It’s always more important to protect the banks than the rule of law.

It’s the bankers’ world, we just live in it. Go read Marcy:

So what does that mean? At the end of the year, you’ve paid the bank $10,000, a quarter of your income. But what you owe the bank has gone from $40,000 to an even larger number because they’re charging you 30%. So your debt is larger. So the next year you have to give a quarter of your income again to the bank. And the year after. Until you die.

This is indentured servitude. And we criticize other countries for having indentured servitude of this kind, bonded labor. But in America we instituted this in 2005 with almost no discussion of the consequences. But what it did was encourage the banks to engage in even worse lending practices.

We’ve made it so difficult for individuals to discharge their debt and have this fresh start, and yet it is just taken for granted that a corporation or a company can blow up and then they can file for bankruptcy and then they can start over.
We give rights to corporations that we don’t give to ordinary Americans. One of my proposals in my book Freefall — one of the ways to deal with this foreclosure problem, the fact that one out of four Americans who have a mortgage are underwater: They owe more money on their home than the value of their home. Their home used to be what they used as the reserve for paying their kids college education, for their retirement. Now it’s a liability, not an asset.

So what I’ve argued is, we have these laws called Chapter 11 to give a fresh start to corporations. We say it’s very important to be able to do this quickly, we want to keep jobs, we want to keep the corporation going as an ongoing enterprise.

Families are as important as corporations. Keeping kids in school, not forcing them out of their home, keeping the community together, is certainly as important as keeping a corporation alive.

Continue reading “A neo-feudal state” →

Naked Capitalism:

Bank of America appears to have improved the state of the art in the creative foreclosure procedures department. I started hearing a few months ago about a sudden and suspicious increase in the number of foreclosures Bank of America was making in its own name. BofA was in effect saying that it owned these loans and had never securitized them. That seemed questionable, since the bulk of Bank of America’s mortgages had been originated by Countrywide, and Countrywide has said in its SEC filings that it securitized 96% of them. Why would the courts see such an explosion in foreclosures in the relatively small proportion of mortgage that BofA had kept on its books? Lawyers suspected that BofA was falsely claiming that it owned the loan to circumvent questions about standing (if the note had not been conveyed to the trust properly, then the trust might not be able to foreclose).

We now have some evidence that these suspicions are correct. A bankruptcy attorney in Kentucky has been working with clients who have lost their homes in foreclosures in the name of Bank of America. After taking the house, the bank has been filing deficiency judgments for the remaining mortgage balance. The attorney files a Chapter 13 bankruptcy. In the example we have here, Bank of America next files an objection to the bankruptcy plan. The attorney for Bank of America makes a response to the objection. Before the confirmation hearing, the same attorney files a second objection to the plan in the name of a Countrywide trust.

The attorney for the borrower, needless to say, raises all kinds of hell in the hearing, and wants an explanation of how two creditors, each representing the same debt obligation, can each object to the plan, when neither has yet filed a Proof of Claim.

Here is the juicy part. A Proof of Claim is filed later that day. It shows a series of assignments that were executed after the judgment (meaning after the house was taken by BofA) and after the borrower’s attorney filed the bankruptcy petition. The assignment is from MERS to Bank of America executed on September 29. The second assignment is from Bank of America to trust CWABS 2003-B6. This assignment has not been recorded in the land office as of November 10. And even more fun, the allonges look odd.

SEC filings show the loan as asset of CWABS 2003-BC6.

So we have:

1. Either Countrywide lied in its 2003 SEC filings or the loan was never on Bank of America’s books. Which would you believe?

2. Even though Countrywide appears to have intended to convey the loan to its CWABS 2003-BC6 trust, it appears never to have completed the steps. The assignments are legally void by virtue of being out of time and by being inconsistent with conveyance chain stipulated in the PSA (which would have been from Countrywide through at least one intermediary entity to the trust. So the trust does not now own the note either.

This means the odds are awfully high that Bank of America committed multiple frauds on the court, first on the state court in the foreclosures process, and now on the Federal bankruptcy court.

Bank of Americ Proof of Claim– Suedkamp

I knew about this, but I kept forgetting to write about it:

The leaders of President Obama’s deficit commission sparked criticism from both sides of the political aisle Wednesday for proposing broad cuts to federal programs.

But the National Commission on Fiscal Responsibility and Reform has also come under attack for its unusual approach to staffing: Many of its employees aren’t employed by the panel at all.

Instead, about one in four commission staffers is paid by outside entities, many of which have strong ideological points of view about how to tackle the deficit.

For example, the salaries of two senior staffers, Marc Goldwein and Ed Lorenzen, are paid by private groups that have previously advocated cuts to entitlement programs. Lorenzen is paid by the Peter G. Peterson Foundation, while Goldwein is paid by the Committee for a Responsible Federal Budget, which is also partly funded by the Peterson group.

The outsourcing has come under sharp criticism from seniors’ organizations and liberal activists, who say the strategy is part of a broader conservative bias favoring painful entitlement cuts over other solutions. The fears of some liberal groups appeared to come true on Wednesday, when the commission’s two leaders recommended significant reductions for Social Security and other social-welfare programs.

Bruce Reed, the panel’s executive director, defended the staffing arrangement as fiscally responsible and said the staff includes a broad range of views. Other staffers paid by outside entities include an analyst from the liberal-leaning Economic Policy Institute and a Clinton administration official who now teaches at Johns Hopkins University, he said.

“We’ve got wonks from across the spectrum who have been working on this issue for years,” Reed said. “Every possible voice from left, right or center has a voice on the commission.”

But Barbara B. Kennelly, a former Democratic House member from Connecticut who heads the National Committee to Preserve Social Security and Medicare, said the commission’s staffing structure is “unprecedented” and casts further doubt on its fairness.

“Taxpayers fund the commission and they should work independently of Washington lobbyists and power brokers,” Kennelly said. “This is the type of shenanigans that average Americans are so upset about right now – that money talks and everyone else is left out.”

Cenk Uygur says that’s what Social Security is:

But we have to thank them for making their intentions undeniably clear. This Deficit-Reduction Commission has nothing to do with the deficit. It never did. I was always thought it was an excuse to cut Social Security to pay for the tax cuts that went to the rich and ate up the Social Security surplus. It turns out, it’s more audacious than that. It cuts Social Security to pay for a whole new round of tax cuts for the rich. The balls on these guys.

A new poll out by PPP indicates that when asked how to balance the budget, 43% of real Americans said tax the wealthy, 22% said cut defense spending and only 12% said cut Social Security. They didn’t stutter. That’s crystal clear. If some of our current politicians make the mistake of backing these cuts for Social Security, those numbers are going to come back to bite them. And they’ll be our former politicians. I, for one, will work the rest of my life to kick out of office anyone who signs off on this robbery. I don’t give a damn what party they claim to be from. That includes the president.

Through all of my frustrations with the president, I have never called for a primary opponent against him in 2012. And I don’t know any other established progressive that has. If he pushes for this plan, he should definitely get a primary challenger. Because I couldn’t vote for a guy who agreed to rob the middle class like this. This is definitely the last straw. If he does this, then he was never on our side to begin with.

So I’ve been perusing the Catfood Commissioners minority report (keep in mind, this was never approved by the full panel), and I can’t see this pile of steaming excrement as anything other than a cynical political ploy. I mean, just look at the content: It’s a draconian collection of third-rail issues that will never, ever be passed by Congress.

It lays out options for overhauling the tax code that include limiting or eliminating the mortgage interest deduction, the child tax credit and the earned income tax credit. It envisions cutting Pentagon weapons programs and paring back almost all domestic programs.

The plan would reduce cost-of-living increases for all federal programs, including Social Security. It would reduce projected Social Security benefits to most retirees in later decades, though low-income people would get higher benefits. The retirement age for full benefits would be slowly raised to 69 from 67 by 2075, with a “hardship exemption” for people who physically cannot work past 62. And higher levels of income would be subject to payroll taxes.

But the plan would not count Social Security savings toward the overall deficit-reduction goal that Mr. Obama set for fiscal year 2015, reflecting the chairmen’s sensitivity to liberal critics who have complained that Social Security should be fixed only for its own sake, not to help balance the nation’s books.

It’s designed to generate a tsunami of outrage.

They haven’t had much luck with any of these proposals, so I have to believe they’re deliberately pushing these ideas to get voters to accept the “reasonable” compromise proposal.

Except, of course, the final version won’t be reasonable, either. As As Nancy Pelosi said today, “This proposal is simply unacceptable.”

The Villagers (the same people who hate Pelosi), of course, love it. But then again, they love anything that allows them to look Serious and for us to be punished yet again. They know the game: They praise this, knowing it’s politically DOA, because they know it will grease the skids for the real austerity.

If I had to pick the real serious proposals from the final package, it would include raising the retirement age.

I know, I know. Sounds reasonable, right? “People are living longer.”

Let’s be clear now. “People” are not living longer — rich people are living longer. Working class people who can’t afford quality medical care are falling behind on longevity. As Paul Krugman wrote today, “So you’re going to tell janitors to work until they’re 70 because lawyers are living longer than ever.”

I’ve written about this before: Raising the retirement age is a de facto benefit cut for all Social Security recipients. It’s also a tax increase, because you’ll have to work longer and pay into FICA longer.

So this isn’t a deficit reduction proposal. It’s a deep cut in Social Security benefits.

And now that the voters have seen what they’re up to, I don’t think they have a snowball’s chance in hell.