Author: Matthew G. Saroff

A Court Case to Watch on HAMP

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A federal court in California has ruled that a borrower is an intended 3rd party beneficiary of the HAMP program, and so has standing to sue the bank for acting in bad faith:

This is getting interesting. A judge in U.S. District Court, Southern District of California, has issued an order that may just answer a few prayers of many homeowners. Here’s what happened…

A San Diego homeowner, by the name of Ademar Marques, was applying for a loan modification, and, although it might be hard for many readers to believe, his servicer, Wells Fargo, dba, America’s Servicing Company, wasn’t being very nice about it, or even cooperating at all. It seems that Wells Fargo wanted to just skip all of those messy and time-consuming formalities required when considering someone for a loan modification, and just jump straight into foreclosure.

Mr. Marques filed a lawsuit against Wells Fargo’s America’s Servicing Company because he read about the Home Affordable Modification Program (“HAMP”) and the program’s guidelines said that his servicer was “REQUIRED” to screen him for a hardship, and consider him for a loan modification. He also alleged that he qualified for the loan modification program based on all of the published guidelines, and that his servicer, a participating servicer in HAMP never said that his loan could not be modified, they just refused to modify it, and instituted foreclosure proceedings.

Well, I never! The gall of some servicers. Have you ever heard of such a thing? Actually, I have. But not more than 30-40 times a day for the last two years.

The court ruled that as a participant in HAMP, the bank was obligated to review Ademar Marques case, and in not doing so, they breached their HAMP contract, and so do not have the right to foreclose.

Here is the money quote:

Are you digging this? Best I can make out, if you’re the intended third party beneficiary to a federal contract you can sue for breach of contract. So, if it says in the contract that the servicer “MUST” do something, and that servicer doesn’t do it… you the borrower may be able to sue the servicer for breaching that contract.

If Wells appeals, and if I were them, I wouldn’t, because settling in this one case loses them a mortgage, and if the court of appeals rules against them, it becomes case law for a large swath of California, but bankers are not know for cutting their losses.

If there is an appeal, and Mr. Marques prevails, then it is certain that Wells Fargo will appeal to the Supreme Court, and I would bet 5 to 1 odds that if it gets that high, then the Obama administration will argue for the malefactor banks, because that’s how they roll.

Spıinal Tap Drummer Syndrome Claims ELO Cellistge 62

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Mike Edwards of ELO died on September 3 when a 700 pound hay bale that came down a slope and crushed his van.

My first thought was that it sounded like the demise of a drummer for Spinal Tap.*

I’ve never been a big fan of the band, and obviously, Mr. Edwards has been out of the limelight for 35 years, since he left the ELO, and my condolences go to his friends and family.

That being said, what is it with rock and rollers and bizarre deaths?

On a note closer to home, obviously none of us can be certain when death might strike, whether it’s a heart attack, or a 50 stone hay bale.

It’s something to think about this (Jewish) New Year.

*Spinal tap drummers have

  • Died in a bizarre gardening accident, that the authorities said was “best left unsolved”.
  • Choked on vomit of unknown origin, other than his own, because “[y]ou can’t really dust for vomit.”
  • Spontaneously combusted.
  • Creme Brulee commitments forced him to retire, but went on backing tambourine for tour in 1982.
  • Claimed he “couldn’t take this 4/4 sh%$”; according to an MTV interview with Spinal Tap in November 1991, he disappeared along with the equipment during their Japanese tour. He is either dead or playing jazz.
  • Allegedly sold his dialysis machine for drugs; presumed dead.
  • Eaten by his pet python Cleopatra.
  • Exploded onstage.

I Was Wondering When Someone Would Do This

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I had been wondering when someone would combine the fuel economy advantages of a hybrid with the fuel economy benefits of a diesel.

Well it’s Pugeout, whose 3008 Hybrid4 stakes out this ground.

In typical French fashion, their hybrid system is kind of offbeat, the 163 hp turbo-diesel engine drives the front wheels, with a 37 hp electric motor driving the rear wheels, with the road serving to keep the two drives in sync.

I’m not sure how it shapes up efficiency wise, it would appear that regenerative braking applies only to the rear wheels, but it does allow for the car to function in 4 wheel drive mode.

Sunse? Space Goatse*?

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Click for full size

There is a reason why the comments at io9 are so rude.

Space Goatse†

The Big Bear Solar Observatory (BBSO) has published what is the most detailed photo of a The clearest photo of a sunspot we’ve seen thus far.

But this is not what I, or many of the folks who commented about the picture.

It was about 50-50 between people who thought that it looked like the eye of Sauron, and people who thought that it resembled a certain unspeakable Internet meme.

Me, I never saw the Lord of the Rings movies, so you can guess where my mind went.

In any case, if you want to review the comments on the thread, and you understand the context,* then you may find significant amusement regarding what is otherwise a straightforward science story.

H/t hedgehog on by invitation only Stellar Parthenon BBS for finding this little “gem”.

*If you don’t know what Goatse is, for the sake of all that is holy, do not Google it!
†Thank SupaChupacabra at io9 for this bit of wit.

Pass the Popcorn

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Lisa Murkowski’s people, though not Senator Murkowski herself, are making noises about her trying to run for reelection on the Libertarian ticket:

Republican U.S. Sen. Lisa Murkowski has received significant support since narrowly losing to Joe Miller in the August GOP primary, a spokesman said Sunday.

Murkowski has yet to endorse her Republican rival, leading to widespread speculation that she is evaluating options for a possible re-entry into the race. She has two options if she wants to re-enter: to be invited to run under the banner of the Alaska Libertarian Party or to mount a write-in campaign.

“She has received a huge outpouring of support from Alaskans, both individuals and groups,” Murkowski spokesman Steve Wackowski wrote Sunday in an e-mail to the Daily News-Miner. He cited support from Alaska Native groups and the fishing and energy industries.

I don’t think that she is going to run, and if she does, it is not clear who she would draw more votes from, though my money is on pulling more from Miller than from Democrat Scott McAdams.

Additionally, the Libertarian Party has already been cool to the idea of putting her on the ticket.

I don’t think that she will run, but that this will freeze Miller’s campaign in place, and not do so for McAdams, because Miller’s campaign is very different with Murkowski in the race, and Mcadams’ isn’t.

He’s Expecting to be Indicted

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Mayor Richard M. “Richie” Daley has decided not to run for reelection as Mayor of Chicago.

Basically, given his history, my guess is that he knows that a corruption indictment is coming, and he wants to clear the deck in preparation.

There are whispers that Rahm Emanuel might take a shot at running for mayor, but I don’t think so.

Rahm has failed upward his entire political career, NAFTA, trying to kill the 50 state strategy, running pro-war candidates who lost, etc.

You can make money in Washington, and on Wall Street (Rahm worked at Wasserstein Perella and Federal Home Loan Mortgage Corporation (Freddie Mac)) based on connections, but if you are the Mayor of Chicago, you have to make things work.

Just ask former Chicago Mayor Michael Bilandic.

Rahm might have the chops for the party politics, it is what he excels at, but at making worthwhile things happen, he is simply incompetent, and if he were to be mayor, he would be a one term mayor, and he would be unelectable thereafter, at least in Illinois.

But I’ve gotten off topic. My thesis is that Daley is resigning because US Attorney Patrick Fitzgerald is getting to close for comfort.

CrowdQuery: Greatest Mistake of the Crisis ? | The Big Picture

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I’m with The Bloodhound Gang, on Banks,
Burn Motherf%$#er, Burn! (NSFW)

Barry Ritholtz asks his readers what was the biggest mistake made by regulators during the financial crisis, he thinks that it was the Bear bailout, because it led banks to think that they were invincible, but he asks, “Was Lehman the biggest error? Fannie/Freddie Nationalization? Something else in entirely?”

I’ll go with something else entirely.

We should have let the festering pile of arrogance, ignorance, greed, and evil that was circling the bowl go under, and replace it with a taxpayer run lending facility for the rest of the economy.

We would have spend a lot less money than we have, there would have been more lending to the real economy, and the corrupt elites that got us into this mess would have been unseated, which, as Simon Johnson, former IMF chief economist, is what is really necessary in these cases, that these politically connected elites be broken.

Sergey Aleynikov Gets One Count Dismissed

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He is accused of stealing Goldman Sachs’ proprietary high frequency trading software, but one of the three counts against him, for unauthorized computer access, has been dismissed.

I’ve always maintained that HFT is actually illegal front-running, or at least it was illegal before Treasury Secretary Robert “Why am I not in jail?” Rubin got his hands on the regulatory regime, and as such, I have always wondered if there was a cover-up of some kind, seeing as how the prosecutors have admitted that this code could be used to manipulate the markets.

A twist in the case that I was unaware of was that Sergey is not the only one the Feds are going after on this, as, “Two months after Aleynikov’s indictment, prosecutors charged former Societe Generale trader Samarth Agrawal with stealing computer code used in high-frequency proprietary trading in the French bank’s New York office.”

I am beginning to think that there is an official policy of allowing “systemically important” banks to skim profits from the markets in order to bolster balance sheets that are far shakier than has been revealed, but they want to keep this technology out of the hands of the small fry, because it would make the flash crash look like a weenie roast if too many people got their hands on this technology.

Background here

How to Link to People When You Do Not Want to Raise their Google™ Page Rank

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Frequently people who I consider to be bad actors say things that I want to note.

In a blog, of course, you are supposed to link to them, that is what the World Wide Web is supposed to be about.

On the other hand, I do not want to drive traffic to their site.

One way of handling it, as I do with Associated Press stories, is to find alternate links. (here Google News is your friend)

Well, our good friends at Tech Crunch have provided an alternate, and somewhat less severe way to handle this, the nofollow tag, which tells Google not to follow the tag, so you won’t boost their google page ranking.

Here is an example from the Wiki:

<a href=”http://www.example.com/” rel=”nofollow”>discount drugs</a>

The tag was created by Google, but Yahoo, Ask.com, and Bing also follow this convention.

I’m not sure under which circumstances I would employ this tag, as opposed to finding an alternate link, except, perhaps, when there is no alternate link.

A Must Read on Obama and the 3rd Way

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Daniel De Groot at Open Left pulls a comment by sTivo and it may be the clearest explanation of both Barack and 3rd way politicians yet given:

When Barack Obama made his famous remarks about Ronald Reagan being transformational, it was misinterpreted as being political, an attempt to reach out to the other side. It actually was, as some feared, philosophical. It really did mean, sincerely, that except around the edges, he thought that Reaganism-Thatcherism was irreversible. Just as Bill Clinton does, just as Tony Blair does.

The Third-Wayers are serious about this. Seriously deluded, perhaps, but dead serious. There was never an attempt to triangulate the “independent center”, those who still believed in Reaganism but were distressed by the partisan cultural meanness. That was sincere. Those who were played were the Democratic base. They would have to be satisfied with corporate-style knockoffs of social-democratic ideas (health care being the most obvious example). Labor reformers would have to be mollified with “we don’t have 60 votes”. And symbolic gestures devoid of content like inviting Pete Seeger to the White House.

(emphasis mine)

Occam’s razor seems to mitigate toward this explanation.

Go read the rest.

H/t Atrios.

Why the Hell is the US Government Supporting the Karzai Government?

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The largest bank in Afghanistan, Da Kabul Bank, is in the process of imploding due in a miasma of corruption and self dealing, as ordinary depositors rush to pull out their money from the institution following a number of stories revealing their corruption:

The Karzai government is corrupt and rotten to the core. Not a single US soldier should die to prop it up. The lie that we are fighting “al–Qaeda” in Afghanistan needs to be exposed. The US and NATO are fighting four or five groups of Pashtun insurgents, some of them until fairly recently US allies. The goal of the fighting is to keep the Karzai government from falling to the guerrillas and to train up an army and police force that could go on defending Kabul. The Afghanistan National Army from all accounts has poor morale. No wonder. What Afghan soldier or policeman would die for a ponzi scheme?

But Juan Cole’s outrage at this was premature, because it is actually worse than he first reported, because after the government seized control of the bank, as the Washington Post hed states, “Officials freeze assets of Kabul Bank shareholders, excepting Karzai’s brother.”

Why we supported his continued corruption, and his election theft, I’ll never know, but enough is enough.

Get out now, because the alternative, replacing him (see Diệm, Jean Baptiste Ngô Đình) just won’t work.

Obama Calls for Weak Tea, and Cedes Ground to the Right Wing

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So now, instead of trying for something that works to reduce unemployment, Obama is calling for a modest public works program, $50 Billion over 6 years, significantly less than what we are flushing down the toilet on the unnecessary F-35 Joint Strike Fighter.*

What’s more, once again, he throws a bargaining chip to the Republicans, who have shown their unwillingness to negotiate in good faith, by also proposing that the R&D tax credit be extended and made permanent.

Once again, when trying to put forward even the most modest proposal, he kneecaps himself by taking what could have been used as a lever to derive support, and handing it to his enemies so that they can use it as a cudgel against him.

Week tea, constructed to make it even weaker, once again.

*This is not meant to be a commentary on the capabilities of the F-35, simply a statement that these capabilities are simply not necessary in current of foreseeable future conflicts, and the same goes for the F-22, so please don’t make this a Raptor/Lightning II pissing contest.

So Now You Can Patent Recipes

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It appears that a French company has patented Plumpy’nut, a fortified peanut butter as a treatment for severe malnutrition:

Should a revolutionary humanitarian food product be protected by commercial patent, when lifting restrictions might save millions of starving children?

That is the moral conundrum at the heart of a bitter transatlantic legal dispute.

On one side are the French inventors of Plumpy’nut, a peanut paste which in the last five years has transformed treatment of acute malnutrition in Africa.

Nutriset, the Normandy-based company, says the patent is needed to safeguard production of Plumpy’nut in the developing world, and to stop the market being swamped by cheap US surpluses.

And on the other side are two American not-for-profit organisations that have filed a suit at a Washington DC federal court to have the patent overturned.

They say they are being stopped by Nutriset from manufacturing similar – and cheaper – peanut-based food products, despite the proven demand from aid agencies.

“By their actions, Nutriset are preventing malnourished children from getting what they need to survive. It is as simple as that,” said Mike Mellace, of the San Diego-based Mama Cares Foundation.

I will spare you the picture of the severely malnourished child in the article, but it appears to me that this patent is not only morally indefensible, but also a very real expansion of IP law to an area where it had not previously applied, recipes, which are rather famously not covered by copyright (see here), and the patent appears to be rather broad, covering pretty much every nut based food with milk in it, which would include the Nutella from which Plumpy’nut was originally derived.

The problem here is that the other potential players in this market (EVIL term, that) are all small not for profits who would be driven to extinction with a loss in a patent court.

One solution here is to make patents like civil rights law, and allow people to file suit before infringing, for the same reason that they do with civil rights suits: because the chilling effect occurs even if no one breaks the law.

Non-Combat Role My Ass!

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Our troops are still conducting combat operations in Iraq:

US troops have been called in to help Iraqi forces battle insurgents who attacked an army base in Baghdad, killing 12 people, officials say.

It marks the first such use of US troops since the end of US combat operations five days ago.

US forces remaining in Iraq can now only participate in operations at the request of Iraqi authorities.

A US military spokesman said US forces had provided fired as Iraqis located two of the assailants inside the base.

When I said that the phony withdrawal from Iraq was a lie, I was right.

81% of the American Public Think that the Economy Sucks

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So says a CNN/Opinion Research Corporation survey.

This is unsurprising, and it may explain why efforts like Clinton’s, Blair/Brown’s, and Obama’s to dismantle the New Deal/Social Democrat structure, because they believe, even more than Republicans, that “Reagan changed everything,” are driving people back into the arms of an increasingly delusional Republican Party, because a bad something always wins over a better nothing.

This is a foreseeable consequence of the “3rd Way.”