Author: Matthew G. Saroff

Your Bank Foreclosure Fraud Update

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Alan Grayson connects the dots

The lede here has to be that the Ohio Attorney General has sued GMAC mortgage:

This is big news. I just got off a conference call with Richard Cordray, the Attorney General for the state of Ohio. He has filed a lawsuit in Lucas County (Toledo) Common Pleas Court against GMAC Mortgage and their parent company Ally Financial, in a suit which names Jeffrey Stephan, the infamous “robo-signer” who signed off on up to 10,000 foreclosures a month across the country with affidavits, without verifying the information in the foreclosure documents. The lawsuit alleges fraud on the part of GMAC, along with violations of the Ohio Consumer Sales Practices Act, in filing false affidavits to mislead the courts in what they describe as “hundreds” of Ohio foreclosure cases. And, the Attorney General is treating every single false affidavit filed in an Ohio court as a separate violation, with a fine of up to $25,000, plus additional restitution for the homeowner of an unspecified amount.

This is a major lawsuit, and as Cordray told reporters, “We’re at the beginning of this, not the middle or end, and we’ll see where it leads us.” For context, approximately 450,000 foreclosures have been filed in Ohio since 2005, and potentially all of them used this robo-signing process. At the outer edge of this, if every one of those foreclosure processes is seen as a single case of fraud, the fines for the entire lending industry would add up to $11.25 BILLION dollars, just in the state of Ohio, not including the extra restitution for homeowners.

Cordray is also requesting information from the other major lenders, and has moved for an injunction against GMC, so it looks like this snowball once he gets to discovery.

Additionally, we have more calls for investigations and a moratorium, with both Nancy Pelosi,the Republican Texas Attorney General Greg Abbott, and North Carolina Attorney General Roy Cooper raising concerns. (talk about the odd couple)

Congress has weighed in, sort of, with an unexpected vote in the Senate a week ago approving an electronic notary law which, at least according to Jennifer Brunner, the Ohio Secretary of State, increases the possibility of fraud by creating a credit card style race to the bottom in terms of legal standards.

This growing furor may explain one of the peculiarities of the property meltdown, why banks seem to favor foreclosures over short sales even when the former generate more money.

I was unaware of the fact, but the standards for titles are much lower in the event of a foreclosure sale:

If you know anyone in real estate, you have bumped into countless frustrated agents who were attempting to complete shortsales for their selller clients only to have the whole thing fall apart at the last moment and then they later see the same property go into foreclosure for LESS than what the pre-approved shortsale buyer had offered just weeks earlier. Why, why, why, they moan. Why would a bank or mortgage servicer take less than what they could have had?

Well, now I wonder if one potential answer doesn’t have something to do with the types of deeds that get conveyed in a foreclosure and the tie to title insurance. In foreclosures in many states the buyer obtains a specialized deed – a special warranty deed, or a bargain and sale deed which make fewer guarantees for the buyer than the general warranty deed which is transferred in a normal sale(which I believe a short sale still falls under)

………

Is it possible that the foreclosers realized it was in their best interest to abort short sales in favor of foreclosures in order to pass the more limited deeds conveyed in a foreclosure? Did that decision come back to haunt them once the entire foreclosure process itself became highly suspect and publicized? (There is already a large title insurer who is denying title insurance on some foreclosures.)

Of course, the real elephant in the room is that anyone who has gotten a mortgage in the past decade* is just as likely to have problems with their title.

Foreclosures do not create title problems, foreclosures merely reveal those problems.

This is going to be uglier than David Boehner in a thong.

*Full disclosure, like me.

Teabaggers Hate Puppies

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No, I’m serious. I’m not joking, and it’s not The Onion.

I mean that they have come out in favor of abusive puppy mills in Missouri.

Why are they doing this? Because puppies are just like cattle to Teabaggers, because, I guess, They Eat Puppies!!1!!

Again, really, I’m not joking:

A conservative group in Missouri is picking up the backing of the Tea Party and Joe The Plumber in its quest to stop the Humane Society of the United States (HSUS) and other animal rights groups from passing “radical” anti-puppy mill legislation.

………

The Alliance For Truth also has the support of some better-known conservative activists, like Joe ‘The Plumber’ Wurzelbacher, who wrote on the Alliance For Truth site that the HSUS is “cowardly hiding behind animal cruelty, lying to our citizens and taking our constitutional rights away – one state at a time.”

He continues:

This bill forces breeders to limit the number of dogs they can own – regardless of care. Think about this a minute . . . . Should the government have the right to limit the number of houses a realtor can sell? Or the number of cattle a rancher can raise?

To serve puppies, it’s a cookbook!!!!!

<Facepalm>

Supreme Court’s Citizen’s United Case Allows Foreigners to Contribute to US Campaigns

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What a surprise. The US Chamber of Commerce is raising millions of dollars in foreign contributions, and spending them on political activities, though they are claiming that they are claiming that it’s on the up and up:

The US Chamber of Commerce has responded to this post in a statement to the Politico’s Ben Smith. The Chamber’s Tita Freeman did not dispute that the Chamber’s 501(c)(6) organization running attack ads receives foreign funds, and simply claimed, “We have a system in place” to prevent foreign funding for the Chamber’s “political activities.”

It’s called money laundering, and it’s illegal.

We also a complaint filed against Karl Rove’s Crossroads GPS group with the IRS for misuse of their 501(c)4 tax status.

If Barack Obama really wanted to change the atmosphere in Washington, going after crap like this, where people are not just bending the rules, but are

I am not suggesting that Obama specifically get the FBI on the Chamber of Commerce and Rove, that’s Nixonian, but making it clear to the senior staff of the DoJ that there will be a zero tolerance policy on crap like this is both ethically sound and justified by the facts.

Don’t hold your breath though.

Not gonna happen……

Wouldn’t be prudent.

Barack Obama, Watch This and Learn

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Why yes, that is the President of Bolivia, and he is driving someone’s testicles to the top of Nevado Sajama* (0:35)

Someone had the grand idea of having political rivals in Bolivia play a friendly game of football (soccer).

So, when you have political enemies on the field, what happens?

Well, it appears that there was a bit of rough play:

During a soccer match between teams of political rivals in Bolivia, the country’s president, Evo Morales, was caught on tape delivering a swift knee to an opponent’s groin in retaliation for a hard foul.

As Rory Carroll reported for The Guardian, the incident took place on Sunday in the Bolivian capital, La Paz, as the president’s men took on a team led by the city’s mayor, Luis Revilla.

Mr. Obama, the next time that John Boehner opens his mouth, take your cue from Bolivian President Evo Moralez, please.

*The tallest mountain in Bolivia.

Your Moment of Schadenfreude

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If there is a bright spot this year it is the meltdown in the Colorado Gubernatorial race, where John Hickenlooper is cruising to victory as Republican Dan Maes and wingnut Republican turned 3rd party candidate Tom Tancredo pummel each other, but I did not think that it was much beyond that.

Well, I was wrong, because Maes appears to be polling near 10%, and if he gets less than 10% of the vote, then the Republican Party becomes a “minor party” in Colorado:

But a big win for Tancredo — or even drawing much closer — could spell a big loss for both the GOP and his adopted third party, the American Constitution Party, for the next four years.

If Republican nominee Dan Maes receives less than 10 percent of the vote in November, the GOP becomes a minor party and subject to rules that could cut in half the amount its candidates can collect in campaign contributions. [Because they cannot get a separate donation for the primary if it is uncontested for state and local positions]

As Republicans absorb the news, leaders of the 2,000-plus-person ACP worry about their potential promotion to the majors if Tancredo exceeds 10 percent at the polls, a status that comes with new and costlyorganizational requirements.

Former ACP chairman Doug Campbell reveled in the GOP predicament, if not that of his own party, which may have to host precinct caucuses throughout the state and mail out primary ballots.

Additionally, it would mean that the party would not be placed in the to ballot spots, but rather would be ranked down ballot on the basis of a lottery with crazies like the Monster Raving Loony Party:

“The effect of the designation of minor party status for the 2012 election would be that our candidate for president will not be in the top two lines which will be reserved for the Democrat and American Constitution Party candidates. We will be left to compete for ballot position with the Greens, Socialists, American Communist Party, Libertarians. Prohibitionists etc.

“Our state house and senate candidates will similarly be relegated to bottom positions. In 2014, when we have our US Senate, Governor, Attorney General, Treasurer etc races, again, we will be at the bottom of the ballot fighting the libertarians etc for ballot placement. As we all know, being at the top or toward the top can mean several percentage points in the vote, enough in a close race to secure victory.”

Admittedly, Maes is polling significantly above the 10% line, he is polling at 15%, and I think that when it becomes clear that neither of them will win that there will be the governor voters will hold their nose and vote for Maes to avoid chaos for the next 4 years in the Colorado Republican Party.

Still, heh.

This May be the Future of America

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And Ayn Rand is smiling in hell.

You have probably heard the story, a fire department sitting idly by while someone’s house burns, because the homeowner had not bought a subscription.

The story is not quite as straightforward as it first appears, since the fire department is run and funded by the city of South Fulton, while the resident, Gene Cranick, lives in the county, so this is not a case of a governmental unit failing its citizenry, but rather it’s governmental units failing society as a whole.

Most at fault is Obion County’s Republican dominated government, which has steadfastly refused to create some sort of county-wide system because of the $30 or so a year that it would cost households.

It is Republican governance in a nutshell.

A Reason to Consider Subscribing to the Washington Post

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Not a reason to actually subscribe, mind you, it’s still a cesspool of conventional thinking and bad access journalism (Hi, Bob Woodward) but the fact that the professional hack masquerading as a media critic, Howard Kurtz is leaving the Washington Post and moving to the Daily Beast, Tina Brown’s online news web site.

Well the Washington Post‘s gain is Tina Brown’s loss.

He is, after all, a guy who writes on cable news while pulling down a 6-figure income from CNN, and writes on politics while his wife pulls down a 6-figure income as a Republican political consultant.

Well, it’s a reason second source anything that you see on the Daily Beast.

Economics Update

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There is a lot of news today, mostly in currency and international finance, but the lede, at least for a US focused post, which this is, is the Institute for Supply Management’s non-manufacturing index, well above forecast.

In international finance news, we are seeing central banks all over the world beginning to open the spigots again as they see the recovery sputtering.

We have the Bank of Japan engaging in another round of quantitative easing (printing money) by setting up a ¥5 trillion ($60 billion) fund to buy government and private bonds in order to keep interest rates at 0%, and Australia, one of the first countries whose central banks increased rates, has kept rates at 4.5%, surprising the experts who were expecting another rate hike.

Interestingly enough, currency has gone in the opposite direction expects from these actions, with the Australian Dollar approaching a 2-year high, and the US dollar fell.

Generally, interest rate surprises on the low side for other countries would drive the dollar up, but it appears that there is an expectation that the Fed will go heavily back into QE like the BoJ.

There is another potential blip on the horizon, as crude oil appears to be on an upswing again.

I’m Sure That ADL President Abraham Foxman will Be Endorsing Them

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Considering the degree to which Abraham Foxman has allied himself with the right-wing, nativist, and bigoted Christofascist right, it’s only a matter of time before he shows up at a fundraiser for the Swedish SD far right anti-Islamic party:

‘It won’t be long before Sweden Democrats show true anti-Semitic nature’

Far-right, anti-immigrant party won an unprecedented number of seats in recent elections; local Jewish leader warns its pro-Israel stance is just an expression of anti-Islam policy.

By Danna Harman

It will not be long before the true anti-Semitic nature of the far-right anti-immigrant Sweden Democrats (SD) party – which won an unprecedented number of seats in Sunday’s elections, is revealed – a leader of the local Jewish community there warned on Monday.

“This is a neo-Nazi party… articulate, and talented…but very dangerous,” said Lena Posner, President of the Official Council of Jewish communities in Sweden, an umbrella organization of Jewish groups in the country. “We know where these people are coming from. They are Nazi sympathizers who, under their jackets, are still wearing their brown shirts.”

The local Swedish Jewish community, at least in the person of Ms. Posner , is showing way more sense and decency that does Mr. Foxman did on the entire Park51 community center matter.

Not Enough Bullets

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So, once again, Congress refuses to act, so billionaire hedge fund managers can continue to pay less in taxes than the janitors who clean their offices:

Once again a key piece of news has passed virtually without comment.

While the entire nation argues over nonsense like the WTC Mosque, Rick Sanchez, and, yes, blue-red culture war stuff like the Tea Party, congress yesterday quietly took a knee on the “carried interest” tax question. In doing so they decided not to take a vote on changes already approved by both houses that would scale back perhaps the most preposterous tax break in the entire federal code, one that leaves hedge-fund gazillionaires like Stevie Cohen and John Paulson paying less than half the top tax rate paid by most middle and upper-middle class Americans.

In case you don’t recognize the writing style, it’s Matt Taibbi, and I suggest that you read the whole article, because he communicates the disgust that I feel far more cogently that I ever could.

Warren Goes European

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In terms of drafting the rules for the Consumer Financial Protection Bureau, Elizabeth Warren has eschewed a rules based approach to regulating consumer credit, instead choosing to go with the principle based system of regulations favored by European regulators:

In her speech and in an interview earlier in the day, Warren said she hopes to take a more “principles-based approach” to regulation, rather than simply saddling companies with more of what she calls “thou shalt not” rules — which make for burdensome, costly compliance and which banks often start trying to skirt as soon as they are written

“Regulators can make more pronouncements from on high, identifying suspicious practices in the various markets and banning them. Or regulators can layer on more disclosure requirements,” Warren said in her remarks. “But neither restores customer trust.”

Rather, she said, “Let’s measure our success with simple questions” — Can customers understand a product? Do they know the risks? Can they easily figure out what it really costs?

To the degree that this will produce uncertainty for the banks, this is a good thing, because regulatory certainty has been used as a license to rape consumers.

I’m still waiting to see how Timothy “Eddie Haskell” Geithner manages to cut her legs out from under her on November 3, because it’s clear that consumer protection is the last thing that he wants.

Foreclosure Fraud Hits Prime Time

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Yesterday, we’ve had a New York Times editorial, and today, Getchem Morgenson hits their front page with a survey of “flawed paperwork” issues:

As some of the nation’s largest lenders have conceded that their foreclosure procedures might have been improperly handled, lawsuits have revealed myriad missteps in crucial documents.

It’s good that this story has hit the big time, but Ms. Morgenson is wrong. There were no flawed documents, this was deliberate fraud, and the dead tree media is behind the curve on this.

We are seeing Fitch making noises about downgrading mortgage servicers over this issue, and on the regulatory front the Connecticut Attorney General has placed a 60 day moratorium on foreclosures, so that paperwork can be reviewed, and the Comptroller of the Currency has ordered 7 of the larges banks to review their paperwork.

On the private side of the business, we are seeing title insurance companies refusing to write policies on foreclosures for some of these banks.

In terms of the irregularities that we are seeing:

If you think that the housing crash is bad, just wait until millions of foreclosed homes hit the market, and no one is willing to buy them, because the title is not clear, than the sh%$ really hits the fan.

My earlier post on the subject is here.

I Believe That the Term Here is “Vigorish”*

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Bummer of a birth mark, Sharron Angle

Nevada Republican Senate Candidate Sharron Angle had a meeting with the 3rs party Scott Ashjian in an attempt to get him out of the race.

Unfortunately for her Mr. Ashjians recorded the conversation, and she was offering a piece of the action:

Says the grass roots movement “gives me juice. That’s really all I can offer to you (Ashjian) is whatever juice I have, you have as well…You want to see DeMint, I have juice with him….I go to Washington, DC and want to see Jim DeMint, he’s right there for me. I want to see Tom Coburn, he’s right there for me. I want to see Mitch McConnell, he’s there.”

She goes on to say that Republicans are corrupt, and that she will lose if the Teabagger Ashjian stays in the race.

Let me make this clear: I do not support the surreptitious taping, and if this happened in a state where it’s illegal, like Maryland, I would support prosecution.

That being said, these revelations could not happen to a more deserving character.

Pass the popcorn.

*I believe that the “juice” in the quote is a reference to transactional profits similar to those of a bookie, hence “vigorish”.

Economics Update

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The lede here is that capital goods orders fell and contracts existing home sales rose in August.

Note that the home purchase data is still well below what it was a year ago, and that capital goods orders ex-airliners was up.

On a slightly more concrete level, bankruptcies have hit the highest level since the congress sold out to the banksters with bankruptcy “reform” in 2005.

Finally, it looks like the invisible bond vigilantes remain in hiding, as, the yield on Treasuries 2-year fell to a record low, 0.37% (!).

Damn

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Click for full size

Tudza (l) and Lavi (r) as radioactive zombie cats

We took Lavi to the vet for what appeared to be some tooth problems.

It’s a tumor, and an aggressive malignant one in her head.

She probably will not make it to year’s end.

She’s had a good run, being over 17½, and had survived a bout of hepatic lipidosis about 5½ years ago, but it looks like she will not make it through year’s end.

It’s to be expected when cats reach this age, but it is still a bummer.

These Contemptible F%$#s Are Our Betters?

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Worst Conference Call Ever!

Ireland held a conference call on its debt, and due to an error in the settings, comments from the other participants were heard across the call.

So what did this collection of hedge funds and other investment firms do?

They crudely heckled the Finance Minister of a sovereign nation:

Mr Lenihan had been speaking for less than two minutes on Friday before a mistake by Citigroup meant that the bank’s clients were all able to be heard on the line.

Between 200 and 500 investors are understood to have been on the call, and as they realised their lines were not muted many began to heckle Mr Lenihan.

Some traders began making what one banker on the call described as “chimp sounds”, while another cried out “dive, dive”. A third man said “short Ireland” before adding “why not short Citi too?”

As the call descended into chaos, with one participant heard to say “this is the worst conference call ever”, Citigroup officials shut down the line.

We are not dealing with competent financial professionals here. We are dealing with hyper-competitive frat boys with brains the size of walnuts who are too incompetent to recognize their own incompetence.

This is why these people need to be “hit like a piñata with a stick,” because they are incompetent, overpaid, self-obsessed, morons who have the ability to destroy our economy.

Letting them do what they want is like giving opposable thumbs, assault weapons and espresso to rabid wolverines.

It won’t end well.

So Far in the Closet He’s Found Narnia*

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Let’s Roll Tape

An Assistant Attorney General for the state of Michigan, one Andrew Shirvell, has engaged in what can only be described as a relentless campaign of stalking, both Cyber and Real, against the Chris Armstrong, the gay president of the student assembly. (See the embedded vid)

Shirvell has now been placed on leave and is facing a disciplinary hearing, despite the fact that Michigan AG, and Christofascist right-winger, Mike Cox, has defended the right to stalk someone for being gay, no doubt because this is how Cox defines his base.

The crux of the batsh%$ insane jihad seems to be Armstrong’s push for LGBT friendly housing on campus, which has led the Assistant AG to make blog posts with swastikas, and to allegedly hang around and photograph Armstrong’s house in the early hours of the meeting, which has led him to file for a restraining order against Shirvell.

In the scheme of things, this incident will work itself out in the near term, the restraining order will likely be granted, and I’m pretty sure that Shirvell will eventually be fired, despite his being a long time supporter, and campaign worker, for Cox, because this has simply gotten too politically toxic.

This would all be silly and funny, but I figure than in the next 10-15 years, as Shirvell realizes what he is, and the video makes it clear that he is deeply in the closet, we are likely to hear a story about him in which the lede is, “Killed his wife and children, and then shot himself.”

*The bon mot is not mine, it’s from Bladesmith at the by invitation only Stellar Parthenon BBS.

Quote of the Day

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Vast forests have already been sacrificed to the public debate about the Tea Party: what it is, what it means, where it’s going. But after lengthy study of the phenomenon, I’ve concluded that the whole miserable narrative boils down to one stark fact: They’re full of sh%$.

–Matt Taibbi in Rolling Stone

($# mine)

He had a conversation with a man who has worked as a tax assessor his whole life, and hence is being paid by our tax dollars, and whose wife is on Medicare, and has a scooter funded by the program, but they aren’t the problem, it’s the other who is sucking the marrow out of our society.

Just go read it.