Neither Obama nor Romney Will Take on the Big Banks

I keep telling people it doesn’t matter anymore who wins the presidential election because the powerful people in government – federal and state – take billions of dollars in campaign contributions from Wall Street, corporate CEOs and the banking lobby.

And they don’t care that your mortgage banker lured you into foreclosure and then took your house. Really. They don’t.

Sure, there may be a few legislators who try to serve the interests of the average citizen. But their efforts disappear in the landslide of greed and ego and power that runs this country now.

I know it feels good to imagine that an Obama second term would make a difference. That he would just be a good, ethical man with no more offices to run for so he could afford to thumb his nose at the banksters. That he would send the Justice Department out to actually prosecute the people who brought down the U.S. economy. That all those programs supposedly created to help homeowners ward off the foreclosure feeding frenzy would suddenly gain new life, with clear-cut guidance on who qualifies, a fair review process that doesn’t take years and use up several reams of paper, and meaningful punishment for banks that lie to and cheat borrowers.

I’m sorry, but if you’re not looking out your window right now at a whole herd of flying pigs, I just don’t think your wish is going to come true.

Don’t take my word for it, though. Here’s what former Wall Street exec. and veteran journalist Nomi Prins has to say. Warning: it’s not pretty, but it is well-reasoned and clearly stated.

“Washington coddles and subsidizes the biggest banks – not to encourage lending, not to encourage saving, and not to better the country, but to contain harsh truths about how badly banks played, and are still playing, the nation.”

Read the full piece, Before the Election was Over, Wall Street won. Then weep.

Gov. Brewer, AG Horne Steal Hope & Dollars From AZ Homeowners

Geez, If you’re an Arizona homeowner trying to fight your way through the big banks’ foreclosure feeding frenzy, you’re really fighting on your own. You already know the federal government has sold you to the highest campaign contributor.

The Arizona Legislature won’t help you. They belong to the bank lobby and failed to pass legislation that would have forced banks to prove they actually own the properties they’re seizing in non-judicial foreclosures.

The Arizona Department of Housing provides no help, because it designed its Save Our Home AZ program, which is supposed to distribute federal funds to homeowners in the states hardest hit by the foreclosure crisis, actually NOT to help the vast majority of homeowners.

The Arizona Supreme Court can’t help you. Apparently there just aren’t any enforceable laws left that rein in the excesses of the big banks that routinely complete non-judicial foreclosure without having to prove they hold the original note.

Now Gov. Jan Brewer and Attorney General Tom Horne have allowed the state legislature to appropriate $50 million that was supposed to help people cheated and lied to by their mortgage loan bankers and servicers.

Need I mention this outright theft was fully sanctioned by the ever-helpful (to the banks) Arizona judiciary in spite of the efforts of various homeowner advocacy groups and against the advice of mainstream media , federal legislators and even real estate professionals.

Seems AG Horne wasn’t really working for Arizona’s homeowners when he took part in a 49-state non-investigation of the banks’ wrongdoing. He was really trying to pad the state general fund, even though his own information page on the settlement doesn’t seem to mention that part.

“One of the legacies of the housing crisis is a failure to provide meaningful assistance to the millions of homeowners across the country who lost big on their homes. We bailed out Wall Street, but did nothing for borrowers, who often waited for loan modifications that never came. That’s one reason we strongly disagree with the diversion of $50 million from a fund that was supposed to be applied to foreclosure assistance, but instead is being used for the state budget.”  ~Arizona Daily Star op-ed

If misery really does love company, at least Arizona isn’t alone. Looks like only 23 states are using all or most of the settlement dollars for the purpose they were intended – to keep people in their homes. The rest are taking some to most of the money to balance their budgets for the year.

“The Arizona Housing Alliance estimates that $50 million could “provide 75,000 troubled homeowners with housing counseling and 10,000 homeowners with legal assistance.” That’s just a sampling of the kind of things that could be done with these settlement funds if they were put to their actual purpose.”  ~ David Dayen, Firedoglake

Sorry Arizona homeowners. Ever since Terry Goddard left office, we’ve been pretty much been thrown under the bus by all the officials who are supposed to be acting in our best interest. All I can say is good luck trying to keep your home against all the odds. And please vote more wisely next time.

 

Moral Hazards of Mortgage Modification

I don’t know a thing about this law firm and I’m not recommending you do business with it, but there are some real truths and a load of informative links here.

Moral Hazard: Missing Ethics in HAMP Mortgage Modification Program

The 2008 bailout of the American financial industry was based on a law enacted by Congress, Emergency Economic Stabilization Act of 2008 (TARP).   Under rushed and pressured emergency conditions, Congress passed the legislation with very little understanding of why the economy was crashing.  There was a sense that the housing boom had something to do with the urgent need for a bailout, so provisions were added that required the bailout trickle down to millions of American homeowners who were given suspect mortgages.  The spectacularly failed mortgage modification program now known as HAMP is part of this law.  HAMP was authorized by sections 101 and 109 of the Emergency Economic Stabilization Act of 2008, which was later amended by 7002 of the American Recovery and Reinvestment Act of 2009.

Because no help was actually extended, most do not realize that the bailout law demanded real relief to the American people not just the financial industry.  To this day, the funds earmarked to help hardest hit families have largely gone unspent.  Programs, presented as a last hope and help, like HAMP, are now being exposed as a way for banks to deplete savings, 401k, and other assets from millions of families.  HAMP leaves families worse off more often than not, owing more, trapped in a home with higher mortgage debt and worse loan terms in the long run.  Sheila Bair, before she stepped down as the chairman of the FDIC, was an outspoken critic of chain of title problems caused by mortgage banking fraud and other foreclosure fraud tactics.  She even called for a Superfund to help American families who have saddled with unsustainable, fraudulent, toxic mortgages.

Bair’s new book, “Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself,” explains that HAMP was intended to cheat borrowers, to string them along and drain their savings and eventually foreclose on their homes.  This truth is even more strongly echoed in Neil Barofsky’s recent book, “Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.”  In Barofsky’s book, he explains how it dawned on him that the post-bailout goal of the U.S. Treasury was to allow banks to take dwindling wealth of American families while offering false promises of loan modifications all in a continued effort to increase the banks’ health and value.  Barofsky’s realization came to him during a contentious conversation he had with Tim Geithner, the Secretary of the Treasury, when Geithner expressed satisfaction that HAMP was allowing banks to coast gently down after the financial crisis instead of crashing since the American families “foamed the runway” for the banks.  Later, Geithner blocked attempts to use TARP funds to help families cover legal costs to defend against fraudulent foreclosures.

Often modifications do more harm than good.  Many programs are actually designed that way.  Please do not sign another contract with the same financial industry players that caused so much misery without having a lawyer on your side, protecting your interests.

Want more truth about how homeowners were set up by Wall Street and our so-called representatives in government? Here’s Sheila Bair recently on The Diane Rehm Show.