OMG: Report From The Florida Epicenter of Fraudclosures, Why Is Obama Silent?

October 17th, 2010 - by: danny

Update. Excellent screening of my film Plunder at the Next Gen conference in Florida. There are also screenings underway in Australia. I was interviewed by Green Left.

Update, Monday Afternoon: Bank of America says it plans to resume foreclosures in 23 states next week and will refile paperwork for 102000 cases. That’s ONE HUNDRED AND TWO THOUSAND CASES!

Tues: WP–Democrats Face Conflicts in Foreclosure crisis

HP: Fred Schulte and Ben Protess, The New Tax Man: Big Banks And Hedge Funds

Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.

Report from the Epicenter of Fraudclosures

IT’S DARK AS A DUNGEON DEEP DOWN IN THE MINE:
Can There be A Rescue of US Workers Facing Foreclosure & Unemployment?

By Danny Schechter
Author of The Crime Of Our Time

WEST PALM BEACH, FLORIDA: In all of the economic issues we are dealing with, there is always a “back story, a deeper context” that is usually missing, “disappeared” like those Allende supporters in Chile in the l970′s who wanted to empower workers, not just rescue them when they get buried in a deep hole.

Most deeper issues go uncovered. Luis Campos, Director of the School of Anthropology at Chile’s Universidad Academia de Humanismo Cristiano, points out, “more buried than the miners themselves, the demands and the rights of the indigenous population continue to be flouted and unrecognized in our country.”

Many unsafe mines worldwide are still at risk from China to Zambia.

Who woulda thunk – certainly not the 1300 “journalists” on the scene–that that mine disaster had its origins in the era when Richard Nixon and Henry Kissinger helped snuff out an emerging popular democracy in the name of protecting what West Palm Beach-based writer and former economic “hit man,” John Perkins, calls the corporatocracy.

Historian Juan Cole poses these questions: “Are copper and gold mine owners stronger in relation to workers and have they escaped government regulation because the US engineered a coup in 1973 to destroy the Chilean Left?

“Was the San Estaban mining company’s ability to marginalize the union and to disregard input from the workers rooted in American-imposed corporate privilege? In other words, was the trapping of these workers in the first place Richard Nixon and Henry Kissinger’s fault? ”

That deep hole in that Chile mine was caused in part by a gold rush there—triggered, in turn by, a global financial crisis MADE IN THE USA. It had its counterparts in the US and, not just among those 29 miners who perished in the Big Main mine in West Virginia, last April, a disaster that was supposed to lead to new safety rules that the Republicans have been insidiously blocking.

There is another hole we need to focus on. Millions of us are trapped in our own mines, ‘underwater” in homes that have lost value with bills we cannot afford, trapped in unemployment, in jobs that are gone and not coming back. Poverty is up and the noxious Newt Gingrich wants to end the food stamps that so many now depend on.

There is no rescue in sight, and the human plight of most of the millions affected takes part outside of media sight.

The gaggle of reporters that covered the mine rescue as a human-interest story there – not a political issue– missed the back-story just as they miss our own here.

Far fewer reporters are covering this crisis?

Here in Floriduh, one epicenter of the housing catastrophe, homeowners. were shell-shocked by the latest fraudclosure crime wave. Denise Richardson writes in the Sun Sentinel, “Last I knew, knowingly signing documents fraudulently and using them in a court of law is frowned on, right? It’s criminal, isn’t it? Or is it only criminal if you are a homeowner and not a bank? Seems we’ve gone to great lengths to create and then accept a double standard here.

Perhaps these financial crimes – yes, that’s what they are, crimes – continue to happen because we never addressed the real problems to begin with. You can’t fix a problem you don’t acknowledge. Does anyone believe that was done to help protect the rights of homeowners? Let’s call it what it is: fraud.”

An attorney in Deerfield Beach Fla., representing 3000 foreclosure victims, has taken hundreds of depositions from Bank employees who admit they knew nothing about the details of the evictions they signed off on. Many are now being put down as “Burger King Kids” yet they know more about real whoppers than this lot knows about real estate. RealtyTrac reports that foreclosure and REO homes accounted for 24 percent of all residential sales during the second quarter? That is huge!

Here in relatively affluent Palm Beach County, homeowners are Number l in the state for the average number of loans in foreclosure that are delinquent. It has the fourth highest number of foreclosures, 45, 829 with an average delinquency of 623 days. You will recall that Bernie Madoff turned Palm Beach into a hunting ground for his ponzi scheme. It was also ground zero for electoral fraud in the 2000 Presidential election. (See my film “Counting On Democracy.”)

This situation is worse than we realize, and not just for the people most directly affected. No one knows how much the banks will lose in the class action suits, fines and legal actions to come. Some think it could be tens of billions suggesting another bailout may be in the offing, probably by the Federal Reserve Bank.

Paul Krugman questions whether the banks had the right to seize many of these homes, arguing, “The mortgage mess is making nonsense of claims that we have effective contract enforcement – in fact, the question is whether our economy is governed by any kind of rule of law.”

Buried in the Business section, on page B-8 of the New York Times, way down in an article saying the banks may be on the hook for billions, was this very revealing paragraph speaking to a problem that I have been raising for years making clear the fraud problem is not just with foreclosures.

“Inside the investment houses, several traders said nerves were frazzled further by worries that banks could face much bigger mortgage related losses, not from foreclosures, but because of questions about how the money was lent in the first place. If it turns out that mortgages were bundled together and sold improperly, more holders could sue the banks and force them to buy back tens of billions in mortgage-backed securities.”

Frazzled nerves so far seem the worst punishment the banksters have tasted. They have just decided to reward themselves with a new round of raises and bonuses worth $144 billion with few criticisms. The Government has meanwhile just “settled” for $73 million with Countrywide, the leading predatory lender. That means that a prosecution of its top executives, the poster boys for mortgage criminality, will be dropped. Notes the website Housing Doom:

“Even having to pay $77.5 million, Mozilo still nets $61.5 million, just between November 2006 and October 2007. Maybe “crime doesn’t pay,” but one of the lessons of the housing bust is that fraud does.”

What should be done? Webster Tarpley speaks for many in calling for a national moratorium on foreclosures, a course of action rejected by the White House.

“The current chaos in home foreclosures is once again the direct responsibility of the zombie bankers themselves, who have neglected all traditional legal and accounting standards concerning the necessary paper trails in their frenzied desire to securitize mortgage loans and make them into toxic derivatives in the form of asset-backed securities and mortgage backed securities. The zombie bankers, already the recipients of $24 trillion of public largess in the form of the various bailouts, have turned out to be incompetent even in the technical aspects of their own thieving racket.

But the chaos in the bankers’ filing systems is nothing compared to the chaos created by the millions of foreclosures they have engineered, based on adjustable-rate mortgages and similar misleading contracts which never should have been legal in the first place. For some time, it has been evident that the defense of the American middle class requires a blanket, orderly, federal freeze (or moratorium) on all foreclosures on primary residences, similar to the New Deal protections offered to family farms by the landmark Frazier-Lemke Act of 1935-1949 during the previous depression.”

Ellen Brown, author of Web of Debt, goes further in Yes Magazine asking if it is “Time to Break Up the Too-Big-to-Fail Banks?

“Popular financial analysts, crippling bank losses from foreclosure flaws appear to be imminent and unavoidable. The defects prompting the “RoboSigning Scandal” are not mere technicalities but are inherent to the securitization process. They cannot be cured. This deep-seated fraud is already explicitly outlined in publicly available lawsuits.

There is, however, no need to panic, no need for TARP II, and no need for legislation to further conceal the fraud and push the inevitable failure of the too-big-to-fail banks into the future.”

The faux populists of the Tea Party right have been silent on the issue. Glenn Beck dropped all populist pretensions by calling on followers to give money to the Chamber of Commerce so they can better pursue a corporate agenda. One Republican here assured me that Barney Frank caused the whole financial crisis and that he will be tossed out of office in the midterm election. (He didn’t just blame him – he hates him!) At the same time, one right wing website did publish a detailed denunciation of housing fraud.

As depressing as the lack of any real ongoing mass-based populist movement of the left or the right is another reality that The Washington Post finally spills even as millions of Americans buy into the illusion that new politicians can save us while angry voters here in Florida prepare to vote the Tea Party in to office.

“Let us tell you an Ugly Truth about the economy, a truth that no one in power or who aspires to power wants to share with you, at least until after the midterm elections are over. It’s this: There is nothing that the U.S. government or the Federal Reserve or tax cutters can do to make our economic pain vanish overnight.”

So what will it be? More money for the banks to bring them under control, more illegal foreclosures, or some type of justice for homeowners? Will this crisis lead us to demand action to break up these financial behemoths or will we just sit by and watch a new crisis sweep us deeper into our own mines of despair?

News Dissector Danny Schechter wrote The Crime of Our Time and directed the film Plunder The Crime Of Our Time. (Plunderthecrimeofourtime.com) Comments to dissector@mediachannel.org

Banks Face Mortgage Scrutiny as $49 Billion in Value Vanishes

“An investigation by attorneys general in all 50 states into foreclosure practices has fueled speculation that banks will have to purchase billions of dollars in loans from mortgage-bond investors who
will challenge the paperwork.”

Dean Baker: Foreclosure Moratorium: Cracking Down on Liar Liens

NY Times: Admimistration Waffles

White House Urges Calm on Foreclosures

Amid a rising uproar over slipshod bank foreclosure practices, members of the Obama administration on Sunday expressed anger about the revelations, but urged caution as multiple investigations into the crisis unfold.

In a piece posted on the Huffington Post Web site, Shaun Donovan, the secretary of the Department of Housing and Urban Development, wrote: “The notion that many of the very same institutions that helped cause this housing crisis may well be making it worse is not only frustrating – it’s shameful.”

But, he added, “a national, blanket moratorium on all foreclosure sales would do far more harm than good, hurting homeowners and home buyers alike at a time when foreclosed homes make up 25 percent of home sales.”

It was the second effort in two weeks by the administration to deflect pressure for a national moratorium on foreclosures. In televised comments last Sunday, David Axelrod, a senior White House adviser, urged moderation, saying there were foreclosures with valid documents “that probably should go forward.”

WHY HAS THE OBAMA ADMINISTRATION DONE SO LITTLE TO RESPOND TO THIS CRISIS?

James Kwak discusses this issue on BaselineScenario.com:

“The question is this: Why, just weeks from an election in which Democrats are probably going to get clobbered, is the Obama administration sitting on its hands, writing this off as a bunch of technicalities, and opposing a foreclosure moratorium?

Not only would it be good politics for an administration that has a hard time establishing credibility with ordinary people, but you would think a halt to foreclosures is actually what the Treasury Department wants. Over the summer, Steve Randy Waldman pointed out that Treasury essentially confirmed what many had suspected all along—the main point of HAMP (the mortgage modification program) was not to help homeowners, but to spread out the foreclosure wave over time in order to prop up housing prices and therefore protect the economy. A foreclosure moratorium, by temporarily halting the flood of foreclosed houses onto the market, would be even better.

The scary possibility is that what they’re really afraid of is systemic risk: the possibility that, as Konczal and others have pointed out, the mortgage securitization trusts (the entities that bought mortgages and issued mortgage-backed securities) could sue the investment banks, forcing them to buy back the underlying mortgages at the original cost. Since those mortgages are now worth far less than before, this would impose huge losses on the Big Six banks.

Big banks losing money isn’t what’s scary. What’s scary is that the administration may be pooh-poohing the foreclosure fraud crisis because it wants to protect the big banks once again. In other words, it’s minimizing the problem because it’s hoping that the banks will finish “reviewing their procedures,” say that everything has been fixed, and go on with their business; in that situation, it would be awkward for the administration to have come out strongly on the side of homeowners. This would basically be the operational equivalent of “it’s just a liquidity problem.”

But why? If this really could damage the big banks, why not let them take the hit and clean up afterward—especially if “orderly liquidation authority” is really the bazooka they claim it is? Why protect them now after being stabbed in the back repeatedly during the financial reform debate and in the current campaign finance cycle? Why not take this opportunity, if there really is one, to undo the mistakes of 2009?

Let’s hope there’s a better explanation than “we have created [our biggest banks], and we’re sort of past that point, and I think that in some sense, the genie’s out of the bottle.”

BUSINESS WEEK: MORTGAGE MESS ERODES PROPERTY RIGHTS

A TRADE WAR MAY BE NEXT–NOURIEL ROUBINI

Currency tensions have reached a boiling point. Everyone desires a weaker currency to sustain growth via net export improvement. But the zero-sum game in currencies and net exports means one country’s gain is some other country’s loss, and a competitive devaluation war has ensued. Currency wars eventually lead to trade wars, as the recent U.S. trade legislation threatening China shows. With the U.S. unemployment rate at almost 10% and Chinese growth at almost 10%, it is no wonder that the drums of trade wars are beating harder.

PENTAGON: GETTING READY FOR WIKILEAKS

Via European Journalism Center: Pentagon has team ready to respond to WikiLeaks Iraq documents

The U.S. Defense Department says it has put together a 120-person team to respond to the potential leak of hundreds of thousands of U.S. documents connected to the Iraq war, many of them meant to be secret. The WikiLeaks website is expected to release the documents sometime before the end of October. A Pentagon spokesman, Colonel Dave Lapan, said that the timing of the leak remained unclear, but the Defense Department was ready for a release as early as October 18 or October 19. Lapan said the team had been reviewing Iraq war files to prepare responses to a possible WikiLeaks release of U.S. documents that could feature details on battle activity and casualties. In July, WikiLeaks released more than 70,000 Afghan war documents in the largest security breach of its kind in U.S. military history. WikiLeaks, a nonprofit organization, has not disclosed how it obtained the documents. The Pentagon has demanded that the website return all classified information. (Radio Free Europe/Radio Liberty)

LETTER FROM LAWRENCE HOUGHTELING:
Danny–

I need hardly tell you that most of what we get served up by the media is crap. But the campaign to “reform” the schools by busting the teacher unions is gaining power, and a lot of dim-witted liberals (or do I repeat myself?) are failing to see through the bait and switch. Here’s a copy of what I’ve sent to friends who I believe should be thinking about these issues. Did you see Brian Jones’s piece in HuffPo? It’s very good:

Friends– Anyone paying even the smallest amount of attention must have noticed in the last few years the intense neo-liberal pressure being put on the teachers’ unions to “shape up” so that we can get on with the business (and by golly it is a business) of “reforming” America’s schools. People who would have trouble telling a school from a prison — and there are more of these than bodes well for the future of our society — know exactly how to “fix” our schools–break the power of the unions.

Those of us teaching in the schools of America know that the schools are far from perfect. But it is we union members who have a tradition of complaining about shitty schools that goes way back — unlike Bill Gates, Arne Duncan and Goldman Sachs.

But now we’re being told it’s we union members who are the problem, while foolish soi-disant liberals like Mr. Obama (sorry to be so blunt, but “the time is getting late,” as our greatest poet put it) along with media that should know better are joining various right-wing ideologues, ignorant billionaires and the ubiquitous main chancers in an drive to “reform” our schools that will inevitably make our unequal schools even more unequal. And they’re selling this selling-the-dispossessed-down-the-river act as acivil rights revolution !!! One thing that’s never in short supply in America is shamelessness.

What follows is an excellent piece by Brian Jones that appeared in Huffington Post a few days ago. Here is the link

A little taste of Mr. Jones to warm you up:

“I can’t help but think that Dr. King (or Rosa Parks, Ella Baker or Bayard Rustin) would not sign up with Bill Gates, Goldman Sachs, and the owners of Wal-Mart for such a ‘movement’. King once said, ‘the enemies of the Negro are the enemies of labor.’ We teach children that King was assassinated in Memphis in 1968, but we forget that he was there to support black workers on strike, fighting for a union. Ã¢â‚¬Â¦

“The ‘reformers’ want us to think that unions protect the adults at the expense of the children. But their non-union schools are not out-performing the traditional public schools. So why are they obsessed with attacking the unions?”

More Taibbi, More on the Tea Party

Merletta Mitchell writes:

‘m sure you’ve noticed both political parties usually change their messages after a primary election, and move towards the center for the general election. Right before everyone goes to the polls, Democrats will tone down their pleas for immigrant and gay rights, and send the Legalize Marijuana crowd to the back of the bus for a month or so. Republicans, just after the primary, will mute their “No Abortion Ever” activists, and encourage the “Abolish Everything Federal” supporters to lower their voices. You know. Just in case anyone might be listening to what they’re saying.

But this year, Republicans are not softening their edges. Listen to the current crop of candidates, and you’ll hear nothing but cries to abolish social security, the Minimum Wage, Medicare the IRS, and calls to outlaw abortion in any instance. Many GOP candidates are proposing a system that eliminates all federal taxes, other than a flat national sales tax of 25% on all purchases. If you do the math on that, you’ll realize the plan is complete nonsense. Yes, two weeks before the election, Republicans are still pledging to destroy public safety nets, in spite of constituents who depend on those institutions to survive. The young Alaska senatorial candidate who unseated veteran Lisa Murkowski, openly advocates outlawing unemployment benefits and shutting down the federal government until Repubs can undo Obama legislation they find offensive. This is no idle threat. Many GOP leaders openly plan to create a stoppage of all federal activity, until the Health Care bill, and other reforms are repealed.

What’s fascinating is how openly the Republicans discuss these goals. They publicly revel in their plans to undo most of the social legislation we’ve lived under since the 1960′s, and aren’t afraid to let it all hang out. They feel no need to run from even the wackiest of fringe notions. Not from Ohio congressional candidate Rich Iott’s fondness for dressing up like a Nazi and reenacting WW2 battles, or Christine O’Donnell’s youthful penchant for dating Satanists, or congresswoman Michele Bachmann’s claim that there’s not a single study that supports global warming.

But the most offensive act that Republicans aren’t bothered by, is the Obion Tennessee fire department’s response to a neighborhood house fire on September 29th. They stood by and watched a house burn to the ground over an unpaid 75 dollar service fee. The response to the fire was well-publicized, and was presented by Republicans across the country and as an example of tough love in an era of weak-minded liberal coddling. For its part, the Obion fire department sheepishly blamed the Forest Service for policies that somehow obligated them to sit on their hands while a neighbor’s home burned — Yes, a neighbor, as in someone you might see at the grocery store the following week, “Sorry ’bout your house the other night, ma’am. Nothing personal.” — but at least they had the sense to be embarrassed by their behavior. And you’d think that Republican leaders would denounce letting the house burn, and use the fire as an opportunity to remind the public that, sure, they hate government, but that doesn’t mean they’re cavemen. (Actually, I think even cavemen would help put out a fire at a neighbor’s dwelling). Instead, Republican journals, church spokesmen, and Glenn Beck all declared that letting the home burn was a great way to teach Americans to be self-reliant.

This is all so strange. One is waiting for it to dawn on GOP leaders that, in two weeks, they could again be in charge of a branch of government. You’d think they’d figure now is a good time to assure us that they are not out to pauperize senior citizens, or toss the unemployed into the streets, or let the sick fall untreated, all in the name of ideological purity. One is waiting for a sane Republican voice to rise above the din and remind voters that, although they believe our lives are over-regulated by Washington, they understand that governing is a responsibility, and will not haphazardly dismantle every Federal institution they can get their hands on. Yes, I’m waiting. Just one tempered, moderate voice amongst all those calls for blood. I think I’ll be waiting a long time.

View sources at http://whatrepubssay.over-blog.com.

P.S. Oh, and for the record, the Obion fire department let the family pets burn as well. Three dogs and a cat burned alive while they sat and watched. Crispy Critters probably voted for Obama anyway. Served ‘em right.

WHY THE DEMS ARE BEHIND. Mark Crispin Miller Explains:

The right’s attack on ACORN (with the acquiescence of the Democrats), and their
other, more covert steps to thwart registration drives, have obviously done what they
were meant to do: keep the great majority of eligible voters from the polls. The fewer
Americans vote, the likelier the GOP can either win for real or “win” by just enough
so that the press (and Democrats) will raise no questions as to whether such a victory
was real.

So here’s another grand bipartisan achievement; for if Obama and his Democrats
had stood up in defense of ACORN, and otherwise did everything they could to
make sure everyone who has the right to vote could do so (just as the GOP has
fervently accused them all of doing), they wouldn’t be where they are now, scared
witless that the Tea-Baggers will pull of (or seemingly pull off) a landslide.

The problem here, in other words, is not just that the Democrats are largely spineless
and/or too right-wing themselves (although that is a fact, and an immense betrayal).
The problem also is that even if they had some guts, and were far more progressive,
they still would be in trouble now (if not as dire), because so many of their natural
constituents are scared even to register, much less go out and vote.

What we need, as we have needed it for years, is a great re-commitment to the
fundamentals of American democracy; and that means going all out for universal
voting rights, and an election system not computerized, and not owned and
maintained by private companies.

The News Dissector