From 'Single Mom': "I lost everything, I am now losing the roof over our heads, my 30 year history of good credit, my self-respect. I cried at night, sobbed really, about how I had destroyed my life, how I can't look my son in the face now sometimes, for fear he will see how I let us down. "
I wish somebody in a position of power would read the emails I keep getting from foreclosed homeowners. They paint a very different picture of the world than the one we usually hear about in Washington. The Administration's doing too little, or the wrong things, at a time when their opponents are brazenly submissive to the banks. The public is frightened and angry, and nobody's listening.
The headlines tell the story, too. In the last 24 hours we've learned that a large majority of Americans want to ban bonuses at any bank that received Federal help. We also learned that more than half of those polled are worried about making their housing payments, a number that's up sharply from 2008. And we've received more detail about the unethical and illegal behavior of big bank lawyers.
People keep telling us the worst of the recession is over. But homes have lost more than a trillion dollars in value this year alone (from a leading real estate data firm). And as families watch their net worth evaporate, they're also watching the authorities look the other way as banks they rescued with their tax dollars reap record profits and continue to go unpunished for their crimes.
"I try to remember what it feels like to just live your life, to go to a movie, to read a book or take a walk without fear. I hate myself, I thought of suicide last winter, a lot when I finally faced the fact that I would be losing my home, that my son would know I failed him, us."
Not that government institutions are doing nothing about foreclosures. The Federal Reserve wants to make it harder for foreclosed families to protect themselves. That comes in the wake of another recent poll which showed that "across party lines, voters are strongly in favor of requiring financial institutions to do more to help home owners stay in their homes."
Who's speaking up for the public?
Ethics and Politics
After its own lawlessness came to light, Wall Street's posture toward struggling homeowners was predictable: "If you didn't pay your mortgage, you shouldn't be in your house. Period. People are getting upset about something that's just procedural."
That posture has supporters on both sides of the aisle in Washington. But widespread "procedural" crimes have led some people to miss payments who would not have otherwise, and the program designed to help them has extended their agony instead. Some of the people caught in the foreclosure nightmare, including some of the people who wrote to me, never even missed a payment. And what about the moral responsibility of the "experts" -- bank lenders and their hand-picked, colluding appraisers -- who told borrowers their properties were really worth those inflated values?
"I was never late on a bill in my life, I was not even late on my mortgage when I went to Bank of America for help. I was running out of time though and I knew it. I should have tried to sell my house harder, should have borrowed money and paid my way out if it, but just in time this 'Fairy Tail' HAMP came along. I spent over a year of my life on that not so Merry-Go-Round."
Whatever the Administration's shortcomings, it certainly has an ethical and political advantage over Republicans like Rep. Spencer Bachus, incoming Chair of the House Financial Services Committee, who said this last week: "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks."
Unfortunately, the Administration's actions blur the distinction between them and the Bacchanalian Republicans. We're told, in fact, that the Administration's next critical economic hire may be... a Wall Street banker! Profits aren't enough for the banks. Now they want every branch of government to renuflect before them.
Bank of America: Lawyers Gone Wild
Lawyers for Bank of America filed documents which attorneys had signed but not read, which attorneys have said is the "unauthorized practice of the law" and "filing (of) false documents." They've already confessed to it in sworn testimony. By law, that should render their foreclosure filings null and void.
"(Bank of America) put me in it [sic] trial plan. I paid what they told me to pay. Seven months later they denied me, and told me to pay them 7000, or the Act 91 goes out (foreclosure notice.) They actually increased my mortgage now. They forced me to escrow my taxes, ( my taxes were paid in full.) They say I am a bad risk because I applied for HAMP, so they are allowed to force me to escrow (which raises your mortgage you know because they are allowed to collect a cushion.)"
As a judge already noted, Bank of America learned of this attorney misbehavior a year ago, in December of 2009. Guess when they finally fired this law firm? Trick question: They haven't fired them. Bank of America received $45 billion in TARP money, and continues to receive indirect subsidies in the form of low/no-interest loans. Meanwhile the President says the government isn't doing more to help underwater homeowners because there's a chance we might "reward the undeserving."
"That was September. October was the first time in my life I did not pay my mortgage. Oh sure I appealed, but this time I am just going through the motions. I have lost all hope. I am looking for apartments, and searching for ways to tell my son what's happening... and praying that I will never have to tell him. After all he thinks we are middle class. I am not sure I can tell him we are poor without falling apart."
After all the government largesse he's received, after taxpayers (including millions of underwater homeowners) rescued his bank, what was BofA CEO Brian Moynihan's response toward demands that his bank comply with HAMP's legal requirements? "Sure," he sneered," we'll go back and check our homework again." Moynihan now says he won't accept anything but "constructive criticism."
Here's some "constructive criticism," Mr. Moynihan: Stop illegal foreclosures.
An Invisible -- and Truly Bipartisan -- America
From 'Please Sign Me 'Anonymous': "I did not purchase too much house -- and I am not in foreclosure -- but headed that way. I have no choice. Paid debt in full/arbitration award to bank -- 6 years ago -- with a subprime mortgage. But, the bank continued to report us as currently delinquent on the debt paid in full (about 30K). Have been in court for 6 years."
70% of all Americans want to ban bonuses at any Wall Street firm that received taxpayer assistance. As Bloomberg News reports, an additional one in six Americans want to add a 50% tax on bonuses over $400,000. That means more than 85% of all Americans oppose big bonuses, and 7% think they're "an appropriate incentive." The Bloomberg report adds:
"(R)esentment of bonuses and banking profits unites Americans across political, gender, age and income groups. Among Republicans, who generally are skeptical of business regulation, 76 percent support a government ban on big bonuses to bailout recipients, that's higher than backing among Democrats or independents."
Bipartisanship at last! But as much as that word is prized in Washington, that's not the kind we're seeing today. Once again we're seeing overwhelming evidence that there is a New Silent Majority, made up of the vast majority of Americans whose viewpoint goes unexpressed in the media or in the halls of government.
"Over those 6 years -- we were sent back to arbitration, appealed (circuit court refused to address), refiled for second arbitration, arbitration never arbitrated, had legal case closed, then court reopened, brought in mortgage company for fraud, court closed that case -- but allowed consolidation with original court case, asked to vacate second arbitration order and twice turned down by court, arbitration continued to not arbitrate, sent to mediation -- twice for long period with no resolution.
The New Silent Majority position seems to have a consistent pattern: Roughly 70% of Americans hold similar opinions about an economic issue -- government spending, deficits, taxing the wealthy, deficits -- but those opinions are considered too 'fringe' for serious debate in the halls of government.
"Just want out of this mortgage.and to be able to refinance with a clean slate and reasonable terms. We are senior citizens who have owned our current home for 25 years -- and have NEVER missed a mortgage payment. "
Epidemic of Fear
Meanwhile, the number of Americans concerned about their ability to make the rent or mortgage payment has risen from 37 percent in 2008 to 53% today. A White House spokesperson responded:
"From day one the Administration has done what was necessary, including taking a series of steps to stabilize the housing market and putting forth programs to help keep more Americans in their homes, target aid to the hardest-hit states, and help unemployed and underwater homeowners."
From 'Foreclosure -- tired of fighting': "Since June 2009 when my salary was reduced drastically... to $$31,200, I still do not qualify for a HAMP remod. In October 2009 after 2 months behind in payments I was offered a trial modification on home homestead home in Florida from Chase reducing my payments from $2600/mo to $1800/mo. I thanked GOD someone wanted to help me save my home."
HAMP, the White House program to assist underwater homeowners, has issued $992 million in homeowner assistance as of the last quarterly reports. TARP alone provided $532 billion.
" ... then my case was reassigned to a new loan officer and I had to resubmit my paperwork all over again, I was happy to do so as they said everything was looking good and they just needed the paperwork to sign off on. After 6 months of weekly calls and several reassigned loan officers, the first week in January I received a call from Chase saying my Loan Mod was denied and I need to start the process all over again. I pulled out my binder and I gave them the same information that I had original given in the first process."
The Administration's efforts have been tentative or counterproductive. A Congressional Oversight Panel noted that the HAMP program "will modify less than 5% of the loans that will go into foreclosure by program end." HAMP has also hurt a lot of homeowners along the way. Why hasn't more been done? Here's what President Obama said in late October:
"The biggest challenge is how do you make sure that you are helping those who really deserve help and ... can get back on their feet, make their payments and move forward and stay in their home versus either people who are speculators, own second homes that they really couldn't afford because they'd gotten a subprime loan, and people who through no fault of their own just can't afford their house anymore because of the change in housing values or their incomes don't support it."
"She runs her numbers and says the while the first application was denied the HAMP requirements have changed and I am not eligible for a monthly payment of $2400 ... They never return my calls and I never knew what was going on. Several times I had to resend them paperwork I know the received because with them I could track by emails sent to them."
"Long story short I just received a new loan modification from Chase I now can pay $2800/mo for a three month trial. Maybe my thought process is alittle skewed but did anyone do the math here. If I couldn't afford the original loan of $2600 where am I going to come up with $2800?"
"Tired of Fighting" was a victim of the big bank/HAMP game known as "extend and pretend." Chase was able to use the President's program as the cruelest kind of lure. This homeowner clearly is unable to afford this home any longer - not through any fault of her own, but because bank greed shattered the economy, especially for older workers like her. By giving her hope that her home might be saved, HAMP helped Chase Bank squeeze another year or so of payments out of her before leaving her broken financially.
JPMorgan Chase CEO Jamie Dimon is all over the media complaining about his hurt feelings and fighting attempts to regulate banks. Dimon got a $16 million bonus last year, on top of salary and stock options. "Tired of Fighting" was drained of her last cash reserves and left homeless and hopeless. Even if you believe she didn't "deserve" any help (I strongly disagree), that was a cruel thing to do.
Single Mom: "(Your) article is like morphine to the dying. All this time, I blamed myself."
Despite widespread bank criminality, despite the massive loss of personal wealth, despite the rescue of banks that still won't do their share, and despite the fact that help for struggling homeowners would help get the economy moving, we're not seeing the leadership we need.
Anonymous: "As a result (of bank malfeasance) -- 1) have invalid mortgage title (confirmed by title company). 2) cannot refinance due to invalid mortgage title and destroyed credit. 3) mortgage servicer reports we have not paid a payment in 3 years -- BUT WE HAVE never missed a a payment - never late. 4) new mortgage servicer claims we requested a financial hardship loan mod - BUT WE NEVER REQUESTED A LOAN MOD - and continue to pay high mortgage payments. 5) Cannot file for bankruptcy because we have equity in home. 6) cannot refinance out of adjustable high interest rate mortgage due to the above."
Headline: "Suit: Chase Bank ransacked home of man on his death bed": "Chase says (an elderly veteran) had fallen behind in payments. And if a loan is delinquent, Chase says it has the right to enter a house. 'We followed our policy to maintain a mortgaged property..." The daughter says the bank told her the payment was up to date.
Nearly 1 million foreclosures were filed in the last quarter. Four million homeowners face foreclosure this year and another 11 million are underwater. And yet the banks maintain they have no responsibility for the situation -- except that they may allow in an unguarded moment that their underwriting got a little sloppy. Underwater homeowners don't spend, and consumers who don't spend can't stimulate the economy. There are strong moral and economic arguments for helping them the same way we helped the banks. that, say the powerful, would reward the "undeserving."
Last year Bank of America gave out $4.4 billion in bonuses.
Powerless to Help
Anonymous: "Still in litigation -- but by the time it finishes -- will be in foreclosure -- cannot continue to make high payments. We will lose the equity in our home.
"Thank you for your article."
I appreciate the kind words, but thanks for what? I've accomplished nothing. If anybody in power happened to read this, I'd probably be dismissed as another member of the "sanctimonious" and "purist" left -- even though I'm more moderate on the bonus issue that three-quarters of all Republicans -- and even though a smarter and fairer approach would be the most practical course of action our leaders could take. We're on a collision course with political and moral disaster, and nobody's listening.
In the meantime, the emails keep on coming.
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light.
He can be reached at "firstname.lastname@example.org."
Website: Eskow and Associates
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow