Banks behaving badly

Matt Stoller: “Mortgage Servicers: Getting Away with the Perfect Crime?

The bad behavior is so rampant that banks think nothing of a contractor programming fraud into the software. This is shocking behavior and has led to untold numbers of foreclosures, as well as the theft of huge sums of money from mortgage-backed securities investors.

Here’s how the fraud works: Mortgage loan notes are very clear on the schedule of how payments are to be applied. First, the money goes to interest, then principal, then all other fees. That means that investors get paid first and servicers, who collect late fees for themselves, get paid either when they collect the late fee from the debtor or from the liquidation of the foreclosure. And fees are supposed to be capitalized into the overall mortgage amount. If you are late one month, it isn’t supposed to push you into being late on all subsequent months.

The software, however, prioritizes servicer fees above the contractually required interest and principal to investors. This isn’t a one-off; it’s programmed. It’s the very definition of a conspiracy! Who knows how many people paid late and then were pushed into a spiral of fees that led into a foreclosure? It’s the perfect crime, and many of the victims had paid every single mortgage payment.

Pat Garofolo: “Banks May Have Illegally Foreclosed on 5,000 Members of the Military

For months, major banks have been dealing with the fallout of the “robo-signing” scandal, following reports that the banks were improperly foreclosing on homeowners and, in many instances, falsifying paperwork that they were submitting to courts. Banks have been forced to go back and re-examine foreclosures to ensure that homeowners did not lose their homes unlawfully.

In the latest episode of this mess, the Office of the Comptroller of the Currency has found that banks — including Bank of America, Wells Fargo, and Citigroup — may have improperly foreclosed on up to 5,000 active members of the military. …

Yves Smith: “Federal Judge Refuses to Dismiss Bank Break-In Case Against JP Morgan, Lender Processing Services

One case that got national attention was that of Nancy Jacobini. A company hired by JP Morgan to manage properties broke into her home while she was inside even though the property was not in foreclosure:

And to add insult to injury, the bank broke in a second time, after Jacobini had filed suit in Federal court. The lame excuses made, that she was not paying her utilities and had abandoned the house, were simply untrue. …

JP Morgan had no legal relationship to Jacobini at the time of the break ins. It has filed a robo-signed assignment of mortgage that post-dates the break-in. The practical implication is that random financial institutions are being allowed to barge into people’s properties, and the only recourse they have is a slow, costly adjudication.

Mike Konczal: “The Fed Scrambles to Save Banks, Stalls on Unemployment

If we were to replace the FRB with a group of monkeys armed with darts, one would imagine that they would make at least a few projections above the actual rate of unemployment. It’s funny — the FRB tried to revise how bad unemployment is but doesn’t revise it anywhere near enough to lower it to where the economy actually is.

So to recap: Lehman Brothers goes worse than the Federal Reserve’s projection and the Fed goes to the most extreme lengths it can find to extend emergency lending. Every single unemployment number turns out to be worse than all of the Federal Reserve’s projections, and it finds every excuse to look the other way.

Nick Kristof: “A Banker Speaks, With Regret

One memory particularly troubles [former Chase Home Finance vice president James] Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans.

These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up.

Bryce Covert: “Dealing With Credit Card Companies Is a 99% Problem

The newly operational Consumer Financial Protection Bureau established a Consumer Response office and a system for addressing consumer complaints [about credit card companies] when it launched in July. … Between then and October, consumers submitted 5,074 credit card complaints, which amounts to over 50 a day.

Only 50 a day? I guess they’re just getting started. …

Robert Johnson on “The bias toward creditors

But the thing that surprises me most right now is why the big banks and bondholders aren’t much more aggressive in favor of fiscal stimulus. I mean things like 10-year infrastructure programs. I understand there are different philosophies of government between the right and the left, but I’m surprised more bankers aren’t saying we need to get people back to work. Austerity is never the endgame. It never works in the long run.

Merrill Knox: “While Reporting on Mortgage Fraud for KLAS, George Knapp Discovers He Was a Victim

KLAS chief investigative reporter George Knapp made a disturbing discovery while reporting on Nevada mortgage fraud for “Desert Underwater,” the station’s series for sweeps: he was a victim of the very mortgage fraud he investigated.

As part of his reporting, Knapp interviewed a foreclosure attorney who told him that many people who purchase homes out of foreclosure have fraudulent paperwork associated with their chain of title.

“I gave her my address, because I bought a home out of foreclosure three years ago this month,” Knapp said in his report. “It took her all of about five minutes to call up the documents and identify the problem in the chain of title. The Attorney General’s office confirmed to me that I don’t own my home because of bogus signatures and improper filings.”

Brad DeLong: “Yes, the U.S. Government Ought to Own the Banks Now

Without the Fed and the Treasury, the shareholders of every single money-center bank and shadow bank in the United States would have gone bust. …

When you contribute equity capital, and when things turn out well, you deserve an equity return. When you don’t take equity — when you accept the risks but give the return to somebody else –y ou aren’t acting as a good agent for your principals, the taxpayers.

Thus I do not understand why officials from the Fed and the Treasury keep telling me that the U.S. couldn’t or shouldn’t have profited immensely from its TARP and other loans to banks. Somebody owns that equity value right now. It’s not the government. But when the chips were down it was the government that bore the risk.

David Cay Johnston: “Closing Wall Street’s casino

Credit default swaps that are just bets on which one party wins and which one loses would vanish if we restored the ancient, time-tested and therefore profoundly conservative rule that government will not enforce the collection of gambling debts.

Making gambling debts unenforceable produced its own problems. For one, it created work for people like the late Harry Coloduros, who sat in my kitchen 25 years ago, bouncing my little Molly on his knee as I made coffee, and told me about gamblers he beat up to make them pay up.

I cannot imagine Goldman Sachs hiring the likes of Harry to collect on bets when the losing party fails to pay up. So, unless taxpayers cover the bets, as they were forced to at 100 cents on the dollar in the AIG wagers, Goldman would likely get out of speculative bets and stick to actual hedging.

And that shows the immense value of restoring the sound policy of making losing bettors suffer their losses without any help from government.

It’s a good idea, although I don’t share Johnston’s confidence that Goldman Sachs wouldn’t “hire the likes of Harry.” Or simply hire Bloomberg’s “army” to act like the likes of Harry.

 

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  • Anonymous

    The practical implication is that random financial institutions are
    being allowed to barge into people’s properties, and the only recourse
    they have is a slow, costly adjudication.

    We have the Bill of Rights to protect us from the government doing this sort of thing and other things.  We need to hold corporations to the same standard that we hold our government.  Maybe we need another Bill of Rights, or at least one amendment.

  • Anonymous

    We have the Bill of Rights to protect us from the government doing this sort of thing and other things.  We need to hold corporations to the same standard that we hold our government.  Maybe we need another Bill of Rights, or at least one amendment.

    FDR, is that you?

    http://www.fdrlibrary.marist.edu/archives/address_text.html

    I know, I know.  I’ve posted it before.  But it’s really good and quite relevant!

  • Anonymous

    FDR, is that you?

    Well, we have never been seen in the same room together…

  • http://mistformsquirrel.deviantart.com/ JJohnson

    Simple amendment:

    “Don’t be a jackass.  This means you.”

  • http://stealingcommas.blogspot.com/ chris the cynic

    That would never make it through committee.

    Even if it did, no way it would get the two thirds vote necessary to propose it.

    Have you seen congress?

  • http://mistformsquirrel.deviantart.com/ JJohnson

    Yeah lol – I love John Stewart’s “Are we run by assholes?!” thing.  Because we are.  Seriously.

  • P J Evans

     I’d like an amendment that says ‘any law intended to apply to the general public shall and will also apply to all elected and appointed officials’. So they can’t write laws – legally, at least – that they’re exempt from.

  • Anonymous

    I’m so fucking pissed off right now after reading those articles that I’m seeing red. What country is this? What planet am I on? I’m sorry, but at this point, why are we making a distinction between banks and the people who work for them or break into people’s houses for them?

    Honestly, I’m not one who’s quick to anger, nor do I usually agree with violence. In this case, however, I’m for it. I’d like to see bankers swinging from nooses. I know it’s a horrible thing to say, and it makes me feel disgusting inside to know that I feel that way, but these people are disgusting, social parasites. Lock them up or kill them, socialize their businesses, and give their homes to the homeless. Fuck ’em.

    You know, for all of the Ayn Rand worshiping talk of getting rid of “entitlements” and social programs, I think that these right-wing screwballs forgot that the real looters in Atlas Shrugged weren’t the people who worked for Taggart Transcontinental. They weren’t the people working the machines at Rearden Steel. The looters were the lobbyists and the companies who hired them to get sweetheart deals while the country went to hell.

    Of course, to be able to understand that, they’d have to actually be functionally literate and not just rich enough to buy their way through college, so I guess it’s too much to ask.

  • http://www.facebook.com/people/Jonathan-Pelikan/100000903137143 Jonathan Pelikan

    When BP killed the Gulf of Mexico, I mentioned several times to my parents that I didn’t understand why we weren’t treating that company as though they were an enemy and wielding our military and police forces to apprehend their leadership. This was pretty clearly the most blatant attack against the United States, her people, and her territory since 9/11.

    Given that, it’s probably pretty clear that I agree with your comment, DA. It’s not a particularly idealistic or noble impulse, but I would love nothing more than to see the national guard called out to perforate a few banks instead of protesting students for once.

  • Matri

    Cracked even provided several good reasons.

  • http://mistformsquirrel.deviantart.com/ JJohnson

    I understand the sentiment, but I’m going to be very clear:

    This is not a situation where violence is a solution.  They should be arrested, sued, and stripped of their ill gotten gains – but they shouldn’t by physically harmed.  I’m not saying I don’t understand the impulse… believe you me… I do.  But it’s not the right way.

    Besides, I suspect they’re actually vampires – if you don’t drive a stake through their wallets they’ll just keep coming back.

  • Lori

     I understand the sentiment, but I’m going to be very clear:

    This is not a situation where violence is a solution.  They should be arrested, sued, and stripped of their ill gotten gains – but they shouldn’t by physically harmed.  I’m not saying I don’t understand the impulse… believe you me… I do.  But it’s not the right way.  

    I’ve been thinking about this (cleaning gives one a lot of time to think). I’m not in favor of violence as a solution to problems, among other reasons because it’s almost impossible to control. Once you opt to light it up it’s really tough to stop it before you’ve gone scorched earth. 

    Modern democracies are designed to keep this from happening by making it unnecessary. Things like majority rule, minority rights, checks & balances and rule of law are supposed to  keep the system working in a way that allows people to work out issues without resorting to social unrest. 

    And there in lies the rub. We have once again allowed our system to be so co-opted that it no longer works for the vast majority of citizens. This global financial crisis and the way governments have responded to it, and possibly more importantly the ways they’ve refused or been unable to respond, has laid that bare. OWS is the most visible response to that, but it’s not the only one. 

    Look at this thread and any number of others we’ve had in the last year. This is a group of smart, well-informed, engaged people from a decent variety of backgrounds and when someone asks what we’re supposed to do about the outrages committed by Wall Street we’ve got very little in the way of effective response. 

    I am 100% in favor of people moving their money out of the major banks and going to credit unions and local banks. I absolutely think Progressives need to get back to the business of working issues at the local level. Part of the reason we’re in this mess is because the whack job segment of the Right has owned that part of our political system for 4 decades and they’ve used their power to steer us all off in the ditch. 

    As much as I like those ideas, it isn’t enough though and we all know it. If someone, somewhere can’t figure out a way to do more then I’m more & more convinced that we’re headed for another very violent period. In the US the closest analog to the situation we currently face is the Gilded Age. We teach it very poorly in our history classes, but the Gilded Age ended in violence and that violence wasn’t some sort of unfortunate byproduct, it was the main show. 

    We could avoid going through that again if the people at the top would learn when to say “enough” and realize that they passed that a while ago and need to give up some things to keep the system that supports them running. I see no indication that they’ll. Like every group of oligarchs before them, they think that this time they’ve found a way to either perfectly suppress the peasants or to simply do without them. The oligarchs of the past were wrong and I’m pretty sure the current batch is wrong too. If I’m right about that then it’s almost certain that large scale violence is coming, probably sooner rather than later. 

    If that happens and it’s us or them, I want it to be them. 

  • http://mistformsquirrel.deviantart.com/ JJohnson

    I can understand what  you’re saying (and I agree with much of it) – but I want to note that it’s not inevitable.

    I don’t think the system is quite as broken as we often think it is.  That’s what I’m talking about really – we’re in a bad situation, but unless the oligarchs are willing to completely flout election results* – it’s still possible to vote them out.  The problem with that of course is money in the system… it’s hard to vote people out when the liars have huge megaphones and the truth tellers are trying to shout over them near unassisted. 

    That however is why I’m always talking about the long game in this… because barring violence, there’s no quick fix, and I really, really don’t want to see violence.  However over the long haul, we sort of win by default.  Demographics alone pretty much say that – young people are overwhelmingly progressive, and Gen-X and after have seen the effects of rampant greed and idiot conservatism first hand. 

    I’m not saying we don’t need to do things – motivating people to the polls is a big one… but I think this is still fixable in the system.

    Violence is the last of the last resorts because like you said… it does tend to go scorched earth.  Ultimately no matter how judiciously it’s applied, violence will always hurt innocent people – always – and even the side that wins suffers for it.

    I guess what I’m saying is:  You may well be right, but I really really don’t want you to be; and I really think it can still be avoided.

    *And while Bush v Gore was damned close to doing just that, I think that’s about as close as you can really get without having serious consequences in the streets.  At least there they were able to provide a veneer of legitimacy for themselves.  Much further than that and I think the game is over.

  • Lori

     I can understand what  you’re saying (and I agree with much of it) – but I want to note that it’s not inevitable.  

    I don’t think it’s inevitable, but I do think it’s increasingly likely. 

    I don’t think the system is quite as broken as we often think it is.  That’s what I’m talking about really – we’re in a bad situation, but unless the oligarchs are willing to completely flout election results* – it’s still possible to vote them out.  

    I worry that the system is a lot more broken that you think it is, precisly because voting them out seems to have become almost entirely ineffective for creating real structural change. The .01% control the Dems almost as much as they control the Repubs. A minority is able to create total gridlock, and suffer no real consequences for it. 

    I still believe in voting. I vote and I encourage everyone else to vote. I just worry that it’s not enough. 

    That however is why I’m always talking about the long game in this… 

    My concern is that the long game simply may not be enough. People are starting to talk about the current situation being the “new normal”. That the days of unemployment below 5% are done for the foreseeable future. That the majority of people need to realize that they’re never going to own a home and will instead spend their entire lives at the mercy of landlords. That large numbers of people are going to have to accept that they are effectively never going to be able to retire. That hundreds of thousands if not millions of other people have to accept that they’ll never again have meaningful employment. 

    The day people start to believe that deep down is the day we go up in flames. I think that day may be closer than the effectiveness window of the long game. The long game remains important because someone has to deal with the “after”. However, if we continue much longer with this soul crushing austerity shit for the have nots and more and more luxury for the haves then violence is going to come before the long game kicks in. 

  • http://mistformsquirrel.deviantart.com/ JJohnson

    I hear ya.  I just really, really hope you’re wrong.

    In part because I’ve long worried that if things were to explode in this country, there wouldn’t be an ‘after’.

    See… my worry is, we’re so divided politically (and in other ways) at this point, that instead of riots, it could spiral into an honest to goodness civil war; and not of the original American Civil War variety where there’s essentially another nation to fight, that can be beaten and reabsorbed..

    I’m talking kind that drag on for decades, have a half a dozen or more factions and even when things finally calm down you still have animosity and lingering violence even beyond that.  The kind of thing that kills a lot of people and permanently impoverishes the area, except for the very wealthy who can afford expensive body guards.

    I just get this feeling like if it blows up, it’s going to blow up very, very large.  It might become a question of quite literally running to Canada at that point.

    I hope that’s not too doomy; it’s just a concern I’ve held since Bush won his second term.  As bad as the post Civil War south was, I think it could be a hell of a lot worse today.

    I dunno, maybe I’m paranoid.

  • Anonymous

    Rumblings of a culture war have been going on since Bush was in power.  For what it’s worth, I’m reasonably sure it’s not in the US national character to actually have an ideological shooting war, at this time or anytime soon.  There’ll be some fanatics who want to take potshots at ‘left-wing traitors’ or ‘right-wing fascists’ and there will be some isolated spates of violence, and Lord knows people like Savage and Coulter get their jollies from spouting eliminationist rhetoric, but I don’t think we as a people can get up off our asses enough to draw up battle lines and start flinging Molotov Snapples at each other.

    So I don’t think we’re at risk of having a civil war anytime soon.  We ARE at risk of having one quarter to one third of this country happilly escorting a corrupt gang of plutocrats and kleptocrats even higher up the mountain of wealth they’ve made for themselves.

  • Lori

     Rumblings of a culture war have been going on since Bush was in power.  For what it’s worth, I’m reasonably sure it’s not in the US national character to actually have an ideological shooting war, at this time or anytime soon.  

    I don’t think the issue is exactly American national character. Who had a shooting version of a culture war once already and I don’t think people have become fundamentally different in the last century and a half. 

    That said, if Americans take up arms against each other in the near future I don’t think it’ll be a Civil War-style culture war. It’ll be a Gangs of New York, Blair Mountain, Homestead-style class war. 

  • http://mistformsquirrel.deviantart.com/ JJohnson

    Indeed.  Much as I wish it weren’t so I’m afraid to rely on apathy to prevent bloodshed.   (Just as apathy makes me concerned for the future in other ways.)

    Blergh.  It’s times like this I start feeling “crazy survivalist mode” come on.  Like I need to be buying an AK47, thousands of rounds of ammunition, and a ton (literally 2000lbs) of canned food. >.<  Except given my mental health history* they aren't going to let me have the AK, even if I do all the legal stuff necessary.

    *Today I got a new medicine to help with my anxiety and depression… on the upside it has a very good success rate… on the downside it's an antipsychotic (no I'm not psychotic – it's just supposed to be useful alongside antidepressants, but it's classed as an antipsychotic so… yeah.)  I think that pretty much kills any hopes of joining the military I ever had.  Granted said hopes were already pretty much nonexistent due to the depression, but there was always the in-theory "get better, can be off meds for a year with doctor's permission" thing for 'maybe someday'.  Yeah I get the feeling that's gone.  Oh well.  I still has my writing and art. *blergh*

    /ramble ramble has been a bad day.

  • Anonymous

    I’ll spare you the ‘I was in the military, you’re not missing much’ spiel.  It’s not entirely out of the question still.  The final determination is made by DoD’s medical people and their ways and means are their own; its still worth the application.  As always, the worst that can happen if you don’t apply is that they say ‘no.’  The BEST that can happen if you don’t apply is that you tell *yourself* ‘no.’

    My experience in the military was overall positive, I have to admit, even though I was about as rear-echelon as one could get.  I was in the Coast Guard and I spent a grand total of eight hours aboard a USCG boat.  If you want, message me off-board and I can regale you with tales of living in uniform and why I left, left again, then left a third time. =)

  • http://mistformsquirrel.deviantart.com/ JJohnson

    Thanks Mink  I shall keep that in mind.  That’s encouraging.

  • Lori

     ramble ramble has been a bad day.  

    I’m sorry about the bad day and I hope the new meds are helpful. 

  • http://pulse.yahoo.com/_NYIMSCWWLA5XTAYXL3FXNCJZ7I Kiba

    I don’t have anxiety but I do know what it’s like living with depression. I really hope you get to feeling better soon. 

  • http://twitter.com/shay_guy Shay Guy

    How long till a law is passed saying that banks and their executives can’t be prosecuted for any kind of theft or fraud, period?

  • Consumer Unit 5012

    How long till a law is passed saying that banks and their executives can’t be prosecuted for any kind of theft or fraud, period?

    It’s more of a de facto understanding than an actual law right now….

    Speaking of utterly terrible legislation, this would be a really good time for the Great Compromiser to actually show evidence of being a vertebrate.

  • FangsFirst

    Speaking of utterly terrible legislation, this would be a really good time for the Great Compromiser to actually show evidence of being a vertebrate.

    I saw this appear last night via George Takei. Now, please be patient with me, but did ANYONE manage to explain how section 1032 doesn’t invalidate all of the fear based around S. 1253/S. 1867?

    (1) UNITED STATES CITIZENS.—The requirement to detain a person in
    military custody under this section does not extend to citizens of the
    United States.

    (2) LAWFUL RESIDENT ALIENS.—The requirement to detain a person in
    military custody under this section does not extend to a lawful resident
    alien of the United States on the basis of conduct taking place within
    the United States, except to thee xtent permitted by the Constitution of
    the United States.

    Unless I just completely misunderstand, it literally *cannot* be used against American citizens. Or even legal aliens.

    So, seriously, if somehow this is invalidated, please explain.

  • Anonymous

    Unless I just completely misunderstand, it literally *cannot* be used against American citizens. Or even legal aliens.

    So all they have to do to dispute their detention is to bring up their status at the trial they’ll never get.  That’s the problem.  When you’re packed away in a Guantanamo cell, how do you go about petitioning your false arrest?  You have no contact with the outside world, no recourse, no hope.

    That’s not even the whole point though.  Protecting citizens and legal immigrants isn’t good enough by our constitutional standards.  The bill of rights repeatedly uses the word people, not citizens.  There’s an exception from civilian trial in the case of prisoners of war which comes with its own set of rules, but there is no gray zone for illegal enemy combatants who we can just lock up forever because they’re foreign.  That is a violation of our founding principles and any ethical standard I’d care to live by.

  • Apocalypse Review

    Unless I just completely misunderstand, it literally
    *cannot* be used against American citizens. Or even legal
    aliens.

    Your faith in the law is touching, especially after having been under a government which, for the last decade, has effectively decided to abuse the legal process in such a way as to permit the kinds of things once thought unthinkable.

    As Astribulus notes, the legal mechanisms to dispute classification under the law basically don’t exist.

    So the law’s “protections” might as well be so much kleenex.

  • FangsFirst

    @3c80adb7b07e4daefcb1eb5cbebb67a1:disqus & @Astribulus:disqus:
    It’s partly how its been characterized. Takei framed it as “new interment camps” a la the japanese in WWII. It seems like it would be bizarre for someone to claim “Oh, well, you were living and working in the US, but we didn’t think you were a citizen,” where, yeah, if someone were abroad they could easily abuse it.

    And, beyond that, it’s mostly–to me–at that point, why be concerned about the law if the entire concern is the law being abused/ignored/flaunted?

    So, let me clarify: everywhere I googled on the subject, it was very “OMG they could lock you up tomorrow,” which seems, well, vaguely plausible, sure, but a bit of a stretch. Hell, consumer’s link says specifically: “Ask Obama To Veto Indefinite Military Detention of AMERICAN CITIZENS” which also implies “They will start taking people out of their homes like they did to the Japanese 70 years ago.”

    I’m not saying it sounds great and fabulous and a-okay, but it doesn’t seem to fit with the particular fear circling it. I feel like neighbors would notice people going missing, or coworkers, etc, so, sure, again, Americans abroad (and yes, that is bad, as is anyone, American, legal or otherwise), but it would be a little weird with regard to “Average American Citizens.”

  • P J Evans

     Some of the interned Japanese got draft notices (and some resisted the draft: look up the Heart Mountain draft resisters). Their fathers had registered for the draft in WW1. Actual citizenship was not a factor in their internment – most of the younger detainees were born in the US, had never been outside the US, and didn’t know much Japanese. (That’s in the records that were kept.)

    What’s missing from many news stories here is that the President (and his legal advisers) already believe the President has the legal power to order people imprisoned or even killed because someone somewhere says they’re possibly a terrorist, without it being run past a court and without possibility of the person under consideration having a chance to protest or appeal.

    Read this post:
    http://www.emptywheel.net/2011/12/02/why-the-iraq-aumf-still-matters/

  • http://blog.trenchcoatsoft.com Ross

    You know, waaaaaay back in the 80s, I saw a really panifully unfunny comedy staring Cheech Marin called “Born in East LA”.  The premise was that a native born US citizen — a veteran for that matter — of Mexican descent is caught without identification by a bigoted law enforcement officer. Since he can’t prove his citizenship, he’s deported to Mexico.

    Of course, that was just a joke; it’s not like the they’ve created a bunch of laws to make it *more* likely.

  • P J Evans

    In L.A., the police stop people who might possibly be undocumented immigrants on any halfway reasonable pretext. It’s called ‘driving while brown’. (The idea apparently is that people who are violating one or another part of the vehicle code and are brown must be undocumented, because otherwise they wouldn’t be violating the vehicle code. You probably can see the hole in the reasoning.)

  • Jenny Islander

    I remember that!  I didn’t think it was an unfunny comedy–more a drama with a lot of bitter humor-cum-political commentary.  The part where his cousin from Juanbobo de las Boonies is so ignorant that he thinks the answering machine is the voice of a statue of Jesus was over the top IMO, but the rest of it just seems to be a sort of El Norte for people who don’t want to be that depressed.

  • Anonymous

    The premise was that a native born US citizen — a veteran for that
    matter — of Mexican descent is caught without identification by a
    bigoted law enforcement officer. Since he can’t prove his citizenship,
    he’s deported to Mexico.

    Of course, that was just a joke;

    You know Marin’s inspiration for that movie was something that actually happened, don’t you?

    It was an American-born kid (I think he was in high school) who spoke no English who got deported.  Link to an article referencing, in passing, the original story.

  • Lori

     How long till a law is passed saying that banks and their executives can’t be prosecuted for any kind of theft or fraud, period?  

     

    Such a law will never be passed, not because it’s wrong and horrible, but because it’s both totally unnecessary and counterproductive. You don’t need a law saying that bankers are exempt from prosecution when no one is making, or is ever going to make, any attempt to prosecute bankers. Making it illegal to do so would simply call attention to the fact that they’re above the law. No need to risk getting the peasants all riled up for something that’s totally unnecessary. 

  • Anonymous

    I have several friends and acquaintances who call themselves ‘Evangelical’ or fundamental Christians.  Often they will sounds off on the importance of following God’s law when some story brings GLTT into the limelight.  Always telling me how the ‘Bible’ condemns homosexuality.  Of late I’ve been asking them why they are so silent on the sin of Usury?  The silence and rationalization is deafening.    

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Pat Garofolo: “Banks May Have Illegally Foreclosed on 5,000 Members of the Military“

    You know, this could be counted as aiding and abetting treason against the United States Government, if looked at a certain way. If this happened to the Joint Chiefs of Staff under a sufficiently bellicose military I wouldn’t be surprised to hear of tanks surrounding the banks in question.

    “I gave her my address, because I bought a home out of foreclosure three
    years ago this month,” Knapp said in his report. “It took her all of
    about five minutes to call up the documents and identify the problem in
    the chain of title. The Attorney General’s office confirmed to me that I
    don’t own my home because of bogus signatures and improper filings.”

    What was Hernando de Soto gushing over again? The transparency and clarity of well-documented ownership over assets and an easily ascertained chain of title from one owner to the next?

    And didn’t he imply that corruption in Third World and post-Communist countries was partly due to unclear title?

    Gosh, y’know, that could never be a problem in the USA, could it? :P

  • Risser

    Yes, Fred,
    But what do we do about it?

    I’m tired of people cataloging all these injustices and pointing at them and saying “See, see!  It sucks!  It sucked before and it’s still sucking.  It SUCKS!”

    What do we DO about it?
    Peter

  • http://stealingcommas.blogspot.com/ chris the cynic

    Move your money if it’s in a bank that does evil.  Vote for people who are in favor of regulations on banking.  (Electing Elizabeth Warren if you happen to live in Massachusetts is probably a step in the right direction, for example.)  Uh, I honestly have no idea beyond that.

  • CharityB

    And don’t think it’s okay to only vote in Presidential elections. A lot of damage can be done because a lot of people with progressive political views tend to stay home in ‘off-year’ elections. And don’t think that it’s okay to ignore state and local elections. The swiftest action against abuses by the financial sector is going to come from state Attorneys-General and state and local authorities (such as sheriffs, city councils, etc.) They can move much more quickly than federal authorities and have more legal authority to enforce changes and ensure accountability.

    Just one example of this: Massachusetts’* AG, Martha Coakley, just filed a lawsuit against Bank of America, JPMorgan, Wells Fargo, Citigroup, and Ally Financial over their “unlawful and deceptive conduct in the foreclosure process, including
    unlawful foreclosures, false documentation and robo-signing.”

    It’s important to support people like her when they run for office because you know the big banks are going to try to hammer her as soon as she’s up for reelection.

  • http://twitter.com/mattmcirvin Matt McIrvin

    I still have an animus against Martha Coakley for running a miserably poor Senate campaign against Scott Brown, and for doing ridiculous things during the great Mooninite Lite-Brite terrorism scare of 2007.  But this is a good step.

  • http://mistformsquirrel.deviantart.com/ JJohnson

    This too, absolutely.  I’m really hoping 2010 was a wake up call for some of us younger progressives who thought 2008 was a permanent overturning of the status quo.  Sadly, George W. Bush was a symptom, not the source of our problems.

  • Anonymous

    We can move our money to the banks where they don’t do that (most likely to credit unions). We can avoid taking credit for the consumption (if it’s possible for one, that is). We can demand justice for the frauds and thiefs – and try our best to get rid of corrupt judges and politicians. We can stop admiring people who got their money in a socially harmful way (and propably illegally), and instead start promoting good kind of success (like managing to help many people or getting richer through hard work).

    We can do those things and many more. But the problem is that none of them is guaranteed to do anything (other than minimizing being part of the problem). And at least we do something.

  • http://mistformsquirrel.deviantart.com/ JJohnson

    Here’s my take –

    We need to grab the Overton window and give it a hard yank left.  This is part of how we do that.  Pointing out the malfeasance of the powers that be.  Over, and over, and over, until it sticks.

    I know it’s frustrating because this is not a quick process – there’s no “Do this one thing and everything will be fine” solution;  we have to do exactly as the Republicans did:  Spend 30 years fighting and chipping away at the edifice to greed they’ve erected.  We need to push for every inch of ground we can get everywhere we can get it.  The problems we have today didn’t come overnight, and sadly, neither will the solutions.

    So that’s my advice – keep doing what you’ve been doing, challenge conservatives on their talking points whenever you can, and try to get people who’ve never voted before to A) Pay attention to the issues and B) Vote.

    I think one of our great enemies is pervasive nihilism and the ultimate hopelessness wrought by a political system so heavily skewed against Joe and Jane Average.  So to win, we have to fight that to.

    Or in short:

    We win by not giving up and remembering that this is a long, long war.

  • cjmr

    You go, Martha!

    (I’m really, really, glad that when we moved last year we were able to find a house we could afford to buy that wasn’t a foreclosure.  75% of the houses we looked at were foreclosures or short sales.  If I had bought a house and later found out that it had been taken illegally from the previous owners, I don’t think I could in good conscience continue to live there–no matter whose side the courts came down on–no matter how big a loss I’d be taking to return it to its rightful owners.)

  • Cathy W

    The thought has crossed my mind that this is one reason the Powers That Be are reluctant to actually address foreclosure fraud in a meaningful way: they might “discover” that the owners of a distressingly large fraction of the nation’s residential real estate don’t have clear title, and they’d rather not know that. What’s a few people put out of their homes in the name of keeping up the illusion that the system works?

    (I’m right there with you on wanting to avoid buying a foreclosure, for that reason…)

  • 2-D Man

    One idea that’s been bouncing around my head recently is a public-option credit card (maybe I got the idea from someone around here). A government-owned corporation makes a credit card to compete with the for-profit credit cards. They’d feature a drastically lower interest rate and charge interest on the principal owed instead of the largest debt.

    The way I see it, credit card companies don’t actually produce anything, they just provide a way of paying for things, which is the government’s job.

  • Guest

    I was very startled by the first article – as a software engineer, I had a hard time picturing “programming fraud into the software”.

    So, I asked my dad about it, since he was a technology executive at Wells Fargo’s mortgage division for a while. He usually has pretty scathing things to say about the greed, stupidity, and incompetence of mortgage lenders that led to the collapse, and (in my obviously biased opinion) is a person of very strong integrity.

    He said:

    “The above on MSP is pure bullshit.  MSP, along with other systems that
    servicers use, enables application of loan payments in a variety of
    ways.  Some of it is in the rules you set up, some is in systems in
    front of MSP that codes the payments.  I know that at Wells Fargo we
    were fanatical to set up the system to match the notes, and we had
    regular audits by many folks — internal audit, fannie, freddie, fha,
    etc…— that tested this, among many other things. It’s certainly
    possible that some smaller or subprime servicers didn’t get this right,
    they didn’t have the controls in place, or they actually committed fraud
    intentionally, but I’ve seen no evidence of that yet.   Of couse
    programmers never conspired to steal money from customers!”

    So, I wouldn’t take Mr. Stoller’s column entirely at face value.

  • Anonymous

    No disrespect meant towards your father, but it looks pretty legitimate.  Following the links back to their source is a ruling by US bankruptcy judge Elizabeth W. Magner.  The software in question belongs to Lender Processing Services (LPS).  From the ruling:

    The hearing on the Motion for Sanctions provides yet another piece to
    in the puzzle of loan administration.  In Jones v. Wells Fargo, this
    Court discovered that a highly automated software package owned by LPS
    and identified  as MSP administered loans for servicers and note holders
    but was programed to apply payments contrary to the terms of the notes
    and mortgages.  In  In re Stewart, additional information was acquired
    regarding postpetition administration under the same program, revealing
    errors in the methodology for fees and costs posted to a debtor’s
    account.  In re Fitch, delved into the administration of escrow accounts
    for insurance and taxes.  In this case, the process utilized for
    default affidavits has been examined.  Although it has been four (4)
    years since Jones, serious problems persist in mortgage loan
    administration.  But for the dogged determination of the UST’s office
    and debtors’ counsel, these issues would not come to light and countless
    debtors would suffer.  For their efforts this Court is indebted.

    For the reasons assigned above, the Motion for Sanctions is granted
    as to liability of LPS. The Court will conduct an evidentiary hearing on
    sanctions to be imposed.

    Also, as a software engineer myself I can picture any number of ways fraud could be programmed into software, intentionally or otherwise.  You could cut some unscrupulous coder in on the deal, of course, but most of the ways simply involve tweaking the business requirements and use cases in the right manner.  Without the proper mortgage background, the programmers need never know their application steals millions.

  • P J Evans

     Doesn’t mean that it can’t be done, or that someone didn’t change the system from honest to dishonest programming.

    Besides which, there are already known cases where banks did their accounting in such a way that fees were charged before crediting deposits that were made before the fees should have been applied. (Someone beats the check to the bank and makes the deposit, and the bank holds the deposit till the end of the day, and charges for the check that shouldn’t have bounced before the end of the day.)

  • http://blog.trenchcoatsoft.com Ross

    I can very easily imagine exactly how this could have happened, because I’m a software engineer.

    I imagine that what happened was that about three fourths of the way through their delivery schedule, the programmers did a demo for the clients, and someone in the audience noticed that it was allocating funds in the wrong order.  And he raised his hand and he said, “Say, what order does it allocate funds in?”

    And the demo engineer looked a bit confused and said “There wasn’t anything in the requirements about the order.” And he looked at the technical lead, and the technical lead scratched his beard (As a technical lead, you’re contractually required to grow a beard for demos.) and grunted, and said “That’s a tree set. They’ll process in the natural sort order for the underlying data type.”

    Seeing the look of panic on the face of the customers, the demo engineer quickly covers by explaining, “He means alphabetical order by name.”

    “You can’t do that!” says the customer, worried, but he’s silent by a nudge from the guy with the corner office who no one really knows exactly what he does all day, and whose hair is considered a fire hazard. 

    “This’ll work,” says Mister Slick. “But, uh. You’ve got the category names wrong. Yeah. Industry jargon, I wouldn’t expect you to know. But they’re really called “Yinterest” and “Zrincipal”.”

  • Don Gisselbeck

    That some how needs to be treated as theft. Of course; “steal the coal from along the tracks-go to prison, steal the railroad-get a knighthood.”

  • Lori

     Doesn’t mean that it can’t be done, or that someone didn’t change the system from honest to dishonest programming.  

    I remember the changes that has to be made to implement Sarbains Oxley. They rolled out the changes and they weren’t being stupid about it or anything, but the implication was “and now no one can cheat”. I looked at my coworker and we both did the eyebrow thing. After the meeting we compared notes and found that between the two of us, without even trying hard, we had 4 or 5 ways to get around the system in our area alone. And our are was tangential to finance. 

    My point being that yeah, systems are programmed by programmers. They know software, but they don’t know the job for which the software is being used. That virtually always leads to loopholes that can be exploited by someone who does not the job and has an inclination to cheat. 

  • P J Evans

    Even without intent to cheat, the systems can be broken in interesting ways.

    I deal with a GIS system at work. We’re trying to get it to where we can track the source of every piece of information that goes into it. Getting people to understand and do it correctly is… a long, tedious job. (‘2 is not informative. Please put ‘2 x at this location’.)

    I can imagine that programming banking systems is similar.

  • Apocalypse Review

    http://www.businessinsider.com/standard-of-living-middle-class-2010-10

    When an ostensibly business related magazine is reporting on a dropping standard of living, there is definitely a problem and it’s getting too big to ignore.

  • http://twitter.com/FearlessSon FearlessSon

    What I really wish happened to the banks was that the government would forcibly convert them into non-profit organizations, repossess the assets of the executives and majority shareholders, and reinvest that money back into company which would directly benefit the now-stakeholding members.  

    The problem is, and has been for a long time, the centralization of wealth.  Our government is set up in such a way as to prevent the centralization of direct power, through our checks and balances, popular public elections, and multiple branches.  However, as much as the founders foresaw a need to prevent the centralization of political power, they did not prevent the centralization of financial power, which is proving to be much more of an influence than any particular political office is.  

  • http://mistformsquirrel.deviantart.com/ JJohnson

    That right there is brilliant, I think.

    Not-for-profit public banking makes a heap of sense in a lot of ways too when your entire purpose is simply “Provide a service.” instead “Make money by providing a service”, you tend to well.. provide a better service and/or lower costs to the people using that service, since the only goal is to break even.

    Theoretically that could mean super-low interest rates on loans* — or heck, make income-based repayment on loans a normal feature.  That way quite literally anyone could own a home within reason – that takes power from landlords so they can’t just jack up the rates – you go to high and your tenants are like “screw this I’ll just get the damn loan.”

    I mean I admit I may be missing something crucial but… you are giving me idea FearlessSon.  I like it!

    *I’d say none, but I’m not sure if that’s practical with inflation… but I’m also not an economist so I don’t know.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Probably as a rough guide the projected inflation rate plus a percentage point or so to take care of default risk, late payments, etc.

  • Don Gisselbeck

    Have they tried to deport any Native Americans yet?

  • Amaryllis

    In passing…there was a brief article in my local paper (although I believe it was a Reuters piece, not local, sigh) about homeless people sharing the various Occupy camps. And one guy was quoted as saying that he wasn’t entirely sure he agreed with the OWS as a movement, but he liked staying with them because, “When I get back from work, my stuff is still there.”

    And all I could think was, “why does someone who has a job have to be homeless in the first place?”

  • Anonymous

    why does someone who has a job have to be homeless in the first place?

    I hear that, of the thirty-odd beds at the local interfaith men’s shelter, over thirty are consistently filled by men with jobs.

  • Amaryllis

    Something is very, very broken here.

    ETA: I mean, I already knew that having a job is no gaurantee of being able to find an affordable place to live. But it shocks me all over again every time.

  • Anonymous

    Gee, you think?

    Mind, part of the problem is that a job that pays $12 an hour, such as mine, only pays enough to rent the cheapest apartment in the area ($400 a month, not big enough for a second bed in which someone to split the rent with might sleep) if one has zero debt to pay. And who has zero debt to pay? And note please that $12/hr is most of twice minimum wage.

  • Lori

    In the area where I live a person working a full time job that pays $12/hour could afford a pretty nice. The catch is, good luck finding a full time job that pays $12/hour.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    Something is very, very broken here.

    ETA: I mean, I already knew
    that having a job is no gaurantee of being able to find an affordable
    place to live. But it shocks me all over again every time.

    Back in the mid 2000s when everybody was praising Alberta as this mega jobs mecca because of all the oil and gas, quite a few people found out that they couldn’t afford to live in a house or an apartment because housing prices began skyrocketing, especially in Calgary.

    The spotlight got turned on that especially when Alberta’s then premier, Ralph Klein, got drunk, showed up at a homeless shelter, called them all useless bums, and threw money at some men there.

    Turned out quite a few of them did indeed have jobs – just couldn’t afford rents pushing $3000 a month in some places of Calgary.

  • Lori

    Both your 2nd & 3rd paragraphs had my eyebrows headed for my hairline. Dang.   

  • Anonymous

    It’s like a mirror-universe Jakov Smirnoff joke: “In capitalist America, bank robs you!”

  • Anonymous

    Except given my mental health history* they aren’t going to let me have the AK, even if I do all the legal stuff necessary.

    Buy one at a gun show, they don’t do background checks.  Of course, you’ll need a special liscense for full auto, but the semi-auto version just has a small interrupter that can be removed easily enough, IIRC.  And if you don’t actually modify it until D-day, it’s not actually illegal!
    Isn’t it wonderful?

    The premise was that a native born US citizen — a veteran for that matter — of Mexican descent is caught without identification by a bigoted law enforcement officer. Since he can’t prove his citizenship, he’s deported to Mexico.
    Of course, that was just a joke; it’s not like the they’ve created a bunch of laws to make it *more* likely.

    I’d think the Mexican government would notice at some point, at the least…


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