Yearly Archives: 2011

We Speak on BNN About Bernanke, Inflation, China

We had a wider ranging chat than usual at BNN today.

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Links 2/3/11

Don’t forget to call your state AG today and ask him to get tough on mortgage fraud. Go to CrimeShouldn’tPay for contact information.

Inside the anti-kettling HQ Guardian (hat tip reader Buzz Potamkin)

Cracking the Scratch Lottery Code Wired (hat tip reader bob)

NASA Kepler finds family of habitable, Earth-size planets NetworkWorld

WikiLeaks Nominated for Nobel Peace Prize for Promoting Freedom of Speech AlterNet (hat tip reader furzy mouse)

WikiLeaks: US and China in military standoff over space missiles Telegraph (hat tip reader Paul S)

Erdogan’s Cairo speech Foreign Policy

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Wall Street Co-Opting Nominally Liberal Think Tanks; Banks Lobbying to Become New GSEs

One of my cynical buddies often remarks, “Things always look the darkest before they go completely black.”

His gallows humor comes to mind as a result of the hushed conversations inside the Beltway around GSE reform. While the shiny bright object these days in DC is health care repeal, or perhaps Egypt, in quiet corners in think tanks and trade associations the bankers and their allies are getting ready to appropriate themselves a permanent US credit card worth trillions of dollars. The dynamic that became all too familiar during the bailouts is about to repeat itself.

Barney Frank’s great moral passion is low-income housing, and that’s not an accident. The traditional alliance in financial politics since the 1950s was between liberal low-income housing advocates and Wall Street financiers. Since the 1970s, Democrats tried to balance the two sets of interests by creating consumer protections but allowing the capital markets to manage themselves. This dynamic has created a serious political problem in the last four years, because complete capitulation to the banks in the capital markets has pillaged the low-income and middle-income communities the Democrats thought they were standing up for.

It’s not that the people who made this Faustian bargain are bad so much as they are fundamentally irresponsible and childish. The breakdown of law and order in the capital markets arena has created predatory lending, and ultimately has subverted any attempt to implement new laws. Dodd-Frank not just a weak response to the crisis, but actually downright pathetic thanks to the lack of prosecution for anyone who breaks the rules set forth in the bill.

And so, we return to the reform of the GSEs.

So How Did Major Law Firms Lose Deal Documents on the Way to the Massachusetts Supreme Judicial Court?

At the time of the now famous Ibanez decision, in which the Massachusetts Supreme Judicial Court dealt the securitization industry a not-all-that-surprinsing loss by saying that lenders and servicers had to be able to produce reasonable evidence that the mortgage had indeed been transferred to the party that was trying to seize the house. The court wrote:

When a plaintiff files a complaint asking for a declaration of clear title after a mortgage foreclosure, a judge is entitled to ask for proof that the foreclosing entity was the mortgage holder at the time of the notice of sale or foreclosure…. A plaintiff that cannot make this modest showing cannot make this modest showing cannot justly proclaim that it was unfairly denied a declaration of clear title.

Also note this section of the concurring opinion by Judge Cordy:

Foreclosure is a powerful act with significant consequences, and Massachusetts law has always required that it proceed strictly in accord with the statutes that govern it….The plaintiff banks, who brought these cases to clear the titles that they acquired at their own foreclosure sales, have simply failed to prove that the underlying assignments of the mortgages that they allege (and would have) entitled them to foreclose ever existed in any legally cognizable form before they exercised the power of sale that accompanies those assignments.

We were reminded of an outstanding mystery in the Ibanez case by a story tonight by Abigail Field on the role of carelessness by lawyers in the mortgage mess.

Josh Rosner and Your Humble Blogger Discuss the Roots of the Financial Crisis on Radio Free Dylan

In addition to his weekday television show, MSNBC host Dylan Ratigan also has a regular radio/podcast. He interviewed Josh Rosner and yours truly on the origins of the financial crisis, which we both agreed started well before the housing bubble.

You can read the transcript at the site, but it has quite a few errors, and I’d recommending listening instead. Rosner is an emphatic, almost theatrical speaker, so I think you will enjoy the conversation.

Get the podcast here: http://www.dylanratigan.com/wp-content/uploads/2011/02/RFD-Ep-25-Rosner-Smith.mp3

Guest Post: Busted . . . Pro-Mubarak Thugs Are Police Officers

This is just like when the British police attacked the non-violent protesters led by Gandhi, or the police in towns in the South of the United States attacked the peaceful protesters led by Martin Luther King, Jr.

Call Your Attorney General Tomorrow, February 3, to Call For Tough Penalties for Foreclosure Fraud

A number of national consumer groups are organizing calls to state attorney generals to stiffen their collective spines. As you may recall, the 50 state attorney general investigation into mortgage and foreclosure abuses started with the usual fanfare and promises of tough action and has been trying to beat a quiet retreat since them.

The AG leading the probe, Tom Miller of Iowa, made a public promise in December to put bank
executives in jail for the crimes they’ve committed against the American people. Last week, he backtracked almost completely, and is now claiming the matter is inherently civil, not criminal. The laws certainly haven’t changed since last year, only the party line has.

Guest Post: America Might Be a More Gilded Cage than Egypt … But It Still Looks Like a Cage

There’s no comparison between the Land of the Free and Egypt … or is there?

Links Groundhog Day

FYI, Huffington Post is organizing Mortgage Madness Meetups around the country to put homeowners together so they can share experiences and resources.

Demand for fish hits record high BBC

93 Percent of Wall Street Journal’s Climate Op-Eds Misrepresent Science Alternet (hat tip reader furzy mouse)

Land fizzing like soda pop: farmer says CO2 injected underground is leaking Winnipeg News (hat tip reader David L). Why am I not surprised to learn that this does not work as advertised?

Australia’s Cyclone Yasi may destroy even ‘cyclone proof’ homes Reuters (hat tip reader Skippy, who is in the middle of this)

Yasi already causing damage in Innisfail Sydney Morning Herald. People are being turned away from shelters. And the cyclone is hitting at high tide.

Egyptians Turn To Tor To Organize Dissent Online Slashdot

Egyptian army tells protesters to ‘go home’ after Mubarak pledges not to run again Washington Post

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Florida Bar Says Attorneys Must Report Foreclosure Fraud to Judges

Florida, which has been Ground Zero of the foreclosure crisis as well as a hotbed of judicial abuses, ranging from the biggest and most active foreclosure mills to kangaroo courts known as “rocket dockets”, has taken a surprising step in the right direction. The state bar association has told foreclosure lawyers in no uncertain terms that they have a duty to report fraud to the court, and that supersedes their responsibilities to clients. And even more surprising, the duty is retroactive: lawyers are supposed to inform judges even if the home has already been sold!

This move will have the very salutary effect, if the new order were actually followed, of having judges know the extent of servicer abuses. And the side effect would be even greater skepticism on the behalf of judges (well at least those judges not bought and paid for by the banking industry). Even if lawyers complied in only, say, one-quarter of the abuses, the effect on servicer credibility, which has already taken a big hit, would be considerable.

How Servicer Junk Fees Push Borrowers into Foreclosure

A story at Huffington Post by Shahien Narisipour and Arthur Delaney, about how a couple lost their home as a result of the Administration’s HAMP program, actually serves to illustrate a broader issue, namely, how servicers’ dubious fees can put mortgage borrowers hopelessly under water.

It is critical to understand that it is not uncommon for borrowers to lose their homes thanks to servicer errors and abuses. And this bad practice has policy implications. Whenever we discuss “fix the housing mess” solutions that involve loss sharing, like giving viable borrowers a deep principal mod, some readers react that “deadbeat borrowers” are getting a free ride, and often will contend that they were irresponsible and need to take their medicine.

This black/white picture is simplistic and misleading.

Links 2/1/11

Why You Can Now Kiss Organic Beef, Dairy and Many Vegetables Goodbye AlterNet (hat tip reader furzy mouse)

Geek Culture Will Never Die…or Be Popular PCMagazine

Web Running Out of Addresses Wall Street Journal. One of my buddies had a block of Class B addresses that he sold a few years ago for $50,000 (of course, you are not supposed to sell them, but that’s how it works). I wonder what they would fetch now.

Gun dealers sell pistols ‘without background check’ BBC. Admittedly I did not look hard for this story, but it’s front page at the BBC and does not appear to be getting anywhere near such prominent billing in the US.

Estonia’s recovery holds little hope for eurozone John Dizard, Financial Times

WetKanga

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