Just like the last VICTIM OF WELLS FARGO I wrote about, Wells Fargo claimed that Norman and Oriane Rousseau had missed a mortgage payment.  But the payment HAD been made in person at a Wells Fargo branch by Cashier’s Check, and Mrs. Rousseau has the receipt for the transaction.

The Rousseaus file a dispute with Wells Fargo over the supposed missing payment.  Wells Fargo “investigates” and comes back saying that the Rousseaus had stopped payment on the check.  They stopped payment on a Cashier’s Check?  Seriously?

I don’t want to spend too much time on this ridiculous point, so here’s how Rousseau’s lawyer explains this technical yet wholly insipid issue, and then we’ll move on…

The teller’s receipt establishes that the cashier’s check was in the custody and control of Wachovia on April 1, 2009, and the research by the Cashiering Department should have concluded that Wachovia screwed up by not applying the cash-equivalent funds to the Rousseau’s account. After delivery and acceptance to the branch office, it was Wachovia’s responsibility to safeguard the instrument; Wachovia itself effectively stopped payment on the cashier’s check.

Okay, so let’s get back to the meat of the story…

Concerned that they could not resolve the payment dispute but told they should apply for a loan modification, the Rousseaus hired a law firm and submitted a loan modification application.  After that it was standard operating procedure at Wells Fargo… we lost this, and we lost that, resend this, and resend that… for almost a year.

Good Lord, Wells Fargo, could you please do something differently just once?  This article is almost becoming a form letter.

Wells Fargo then of course told the Rousseau family not to make their payments, that they were being considered for a loan modification and that making their payments would immediately disqualify them.

So, they saved their payments just in case Wells decided to deny them a modification.  Saved every single one just in case the bank decided to act like… well, Wells Fargo Bank.

Then Wells sent them a Notice of Default, but when they called to say they wanted to reinstate their loan, Wells said what they always say… IGNORE IT… don’t worry about it, everything’s fine, it’s just an automated sort of thing… why, you’re being considered for a loan modification.

Then Wells filed a Notice of Sale on October 28, 2010.  Their home would be sold on November 22, 2010.  And still Wells said… IGNORE IT… it’s just another automated sort of thing… your loan modification is still pending… and please re-submit some documents.

It was November 10, 2010… just 12 days before their home was to be sold… when the Wells Fargo representative told the Rousseau’s that their loan modification had been denied.  The reason: Insufficient income.

Yeah, but you know the funny thing about that is that their income hadn’t changed a nickel since they applied for the loan modification.  So, what’s the deal?  Did it take Wells Fargo a year to figure out the Rousseau’s income was insufficient?  Is that the story I’m supposed to be buying into?

You’re a liar, Wells Fargo.  Either you knew you weren’t going to approve their loan modification, or you’re the most incompetent financial institution in the history of the world.  And you don’t just do this sometimes, you do this all the time… and especially to people in their 60s or older.  Why is that do you suppose? 

In case you’re wondering what I’ve been up to, I’m actually collecting Wells Fargo stories at this point.  I figure it’ll be a hoot to put them all together into a book.  What do you think?  Should I autograph a copy for you when it’s done?

That same day the Rousseaus found a lawyer and discovered they had a RIGHT TO REINSTATE their loan.  (Nice of Wells not to tell them that, by the way.)  They contacted Wells and requested a reinstatement quote… TWO DAYS LATER Wells finally gave them the phone number for RCS, the trustee.

But, RSC said that reinstatement would take two weeks and trustee sale was going off as planned in 8 days.  Wells got them their reinstatement quote too… it was dated November 15, but received via email on November 17, 2010.

And it expired in two days and had to be received in Texas by November 19, 2010.

The Rousseaus had more than enough in savings to reinstate their loan, they told Wells Fargo that… but now they couldn’t get the money from their IRA in time for the 2-day deadline and Wells refused to postpone the sale.

So, the Rousseau’s home sold at the trustee sale on November 22, 2010.

Next the Rousseaus go through a series of lawyers.  Finally, they get a good one and in July of 2011, the court grants an injunction contingent on them making a monthly payment of $1800.

But, by December of 2011, Wells finally wore the Rousseaus down and they just couldn’t make December’s payment.  They used up all their money fighting Wells Fargo, and Norm had been unemployed since the foreclosure.  He was taking odd jobs as a handy man to make ends meet.

Wells Fargo immediately goes to court… gets the injunction dissolved… then proceeds with the Unlawful Detainer… the lockout is set for May 15th, 2012… at 6:00 AM.

THAT’S TOMORROW MORNING… AT 6:00 AM.

Over this past weekend, Norm Rousseau talked with their attorney who is working pro bono by the way.  Basically, his lawyer tells him…

“Look… let’s face the facts here.  We’ll proceed with the lawsuit.  We’ll fight like hell to get you back in the home, but you have to be ready with some sort of plan so you’re not left homeless and on the streets.”

Norm found someone who has a 27-foot motorhome he can use, but after he gets it home on Saturday… it stops running… it won’t start.  But, Norm Rousseau is a man in his 50s with mad skills.  He goes to work around the clock taking apart the engine, doing everything he can to get it running so that on Tuesday morning he will have somewhere to house his family.  He’s up all night Saturday night, but still can’t get it running.  It’s too big to tow with a car.

His mind must have been wandering late on Saturday night.  What must a man, a father, a provider be thinking when he knows that everything in life has somehow gone terribly wrong and there’s nothing left to do?  He must have been imagining the sheriff pulling up to evict his family on Tuesday morning… just two days away, as the motorhome’s engine lay in pieces in his driveway.

I can only imagine what must have been going through his mind as he worked tirelessly, without sleep, on that engine and electrical system… as the clock ticked away the hours, I’m sure going faster and faster as time was running out.  Damn, it’s already 11:00 PM… then it’s 3:00 AM… and then 5:00 AM… and then before he knew it… a most unwelcome sun was shining… 9:00 AM…

I can almost hear him thinking: “Damn it, what am I going to do?  How could this have happened?”  I can hear him swearing under his breath as he fights with the old parts trying to get them to work together again… I can see him staring at the engine as the will to go on was leaving his soul…

Norman and Oriane Rousseau had bought their home in Ventura, California in 2000, putting nearly 30 percent down, which was their life savings.  In 2006, every time they went into the World Savings branch they’d get pitched on refinancing into one of World’s infamous Option ARM loans… that are now illegal, I believe.  After a couple of years of being pitched, they finally bought into World Saving’s lies.

They had told World Saving’s loan officer, ERIC COOPER, that they were only interested in obtaining a conventional 30-year, fixed-rate loan.  They wanted consistent payments over the life of the loan.

But COOPER assured them that they could significantly reduce their monthly payments… by more than $600 per month, with a lower interest refinanced loan. COOPER said that the new Pick-A-Payment loan product was better suited to their situation.

He described the Payment Option ARM as the new industry standard.  He pointed out that the lower interest rate and payment flexibility were valuable advantages that were not available with other loan products.  And he said that even more importantly, unlike the previous WORLD loans, the interest rate was tied to an index with historically low rates that were continuing to decrease.

According to COOPER, industry experts projected the interest rates to continue to fall, and so their monthly payments would be EVEN LOWER than their initial payments.

Even under the worst case scenario, COOPER assured them, the historical data for the index indicated that changes in the interest rate would only be slight, and if an increase should occur it would have a negligible effect on their monthly payments… no more than a few dollars.

And besides, COOPER explained, the loan would only be around for a couple years, as they should expect to refinance within the next two years to take advantage of even more favorable interest rates and as the steadily rising housing values would surely increase the amount of their equity in the property.

Then COOPER went for the close…

On the condition that the Rousseaus apply for the new loan that very day, he would agree to waive their pre-payment penalty, stating that there would be virtually no costs to refinance beyond a $35.00 application fee.

Yeah, COOPER, you’re a real peach.

COOPER also convinced the Rousseaus that it was in their best financial interests to consolidate approximately $25,000 in unsecured debt in the refinance transaction, citing the benefits of the lower interest rate and the convenience of having only one payment.

The Rousseaus provided COOPER with accurate and truthful information regarding their income and assets, and COOPER was such a nice guy that he offered to complete the Quick Qualifying Loan Application on their behalf.

Gee, thanks COOPER.

It was right around November 1, 2007, that WACHOVIA arranged for a notary to complete the closing at the Rousseau’s home.  The notary discouraged their review of the documents and directed them straight to the signature lines, but the Rousseaus noticed that a pre-payment penalty in excess of $4000.00 was included in the closing costs… the fee that COOPER had promised to waive if they applied that same day.  They called COOPER and he apologized for the oversight, but tried to get them to sign anyway, because it would only add a couple of bucks to their payment.

They said… no… they’d reschedule the appointment and wait for the four grand to be taken off their bill, thank you very much.

Two weeks later, the notary returned and they signed the paperwork for their new $368,000 state of the art loan.

Now, the Rousseaus didn’t know it at the time, but COOPER was a lying sack of garbage that had misrepresented just about everything having to do with their new loan.

The 7.2% interest rate of the new loan was actually higher than their old loan and higher than the 6.8% quoted by COOPER.  The “significant reduction in monthly payments” was an illusion accomplished by comparing the fully amortized payment of the 2006 loan with the negative amortizing minimum payment due under the new loan.

The new loan, at annual change dates, added deferred interest to principal and the loan amortized, with payment increases capped at 7.5% for ten years.  Then, the new loan recast when negative amortization reached 125%.

The Rousseaus were never told about the new loan’s fully amortizing payment of $2,497.94 per month, in fact their payment amount was intentionally misrepresented by COOPER.  And the new monthly payment could never decrease because it represented the minimum payment possible… the negatively amortizing option that meant payments would increase at each change date.

But that wasn’t enough for our boy COOPER.  The Rousseaus were charged $2,640.00 in origination fees for the “low cost” refinance, which made a tidy profit for World/Wachovia/Wells/Whatever bank.

And best of all, an undisclosed Yield Spread Premium (“YSP”) of $4,195 was charged for placing them in a loan with an interest rate .50% higher than they qualified for, and that YSP increased their monthly payments by $123.32, or $44,395.20 over the life of the loan.

The truth is that the Rousseaus were a heck of a long way from being considered well qualified for their new loan. Their fully amortized payment represented a total debt-to-income ratio of 27.91%, but that percentage was based on income figures that were grossly overstated by guess who? That’s right… COOPER.

The Rousseaus told COOPER their total gross annual income was, $76,000, but somehow it got listed as $136,800 on the application.  You know… the application that good old COOPER was nice enough to fill out for the Rousseaus.

So, it was Sunday… yesterday… around 10:00 AM… and Norm couldn’t get the motorhome running.  He must have realized that he couldn’t handle the shame of seeing his wife and stepson evicted with nowhere to go… living on the street.  I don’t know how anyone could face that reality.  I don’t think I could. 

How could it be that just 12 years before they had put their life savings down on their first and likely last home?  They had done everything right, but nothing was right anymore, and I’m sure to Norm Rousseau, nothing would ever be right again. 

Their church had offered to help them, maybe find them somewhere to stay temporarily, and that would be fine for his wife and her son… but not for him.  I’m sure he wept as he looked at the engine parts laying there, realizing that it was over.

Norm Rousseau called me a couple of months ago.  He wasn’t asking me to help him, in fact, he never even told me about what he was going through with Wells Fargo.  No, Norm was concerned about someone else who was losing a home.  A really good person who’s done so much for so many others, was how he described her.  It wasn’t right what the banks were doing he said.  He was hoping that I could do something to help someone he knew, because she was someone who had helped others… but he didn’t say a word about himself.

Norman Rousseau gave up over that engine that sits in pieces in his driveway today, the sun shining down making the metal parts hot to the touch.  Maybe it was the frustration of having nowhere to turn for justice, maybe it was the shame he felt that somehow he had let his family down… even though that was not the case at all.

Sometime mid-morning on Sunday Norm Rousseau ended his own life.  He went into his garage and shot himself.  At one point he could have reinstated his loan, that’s what he had planned to do, but Wells Fargo had made that impossible… they stripped him of everything he had.

And now, his wife and stepson are to be evicted at 6:00 AM tomorrow morning.  They have nowhere to go, they have no money, they are still in shock over the loss of Norm.

And I don’t know what to do really.  I’m going to call the sheriff’s office in Ventura… see if I can persuade them to drag their feet for a week before locking them out.  Their lawyer is trying to file something with the courts, but maybe you can think of something too.

Maybe you can forward this article to people in the media.  Tell them what’s going on… maybe someone will care enough to do something.  It’s 11:21 AM and I’ve been up all night again, I can’t really keep this up much longer… but somehow I felt like telling Norm’s story was the very least I could do.

Since Wells Fargo had already done the very least they could do.

Rest in peace, Norm Rousseau.

Mandelman out.

http://mandelman.ml-implode.com/2012/05/husbands-suicide-yesterday-wells-fargo-to-evict-wife-tomorrow-anyway/

• Hedges: How Our Demented Capitalist System Made America Insane | Economy | AlterNet

  • When civilizations start to die they go insane. Let the ice sheets in the Arctic melt. Let the temperatures rise. Let the air, soil and water be poisoned. Let the forests die. Let the seas be emptied of life. Let one useless war after another be waged. Let the masses be thrust into extreme poverty and left without jobs while the elites, drunk on hedonism, accumulate vast fortunes through exploitation, speculation, fraud and theft.
  • Reality, at the end, gets unplugged. We live in an age when news consists of Snooki’s pregnancy, Hulk Hogan’s sex tape and Kim Kardashian’s denial that she is the naked woman cooking eggs in a photo circulating on the Internet. Politicians, including presidents, appear on late night comedy shows to do gags and they campaign on issues such as creating a moon colony.
  • The quest by a bankrupt elite in the final days of empire to accumulate greater and greater wealth, as Karl Marx observed, is modern society’s version of primitive fetishism. This quest, as there is less and less to exploit, leads to mounting repression, increased human suffering, a collapse of infrastructure and, finally, collective death. It is the self-deluded, those on Wall Street or among the political elite, those who entertain and inform us, those who lack the capacity to question the lusts that will ensure our self-annihilation, who are held up as exemplars of intelligence, success and progress.
  • The World Health Organization calculates that one in four people in the United States suffers from chronic anxiety, a mood disorder or depression—which seems to me to be a normal reaction to our march toward collective suicide. Welcome to the asylum.
  • When the most basic elements that sustain life are reduced to a cash product, life has no intrinsic value.
  • Those who held on to pre-modern beliefs, such as Native Americans, who structured themselves around a communal life and self-sacrifice rather than hoarding and wage exploitation, could not be accommodated within the ethic of capitalist exploitation, the cult of the self and the lust for imperial expansion.
  • The war on the Native Americans, like the wars waged by colonialists around the globe, was waged to eradicate not only a people but a competing ethic. The older form of human community was antithetical and hostile to capitalism, the primacy of the technological state and the demands of empire.
  • Native Americans, especially the Iroquois, provided the governing model for the union of the American colonies
  • Marx, though he placed a naive faith in the power of the state to create his workers’ utopia and discounted important social and cultural forces outside of economics, was acutely aware that something essential to human dignity and independence had been lost with the destruction of pre-modern societies.
  • The Iroquois Council of the Gens, where Indians came together to be heard as ancient Athenians did, was, Marx noted, a “democratic assembly where every adult male and female member had a voice upon all questions brought before it.” Marx lauded the active participation of women in tribal affairs, writing, “The women [were] allowed to express their wishes and opinions through an orator of their own election. Decision given by the Council. Unanimity was a fundamental law of its action among the Iroquois.” European women on the Continent and in the colonies had no equivalent power.
  • Rebuilding this older vision of community, one based on cooperation rather than exploitation, will be as important to our survival as changing our patterns of consumption, growing food locally and ending our dependence on fossil fuels.
  • Seventeenth century European philosophy and the Enlightenment, meanwhile, exalted the separation of human beings from the natural world, a belief also embraced by the Bible.
  • The demented project of endless capitalist expansion, profligate consumption, senseless exploitation and industrial growth is now imploding. Corporate hustlers are as blind to the ramifications of their self-destructive fury as were Custer, the gold speculators and the railroad magnates. They seized Indian land, killed off its inhabitants, slaughtered the buffalo herds and cut down the forests. Their heirs wage war throughout the Middle East, pollute the seas and water systems, foul the air and soil and gamble with commodities as half the globe sinks into abject poverty and misery. The Book of Revelation defines this single-minded drive for profit as handing over authority to the “beast.”
  • The conflation of technological advancement with human progress leads to self-worship. Reason makes possible the calculations, science and technological advances of industrial civilization, but reason does not connect us with the forces of life. A society that loses the capacity for the sacred, that lacks the power of human imagination, that cannot practice empathy, ultimately ensures its own destruction.
  • The Native Americans understood there are powers and forces we can never control and must honor. They knew, as did the ancient Greeks, that hubris is the deadliest curse of the human race. This is a lesson that we will probably have to learn for ourselves at the cost of tremendous suffering.
  • The anthropologist Lewis Henry Morgan, who in 1846 was “adopted” by the Seneca, one of the tribes belonging to the Iroquois confederation, wrote in “Ancient Society” about social evolution among American Indians. Marx noted approvingly, in his “Ethnological Notebooks,” Morgan’s insistence on the historical and social importance of “imagination, that great faculty so largely contributing to the elevation of mankind.” Imagination, as the Shakespearean scholar Harold C. Goddard pointed out, “is neither the language of nature nor the language of man, but both at once, the medium of communion between the two. … Imagination is the elemental speech in all senses, the first and the last, of primitive man and of the poets.”
  • All that concerns itself with beauty and truth, with those forces that have the power to transform us, is being steadily extinguished by our corporate state. Art. Education. Literature. Music. Theater. Dance. Poetry. Philosophy. Religion. Journalism. None of these disciplines are worthy in the corporate state of support or compensation. These are pursuits that, even in our universities, are condemned as impractical. But it is only through the impractical, through that which can empower our imagination, that we will be rescued as a species. The prosaic world of news events, the collection of scientific and factual data, stock market statistics and the sterile recording of deeds as history do not permit us to understand the elemental speech of imagination. We will never penetrate the mystery of creation, or the meaning of existence, if we do not recover this older language. Poetry shows a man his soul, Goddard wrote, “as a looking glass does his face.” And it is our souls that the culture of imperialism, business and technology seeks to crush.
  • Walter Benjamin argued that capitalism is not only a formation “conditioned by religion,” but is an “essentially religious phenomenon,” albeit one that no longer seeks to connect humans with the mysterious forces of life. Capitalism, as Benjamin observed, called on human societies to embark on a ceaseless and futile quest for money and goods. This quest, he warned, perpetuates a culture dominated by guilt, a sense of inadequacy and self-loathing. It enslaves nearly all its adherents through wages, subservience to the commodity culture and debt peonage.
  • The suffering visited on Native Americans, once Western expansion was complete, was soon endured by others, in Cuba, the Philippines, Nicaragua, the Dominican Republic, Vietnam, Iraq and Afghanistan. The final chapter of this sad experiment in human history will see us sacrificed as those on the outer reaches of empire were sacrificed.
  • There is a kind of justice to this. We profited as a nation from this demented vision, we remained passive and silent when we should have denounced the crimes committed in our name, and now that the game is up we all go down together.

Posted from Diigo. The rest of my favorite links are here.

How Corporations Like Monsanto Have Hijacked Higher Education

• Academic research is often dictated by corporations that endow professorships, give money to universities, and put their executives on education boards.
• “When I approached professors to discuss research projects addressing organic agriculture in farmer’s markets, the first one told me that ‘no one cares about people selling food in parking lots on the other side of the train tracks,’” said a PhD student at a large land-grant university who did not wish to be identified. “My academic adviser told me my best bet was to write a grant for Monsanto or the Department of Homeland Security to fund my research on why farmer’s markets were stocked with ‘black market vegetables’ that ‘are a bioterrorism threat waiting to happen.’ It was communicated to me on more than one occasion throughout my education that I should just study something Monsanto would fund rather than ideas to which I was deeply committed. I ended up studying what I wanted, but received no financial support, and paid for my education out of pocket.”
• Conducting research requires funding, and today’s research follows the golden rule: The one with the gold makes the rules.
• “So if the rules and regulations and policies are based on science that is industry-biased, then the fallout goes beyond academic articles. It really trickles down to farmer livelihoods and consumer choice.”
• all corporate agricultural research, $7.4 billion in 2006, dwarfs the mere $5.7 billion in all public funding
• Influence does not end with research funding, however. In 2005, nearly one third of agricultural scientists reported consulting for private industry. Corporations endow professorships and donate money to universities in return for having buildings, labs and wings named for them
• corporate boards and college leadership overlap
• In 2009, South Dakota State’s president, for example, joined the board of directors of Monsanto, where he earns six figures each year. Bruce Rastetter is simultaneously the co-founder and managing director of a company called AgriSol Energy and a member of the Iowa Board of Regents. Under his influence, Iowa State joined AgriSol in a venture in Tanzania that would have forcefully removed 162,000 people from their land, but the university later pulled out of the project after public outcry.
• What is the impact of the flood of corporate cash? “We know from a number of meta-analyses, that corporate funding leads to results that are favorable to the corporate funder,” says Schwab. For example, one peer-reviewed study found that corporate-funded nutrition research on soft drinks, juice and milk were four to eight times more likely to reach conclusions in line with the sponsors’ interests. And when a scrupulous scientist publishes research that is unfavorable to the study’s funder, he or she should be prepared to look for a new source of funding.
• That’s what happened to a team of researchers at University of Illinois who were funded by a statewide fertilizer “checkoff” after they published a finding that nitrogen fertilizer depletes organic matter in the soil. Checkoffs are a common method used to market agricultural products, and they are funded by a small amount from each sale of a product – in this case, fertilizer. Richard Mulvaney, one of the U of I researchers, feels it is twisted that, in this way, farmers fund research intended to promote fertilizer use with their own fertilizer purchases.
• But often the industry influence may be more subtle. Joyce Lok, a graduate student at Iowa State University, said, “If a corporation funds your research, they want you to look at certain research questions that they want answered. So if that happens it’s not like you can explore other things they don’t want you to look at… I think they direct the research in that way.”
• The unholy trinity of industry, government and academics promoting industrial agriculture and de-emphasizing or dismissing sustainable methods has a long history and it continues today.
• In its report, Food and Water Watch advocates a return to robust federal funding of research at land grant universities. But government is hardly immune from serving the corporate agenda either.
• In a system in which corporations and government both fund research, but due to the revolving door, the same people switch between positions within industry, lobbying for industry, and within government, what is the solution?

Posted from Diigo. The rest of my favorite links are here.

A new report from MSNBC, however, provided an inside account of how Wells Fargo’s robo-signing department works. Unqualified employees with salaries ranging from $30,000 to $50,000 are given titles like “vice president of loan documentation” so they can sign foreclosure documents. Actual supervisors institute quotas on employees, forcing them to sign a certain number of foreclosure files each day — sometimes telling them they can’t eat breakfast or take lunch until they’re done. Documents required for homeowners to avoid foreclosure were ignored, left sitting on an unattended fax machine.

The result: the nation’s largest mortgage servicer often improperly foreclosed on homeowners who weren’t past due or owed little interest while pushing the files out the door as fast as possible, as an insider told MSNBC:

Some families apparently were denied loan modifications after only cursory interviews, she said. Other borrowers applying for help sent comprehensive personal financial documents to a fax machine that she discovered had been unattended for weeks. Others landed in foreclosure after owing interest payments of as little as $1.18 a day, according to documents she said she reviewed. [...]

“There was one file where they weren’t even past due and they were in foreclosure status,” the loan processor said. “They’re pushing these files and pushing these files….”

The MSNBC report comes just a month after a similar report from the inspector general of the Department of Housing and Urban Development, which found many of the same occurrences at Wells Fargo. In that report, Wells Fargo allegedly put an employee who had previously sold pizza in charge of loan documentation. Worse yet, the report found that executives at the banks knew about the practices and refused to stop them.

Higher-ups at Wells Fargo, however, are still denying that these abuses take place. “No one here is asked to sign anything they don’t understand. Period. End of story,” Michael DeVito, executive vice president of Wells Fargo’s Home Mortgage Default Servicing, told MSNBC. “There’s no production quota and if a team member says, ‘I don’t understand this I’m not going to sign it,’ that’s fine.”

Another Wells Fargo employee had a different account. “It’s exactly like an assembly line,” a loan processor told MSNBC. “You sign it, you push it off to a notary, they stamp it, you put it in a box and it goes somewhere else.” The next step, unfortunately, is that someone loses their home.

http://www.alternet.org/module/printversion/newsandviews/907008

Posted from Diigo. The rest of my favorite links are here.

Posted from Diigo. The rest of my favorite links are here.

California Refuses to Accept Obama’s Banking Sellout

Thursday 10 November 2011

by: Robert Scheer, Truthdig | News Analysis

California Attorney General Kamala Harris says that she refuses to release banks from legal liability for the mortgage crisis. (Photo: Obama For America – California [3])

There is no three-strikes law for crooked bankers, not even a law for a fifth strike, as The New York Times reported in the case of Citigroup, cited last month in a $1 billion fraud case. Unlike the California third-striker I once wrote about whom a district attorney wanted banished forever to state prison for stealing a piece of pizza from the plate of a person dining outdoors, Citigroup executives get off with a fine and by offering a promise not to do it again, and again and again.

As the Times reported when Citigroup agreed to settle SEC charges last month: “Citigroup’s main brokerage subsidiary, its predecessors or its parent company agreed to not violate the very same antifraud statue in July 2010. And in May 2006. Also as far back as March 2005 and April 2000.”

Not that the bankers face prison time, since the Justice Department has refused to act in these cases, and the Securities and Exchange Commission is bringing only civil charges, which the banks find quite tolerable. This time, the fine against Citigroup was $285 million, which may sound like a lot except that the bank raked off as much as $700 million on this particular toxic securities deal. As the Bloomberg news service editorialized, “… there should be only one answer from Jed S. Rakoff, the federal judge in New York assigned to weigh the merits of the agreement: You’ve got to be kidding.”

Not to pick on Citigroup, the too-big-to-fail bank that Clinton administration Treasury Secretary Robert Rubin helped make legal before he was paid off with a $126 million job on Wall Street; that corporation was not the only serial offender. “Citigroup has a lot of company in this regard on Wall Street,” the Times noted, “nearly all of the biggest financial companies—Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America among them—have settled fraud cases by promising that they would never again violate an antifraud law, only to have the SEC conclude they did it again a few years later.”

So forget relying on the federal government to hold the Wall Street swindlers accountable. Indeed, the Obama administration has been involved in negotiating a deal with state attorneys general to settle their complaints with the banks for a pittance of compensation for the victims. In return, the states would promise not to institute further legal proceedings against the banks.

The fix was in for what a New York Times editorial on Tuesday headlined “Letting the Banks Off Easy” described as “paltry” mortgage relief, reducing by less than $20 billion the balances of 14.5 million underwater homeowners who are “drowning in some $700 billion of negative equity.” The deal has been stalled by the refusal of California Attorney General Kamala Harris to accept this sellout. Among its other disastrous concessions would be ending further investigation by the states into financial skullduggery connected with the housing meltdown.

In September, Harris, elected in a Democratic sweep of the state’s top offices in 2010, went against the dictates of the Democrat in the White House, stating that she refused to release the banks from legal liability for the mortgage crisis. That is the nub of the pending White House-brokered deal with the banks. As the Times summarized it: “The proposed settlement reportedly would prevent the states from pursuing claims against banks relating to fraud or abuse in the origination of the bubble. It would also prevent states from pursuing claims for foreclosure abuses, like improper denial of loan modifications.”

Traditionally the states provided the essential regulation of mortgage origination, ownership and sales as a transparent process duly recorded and subject to public examination at the county level. But in order to facilitate the gathering of those mortgages into the sort of collateralized debt obligations that the banks could then bet on and trade worldwide, homeownership became a murky matter. Many of the mortgages now in question, including the ones that Citigroup’s “synthetic” derivative was based on, are no longer owned by the banks that originated them. They are instead part of the Mortgage Electronic Registration Systems (MERS) database, owned by a consortium of banks and residing in computers in Reston, Va.

The MERS system is described by the Times as “a land registry system implicated in bubble-era violations of tax, trust and property law.” The Obama-supported settlement would make it very difficult if not impossible to investigate at long last the workings of MERS and other systemic sources of what is now a full-blown international economic crisis. As the Times editorial put it, “In effect, the legal waivers being contemplated would let the banks pay up to sweep wrongdoing under the rug.”

Thankfully, we have a few state attorneys general, most prominently California’s Harris, standing up for the American people, but it is outrageous that a president who avowedly committed to defending the public interest would now be subverting that effort rather than leading it.

Copyright 2011 Creators.com

Robert Scheer [5]

 

California Budget Talks: Too Close for Comfort

[8]

Willie L. Pelote Sr. | Truthout | News Analysis

Too Big to Jail

[9]

Robert Scheer | Truthdig | Op-Ed

• News

 

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Source URL: http://www.truth-out.org/california-refuses-accept-obamas-banking-sellout/1320935116

Links:
[1] http://www.truth-out.org/print/8849
[2] http://www.truth-out.org/printmail/8849
[3] http://www.flickr.com/photos/ofacalifornia/5092416584/
[4] http://www.truth-out.org/printmail
[5] http://www.truth-out.org/content/robert-scheer
[6] http://org2.democracyinaction.org/o/6694/p/salsa/web/common/public/signup?signup_page_KEY=2160
[7] https://members.truth-out.org/donate
[8] http://www.truth-out.org/?q=california-budget-talks-too-close-comfort/1305145392
[9] http://www.truth-out.org/?q=too-big-jail/1320414516

 

 

Share on Facebook ]]> http://robertcoss.com/blog/2011/11/11/california-refuses-to-accept-obamas-banking-sellout/feed/ 0 http://robertcoss.com/blog/2011/11/11/chalmers-johnson-blowback/ http://robertcoss.com/blog/2011/11/11/chalmers-johnson-blowback/#comments Fri, 11 Nov 2011 06:30:16 +0000 Robert Coss http://robertcoss.com/blog/?p=3812 TimeToFlushhas shared a video with you on YouTube:

Chalmers Johnson Blowback

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Share on Facebook ]]> http://robertcoss.com/blog/2011/11/11/chalmers-johnson-blowback/feed/ 0 http://robertcoss.com/blog/2011/10/17/arrested-for-withdrawing-your-money-at-citibank/ http://robertcoss.com/blog/2011/10/17/arrested-for-withdrawing-your-money-at-citibank/#comments Mon, 17 Oct 2011 14:25:57 +0000 Robert Coss http://robertcoss.com/blog/?p=3725 Continue reading →]]>

 clipped from www.alternet.org

VIDEO: 24 Arrested at Citibank for Attempting to Move Their Money?

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As part of Saturday’s global day of action against Wall Street and corporate power, in solidarity with the Occupy Wall Street movement, protesters in New York and elsewhere organized groups to go to the major banks to withdraw their money.

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The day started off smoothly, with a group of people organized by the Labor Outreach working group from Occupy Wall Street arriving at a Chase bank to withdraw their money. Chase went off without a hitch, but by the time the protesters made it to a Citibank branch there was trouble.

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The video below shows people being locked inside a Citi branch, and then forcibly arrested. The charge, reportedly, is “criminal trespass.”  For trying to withdraw your own money from a bank?

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They might have temporarily been halted from removing their money, but one would have to think that as soon as they get out, they’ll return even angrier than before. Not a good customer retention strategy, Citibank.

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By Sarah Jaffe | Sourced from AlterNet

Posted at October 16, 2011, 7:23 am

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