Blissed or Pissed?

Raise your hand if you still believe our system of democratic rule is, in any real sense, a government of the people, by the people and for the people. Okay, those with your hands up really need to pay attention. Government of the people is a fantasy. It no longer exists, unless by “people” you mean the super-rich and big corporations. You and I and all the rest of the average working folks have been sold up the river so many times by so many people that we have become largely irrelevant to the process.

By whom have we been sold out, you ask?

  • By the Supreme Court, which in early 2010 removed restrictions on how much money corporations could contribute to election campaigns, ensuring that those of us without millions of dollars to donate to political campaigns mean nothing to the people we send to Washington or to our state legislatures.
  • By Congress, where business as usual means members serve on committees making key decisions about legislation directly affecting companies and individuals who have paid millions for those same legislators’ campaigns. (Take, for example, Sen. Charles Schumer (D-NY), powerful member of the Senate Banking Committee, defender of Wall Street and the top recipient of campaign contributions from the finance industry in the 2010 election – more than $2.7 million!)
  • By lawyers and judges who neglect to question whether mortgage loan servicers’ paperwork is accurate before finalizing foreclosures – even after the terms “rocket docket”  and “robo-signer” became part of the public lexicon.
  • Even by notaries public, those helpful public servants charged with witnessing signatures and attesting to their validity on all sorts of documents (including the paperwork borrowers complete to purchase their homes.) Now it seems some notaries are selling their services to companies that manufacture fake foreclosure documentation, validating documents they never saw signed.

And, if you’re a homeowner in Arizona, you were quite blatantly shafted this spring by two of your elected officials

The first incident involves a bill introduced by a state legislator, Rep. Michele Reagan, who got into a little brouhaha with her mortgage lender over who owns the mortgage note on her home. Her lender sued her just for asking! Based on that experience, she introduced legislation that would have required mortgage lenders to provide clear chain of title before foreclosing on Arizona homeowners.

SB 1259 would have stopped the banks in this non-judicial foreclosure state from simply being able to declare a foreclosure and hold a trustee’s sale without ever producing the paperwork that proves standing to do so. Seems reasonable (so much so that you’d think it would have already been required!) and was likely to spread to other non-judicial foreclosure states if it passed her in Arizona.

The bill got off to a great start. Back in February, SB 1259 was voted out of the Senate Banking and Insurance Committee 4-0 and passed the Republican-dominate state senate 28-2. Yippee for Arizona homeowners.

Then, a funny thing happened to the bill on the way to the state House of Representatives.

In the last days of the legislative session, I went looking for news of the bill and found it had morphed into a bill about fire districts? What?! I emailed Rep. Reagan to ask, and she actually emailed back the same day.

“I was so thrilled when this bill passed in the Senate 28-2.  However, the banking industry lobbyists were way ahead of me and basically had the bill killed in the House before it ever even got over there.  Since the underlying bill (the “proof of ownership” portion) wasn’t going to pass Committee in the House, the bill was changed to be a bill to fix a fire protection issue for the town of Rio Verde.  So, the original SB 1259 that you are referring to is dead.”

How does a bill just disappear? I don’t  know the rules behind the bureaucratic hocus-pocus that allows our governing body to do that, but you can read the minutes of the March 14 meeting of the House Committee on Banking and Insurance where the committee voted to approve the “strike-everything” amendment that killed the foreclosure-oriented version.

And you can watch a video clip of the meeting in which the committee chairwoman, Rep. Nancy McLain, announces she had no intention of hearing the bill that was so overwhelmingly supported in the Senate.

Why, you might ask? Well, according to a statement posted on her website, it seems she just didn’t want to give all those poor homeowners false hope that they might save their homes from the big banks’ foreclosure factory.

But, if you read just a bit farther, I think you’ll find the real reason is that – surprise, surprise – she was gotten to by the financial services industry. “It also opened an avenue for those who simply did not want to fulfill their obligation by potentially creating a loophole that could take years to resolve.”

That’s a line straight out of the banksters’ lexicon, right there with calling the people seeking mortgage modifications “deadbeats” and nattering on that borrowers didn’t qualify for mods because the “failed to submit the necessary paperwork.” She also tells a news reporter that she talked with bank lobbyists about the issue.

That’s pretty bad, even for Arizona politics, but at least it follows the usual pattern. We all know that big business pays big bucks to lobbyists to persuade legislators to act in their favor, writing and supporting for laws that aid a specific industry and killing those that don’t.

But … it seems that the banks may have been so desperate to keep Arizona from requiring real foreclosure paperwork that they took a more direct route with the next legislator who looked likely to join the fray.

After SB 1259 disappeared, a Phoenix real estate guy named Darrell Blomberg got into the game. He is listed in the abovementioned minutes of the House CBI committee as a supporter of the original SB 1259. He’s also apparently waging a personal foreclosure fight.

He worked with state Rep. Carl Seel to add the same type of language as an amendment Senate Bill 1474, which dealt with landlord/tenant issues. (Seel is a member of the committee McLain chairs.)

But on the day he was supposed to introduce the amendment, it seems Seel was a no-show. Interviewed by a Phoenix TV news reporter, he mumbled something about deciding not to go forward with the amendment because it wasn’t germane to the bill. Not germane? Since when does that matter? Look at all the unrelated stuff that gets tacked on to bills all the time.

Now it might be complete coincidence, but apparently just two days before he was to have initiated the amendment to help Arizona homeowners Seel got the holy grail of mortgage modifications – a principal reduction mod that slashed more than half what he owed on his own home.  I don’t know about you, but I’d say that was pretty germane to the issue at hand. Kinda looks like the bank cut out the middle man in this instance and went right to the source.

If you still have your hand up after reading this, well, maybe I envy you just a little. Ignorance is bliss, after all.

Update 6/2/11: Bravo to the Oregon legislators who are still working to help that state’s homeowners fight foreclosure fraud. Arizona lawmakers have closed up shop and gone home for the summer, leaving their constituents high and dry.

Read more:

Legislative Detail: AZ Senate Bill 1259 – 50th Legislature

SB 1259 – Arizona Foreclosure Legislation

Remember “Goodnight Banks”? Goodnight America
Follow-up On Ms. Reagan And Ms. McLain From Arizona

Arizona State Rep Ms. McLain (R-3rd): A Putrid Viper

Fire! Fire! Fire! Arizona’s Magically Transformed (And Gutted) Foreclosure Bill

We the people deserve to know what happened to SB1259

Flying Pigs and An Economy With No Pants

Why are the banks running scared from the not-yet-consummated Consumer Financial Protection Bureau and its primary organizer, Elizabeth Warren? Why are they having their shills in Congress working either to shut down the agency before it even starts work or to render it irrelevant?

If they’re doing business in ethical and legal ways, they should not spare a single thought about an agency aimed to ensure the financial services industry deals fairly and honestly with consumers. Ethical, honest, professional company executives should welcome assurances that their fellow institutions will also have incentive to do business appropriately and legally. That should level the playing field for the industry and consumers, right?

Instead, they’re screaming, yelling, crying “wolf” and basically calling attention to their intention to do exactly the opposite of dealing fairly and honestly with customers. They want to go on as they have been cheating, lying and perpetrating enormous fraud for gigantic profits. Can you say global financial crisis? Foreclosure fraud? Robosigning? Record profits? Bailout? Too big to fail?

They might as well be wearing shirts festooned with statements like, “We want to go on getting rich, rich, rich by screwing our clients, the nation and the world. Bwa, ha, ha!”

Fear of real, meaningful oversight of their business practices = serious guilt regarding their future plans.

Turns out Jon Stewart of The Daily Show wants to know what their problem is, too. He asked that very question of Warren, presumptive head of the new CFPB, on his show recently.

She was talking to Stewart  about how the fight to create this agency designed to help average folks make informed decisions about their financial futures has moved out of the open, after July 2010’s Congressional vote to pass the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“The fight moved from Main Street to the dark alleys. So now the game is let’s just see if we can stick in the knife in the ribs of this consumer agency. So now there are bills pending in Congress to delay the agency, to defund the agency, to defang the agency – make it toothless so it won’t get anything done – and bills in both the House and the Senate to kill the agency outright before it is ever able to take one step on behalf of middle class families.”

Stewart’s question: “It does make you wonder what their great fear is … what is their ultimate gain unless they are that craven?”

He went on to say he just couldn’t believe the executives running the big financial institutions are that craven. Well, he’s a pretty smart guy so I have a sneaking suspicion he actually does believe it. I sure do, based on my experiences with Wells Fargo over the past year.

And all the lying and cheating and fraud that brought the economy to its knees a year-and-a-half ago and took homes from 1 million families in 2010 was aided and abetted by our elected officials. By senators and representatives whose seats were bought and paid for by campaign contributions by the financial services industry. By government agencies and committees who set up toothless and meaningless regulations ignored or manipulated by their cronies running the biggest banks and investment firms.

It’s all ludicrous and the situation begs for some real objective regulation by an entity beholden to no party or industry and armed with the power to enforce.

Why? Because asking industry insiders to self-police is never, ever an effective way to ensure ethical behavior. Because rules and regulations backed up with absolutely no enforcement are never effective. Duh! Isn’t that how we got where we are now? Multiple agencies with regulation responsibilities they just blew off? Travesties like the failed Home Affordable Modification Program that allow the banks to completely ignore the established guidelines and jerk around people just trying to do the right thing and get a little help so they didn’t lose their homes?

Seriously … who in his or her right mind believes that putting the cat in charge of the canary is ever going to work out for the canary?

Do we put fifth-graders in charge of school curricula and discipline? How ’bout if the inmates have the keys to the prison cells? And greedy business executives are sure to make choices that benefit their customers instead of simply lining their own pockets. Right. About the same time you look out your windows and see flying pigs.

Seems the banking industry and its political party of choice would like us to pretend we see those hovering porkers. From The Colbert Report last May, here’s Warren’s description of the way many Republicans who opposed the CFPB wanted to maintain the status quo:

“The idea behind the Republican consumer agency is that they will take the heads of all the agencies that failed and brought us to this economic crisis, the folks who were asleep on the job and didn’t protect consumers, and they’ll put them in a committee and put the committee in charge.”

Colbert’s response: “Why do we need reform?  Why do we need to regulate the banks? Don’t we have bank regulators now? Why do we have to wear a belt with our suspenders? We already have one set of regulators.”

Warren’s priceless answer: “No, actually right now we don’t have any pants on.”

More info:
The Future of the Consumer Financial Protection Bureau
The Big Banks’ Battle Against Consumers and Homeowners
GOP House Blocks Bid To Name Elizabeth Warren Head Of The Consumer Financial Protection Bureau

Update 6/6/11:
How the Big Banks Push Republicans and Sell-Out Dems to Attack Elizabeth Warren (Even as Progressives Push Back)