Against Two Lender Processing Services Officers

1. Matt Taibbi of Rolling Stone | Why Isn’t Wall Street in Jail?
2. Matt Taibbi | Finally, a Judge Stands up to Wall Street
3. Matt Taibbi on SEC Covering Up Wall Street Crimes (VIDEO)

Bad news? Well ...

Remember how the Obama administration bragged about saving the American auto industry with the $85 billion bailout for GM and Chrysler?  They’ve claimed that the bailout will only — only — cost taxpayers $14.3 billion in the end.  However, like so many of the White House’s economic claims, further revisions bring bad news (via The [...]

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Hypocrisy.

Barack Obama has exhorted supporters to object to large bonus payouts at financial institutions that took TARP bailout money. The House Oversight Committee and its chair, Rep. Darrell Issa, want to know why Obama hasn’t objected to the ridiculous levels of compensation at the two largest bailout recipients — Fannie Mae and Freddie Mac. In [...]

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1. Lee Camp | Occupy Wall Street Is A Thought Revolution – And It Won’t Be Minimized
2. Lee Camp | Occupy Wall Street Has Proven We Don’t Have Free Speech
3. Lee Camp | “Wall Street Is Dirtier Than Occupy Wall Street”

COMING SOON!

BAILOUT

Fed up with corrupt “bail-out” banks trying to foreclose on them, five Chicagoans drive to Vegas with stacks of cash withheld from bailed out banks—to give themselves a long-overdue bailout of their own!

A feature documentary that explores the causes and effects of America’s financial crisis: after losing his job as a big-firm lawyer, Titus withholds his mortgage payment from a major bailout bank for several months. Seeing his friend rack up tens of thousands of dollars, comic John Fox wheedles Titus into taking a Winnebago excursion to the Las Vegas Tropicana where Fox has a stand-up gig. Three unemployed friends join them for a frenetic party of gambling and vice at ground zero of the foreclosure storm caused by the financial crisis.

Along the way, they see first-hand how politically powerful banks are systemically eliminating America’s middle class through off-shored job losses and fraudulent home foreclosures. An enigma wrapped in Doc-hybrid form, Bailout is a social documentary that explores American anger with the Wall Street elites who survive and thrive on their cancerous system of bailouts, fraud, and political corruption that actively work in concert to destroy Main Street.

From entry-level workers in northeast Indiana RV factories to Congressional leaders to rock stars, Bailout will tell the story of recent American economic events through the mouths of people who labored through thick and thin–what it was and how it has affected us all.

BAILOUT – Official Movie Trailer from BAILOUT on Vimeo.

NOW PLAYING!

MARGIN CALL

Starring: Kevin Spacey, Paul Bettany, Jeremy Irons, Zachary Quinto, Penn Badgley, Simon Baker, Mary McDonnell, Demi Moore, Stanley Tucci

Set in the high-stakes world of the financial industry, MARGIN CALL is an entangling thriller involving the key players at an investment firm during one perilous 24-hour period in the early stages of the 2008 financial crisis. When an entry-level analyst unlocks information that could prove to be the downfall of the firm, a roller-coaster ride ensues as decisions both financial and moral catapult the lives of all involved to the brink of disaster.

Change!

A nice catch from our friends at Investors Business Daily today paints a portrait at the selectiveness of class-warrior outrage in the Obama administration.  When AIG and other bailout recipients started to pay their remaining executives the bonuses for which they were contractually obligated, Barack Obama led a chorus of outrage against the private-sector firms: [...]

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Trading one uncertainty for another?

If George Papandreou wanted to impress his creditors with fiscal and political stability in Greece, he could hardly have done worse over the last few days. Papandreou made a deal with his EU partners for a second bailout of Greek debt that relies on austerity measures to control the nation’s deficit spending and debt. Instead [...]

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Did the White House consider a Solyndra bailout?

Taxpayers lost $535 million in subsidies to Solyndra, a firm whose main investor was a bundler for Barack Obama and one that Department of Energy auditors warned would fail.  Did Solyndra executives share in the pain?  Not exactly, as the San Jose Mercury News and GreenTechSolar discovered while perusing the bankruptcy documents.  Solyndra execs took [...]

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Uh oh.

It’s been a while since we looked in on Greece, which has become the single most destabilizing force in the industrialized financial world.  The EU finally reached agreement with the Greeks last week on budget reforms and debt repayments for a second bailout to forestall a collapse of the euro and then of the global [...]

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1. Occupy Oakland | Video of Riot Police Firing Tear Gas Flashbang Grenades Critically Wounding Veteran
2. 1 Marine vs. 30 Cops at #OccupyWallStreet #OWS VIDEO (Marine Wins)
3. Florida Gov Rick Scott OKs last-minute bailout for courts

1. Happy Halloween Everyone!
2. TWAS THE NIGHT of Foreclosure
3. Thriller Delves Into Murky World Behind Foreclosure Crisis