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Obama Sells Out Homeowners Again: Mortgage Settlement a Sad Joke February 23, 2012

Posted by rogerhollander in Barack Obama, Economic Crisis, Housing/Homelessness.
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Published on Thursday, February 23, 2012 by Common Dreams

by  Ted Rall

Joe Nocera, the columnist currently challenging Tom Friedman for the title of Hackiest Militant Centrist Hack–it’s a tough job that just about everyone on The New York Times op-ed page has to do–loves the robo-signing settlement announced last week between the Obama Administration, 49 states and the five biggest mortgage banks. “Two cheers!” shouts Nocera.

Too busy to follow the news? Read Nocera. If he likes something, it’s probably stupid, evil, or both.

(Photo: CNN)

As penance for their sins–securitizing fraudulent mortgages, using forged deeds to foreclose on millions of Americans and oh, yeah, borking the entire world economy–Ally Financial, Bank of America, Citibank, JPMorgan Chase and Wells Fargo have agreed to fork over $5 billion in cash. Under the terms of the new agreement they’re supposed to reduce the principal of loans to homeowners who are “underwater” on their mortgages–i.e. they owe more than their house is worth–by $17 billion.

Some homeowners will qualify for $3 billion in interest refinancing, something the banks have resisted since the ongoing depression began in late 2008.

What about those who got kicked out of their homes illegally? They split a pool of $1.5 billion. Sounds impressive. It’s not. Mark Zuckerberg is worth $45 billion.

“That probably nets out to less than $2,000 a person,” notes The Times. “There’s no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file.”

Readers will recall that I paid more than that for a speeding ticket. 68 in a 55. This is the latest sellout by a corrupt system that would rather line the pockets of felonious bankers than put them where they belong: prison.

Remember TARP, the initial bailout? Democrats and Republicans, George W. Bush and Barack Obama agreed to dole out $700 billion in public–plus $7.7 trillion funneled secretly through the Fed–to the big banks so they could “increase their lending in order to loosen credit markets,” in the words of Senator Olympia Snowe, a Maine Republican.

Never happened.

Three years after TARP “tight home loan credit is affecting everything from home sales to household finances,” USA Today reported. “Many borrowers are struggling to qualify for loans to buy homes…Those who can get loans need higher credit scores and bigger down payments than they would have in recent years. They face more demands to prove their incomes, verify assets, show steady employment and explain things such as new credit cards and small bank account deposits. Even then, they may not qualify for the lowest interest rates.”

Financial experts aren’t surprised. TARP was a no-strings-attached deal devoid of any requirement that banks increase lending. You can hardly blame the bankers for taking advantage. They used the cash–money that might have been used to help distressed homeowners–to grow income on their overnight “float” and issue record raises to their CEOs.

Next came Obama’s “Home Affordable Modification Program” farce. Another toothless “voluntary” program, HAMP asked banks to do the same things they’ve just agreed to under the robo-signing settlement: allow homeowners who are struggling to refinance and possibly reduce their principals to reflect the collapse of housing prices in most markets.

Voluntary = worthless.

CNN reported on January 24th: “The HAMP program, which was designed to lower troubled borrowers’ mortgage rates to no more than 31% of their monthly income, ran into problems almost immediately. Many lenders lost documents, and many borrowers didn’t qualify. Three years later, it has helped a scant 910,000 homeowners–a far cry from the promised 4 million.”

Or the 15 million who needed help.

As usual, state-controlled media is too kind. Banks didn’t “lose” documents. They threw them away.

One hopes they recycled.

I wrote about my experience with HAMP: Chase Home Mortgage repeatedly asked for, received, confirmed receiving, then requested the same documents. They elevated the runaround to an art. My favorite part was how Chase wouldn’t respond to queries for a month, then request the bank statement for that month. They did this over and over. The final result: losing half my income “did not represent income loss.”

It’s simple math: in 67 percent of cases, banks make more money through foreclosure than working to keep families in their homes.

This time is different, claims the White House. “No more lost paperwork, no more excuses, no more runaround,” HUD secretary Shaun Donovan said February 9th. The new standards will “force the banks to clean up their acts.”

Don’t bet on it. The Administration promises “a robust enforcement mechanism”–i.e. an independent monitor. Such an agency, which would supervise the handling of million of distressed homeowners, won’t be able to handle the workload according to mortgage experts. Anyway, it’s not like there isn’t already a law. Law Professor Alan White of Valparaiso University notes: “Much of this [agreement] is restating obligations loan servicers already have.”

Finally, there’s the issue of fairness. “Underwater” is a scary, headline-grabbing word. But it doesn’t tell the whole story.

Tens of millions of homeowners have seen the value of their homes plummet since the housing crash. (The average home price fell from $270,000 in 2006 to $165,000 in 2011.) Those who are underwater tended not to have had much equity in their homes in the first place, having put down low downpayments. Why single them out for special assistance? Shouldn’t people who owned their homes free and clear and those who had significant equity at the beginning of crisis get as much help as those who lost less in the first place? What about renters? Why should people who were well-off enough to afford to buy a home get a payoff ahead of poor renters?

The biggest fairness issue of all, of course, is one of simple justice. If you steal someone’s house, you should go to jail. If your crimes are company policy, that company should be nationalized or forced out of business.

Your victim should get his or her house back, plus interest and penalties.

You shouldn’t pay less than a speeding ticket for stealing a house.

© 2012 Ted Rall

 

Ted Rall

Ted Rall is the author of the new books “Silk Road to Ruin: Is Central Asia the New Middle East?,” and “The Anti-American Manifesto” . His website is tedrall.com.

 

 

Barack Obama, Torture Enabler April 11, 2009

Posted by rogerhollander in Barack Obama, Torture.
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by Ted Rall

America is a nation of laws–laws enforced by Spain.

John Yoo, Jay Bybee, David Addington, Alberto Gonzales, William Haynes and Douglas Feith wrote, authorized and promulgated the Justice Department “torture memos” that the Bush Administration used for legal cover. After World War II, German lawyers for the Ministry of Justice went to prison for similar actions.

We’ve known about Yoo et al.’s crimes for years. Yet–unlike their victims–they’re free as birds, fluttering around, writing op/ed columns…and teaching. At law school!

Obama has failed to match changes of tone with changes in substance on the issue of Bush’s war crimes. “We need to look forward as opposed to looking backwards,” he answered when asked whether he would investigate America’s worst human rights abuses since World War II. Indeed, there’s no evidence that Obama’s Justice Department plans to lift a finger to hold Bush or his henchmen accountable.

“They should arrest Obama for trying to impersonate a President,” one wag commented on The San Francisco Chronicle‘s website.

Fortunately for those who care about U.S. law, there are Spanish prosecutors willing to do their job. Baltasar Garzón, the crusading prosecutor who went after General Augusto Pinochet in the ’90s, will likely subpoena the Dirty Half Dozen within the next few weeks. “It would have been impossible to structure a legal framework that supported what happened [in Guantánamo]” without Gonzales and his pals,” argues the criminal complaint filed in Madrid.

When the six miscreants ignore their court dates (as they surely will), Spain will issue international arrest warrants enforceable in the 25 countries that are party to European extradition treaties. All hail King Juan Carlos I!

Which brings us to a leaked report by the Red Cross, famous for its traditional reticence to confront governments. Which means that physicians are enjoined to do no harm. Doctors are prohibited by their ethical code of conduct from attending, much less participating in, torture. (What does this have to do with Bush’s lawyers? Hold on. I’m getting there.)

The Red Cross found that CIA doctors, nurses and/or paramedics “monitored prisoners undergoing waterboarding, apparently to make sure they did not drown. Medical workers were also present when guards confined prisoners in small boxes, shackled their arms to the ceiling, kept them in frigid cells and slammed them repeatedly into walls,” reports The New York Times.

“Even if the medical worker’s intentions had been to prevent death or permanent injury,” the report said, they would have violated medical ethics. But they weren’t there to protect anyone but the CIA. They even “condoned and participated in ill treatment….[giving] instructions to interrogators to continue, to adjust or to stop particular methods.” Charming.

Since 1945, at least 70 doctors around the world have been prosecuted for participating in torture. But not Bush’s CIA torture facilitators. Not by this president. Asked to comment on the Red Cross report, a spokesman for CIA director Leon Panetta replied that Panetta “has stated repeatedly that no one who took actions based on legal guidance from the Department of Justice at the time should be investigated, let alone punished.” (There’s the lawyer connection.)

Which is similar to what Obama said about the torturers: “At the CIA, you’ve got extraordinarily talented people who are working very hard to keep Americans safe. I don’t want them to suddenly feel like they’ve got to spend all their time looking over their shoulders and lawyering up.” Don’t you just hate being micromanaged when you’re torturing people?

Ah, the great shell game of American justice. You can’t prosecute the torturers because their lawyers advised them that torture was OK. You can’t prosecute the lawyers because all they did was theorize–they didn’t torture anyone. You can’t prosecute the president and vice president who ordered the torture because they have “executive privilege” and, anyway, who would put a head of state on trial? What is this, Peru?

What’s the flip side of a victimless crime? A perpless crime?

It’s a neat circle, or would be if it fit, but drink some coffee and let the caffeine do its thing and it soon becomes apparent that it doesn’t come close. The trouble for the Bushies, and now for Obama–they’re his torturers now–is that lawyers are bound by a higher code than following orders.

Yoo, Bybee, Addington, Gonzales, Haynes and Feith were asked by the White House to come up with legal cover for what they knew or ought to have known were illegal acts under U.S. law, international law, and treaties including the Geneva Conventions (which were ratified by the U.S. and therefore hold the force of U.S. law). Since they don’t deny what they did–indeed, they continue to justify it–their presumed defense if they wound up on trial in Europe would be that they were just following orders.

However, the decision in the 1948 trials of German attorneys immortalized in the fictionalized film “Judgment at Nuremberg” makes clear that a lawyer’s duty is to the law–not his government. And not just his own country’s law–international law.

The Nuremberg tribunal acknowledged that Nazi Germany was an absolute dictatorship in which everyone answered to Adolf Hitler and could be shot for disobeying. Nevertheless, the court ruled, “there were [German] restrictions for Hitler under international law.” Despite his total legal authority within Germany, Hitler “could issue orders [that violated] international law.” Obeying a direct order from Hitler, in other words, was illegal if it violated international law. And German lawyers went to prison for doing just that.

The six lawyers about to face charges in Spain didn’t have to worry about Nazi firing squads. They were rank opportunists trying to advance their careers in an Administration that viewed laws as quaint, inconvenient obstacles. Here’s how not scared they are: Feith recently penned an op/ed in The Wall Street Journal daring–double-daring–Obama’s Justice Department to go after him.

“If President Barack Obama and the prosecutors see a crime to be prosecuted, they can act,” Feith wrote.

One can only hope. In the meantime, we’ll always have Spain.

Ted Rall is the author of the new book “Silk Road to Ruin: Is Central Asia the New Middle East?,” an in-depth prose and graphic novel analysis of America’s next big foreign policy challenge.

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