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The Bank of America leaks

Remember when I wrote last month about that Philadelphia music promoter who sued Wells Fargo — and won the right to auction off their property?

I couldn’t figure out why Wells Fargo was forcing this replacement-value insurance policy on the guy:

Rodgers made all his mortgage payments on time, but Wells decided out of the blue that he had to carry insurance for the full replacement value of his home — $1 million — and started to charge him an extra $500 a month in premiums. When Rodgers sent a formal letter to the lender questioning this, they did not answer in good time, so a court awarded him $1,000 in damages, which Wells wouldn’t pay. So the court is allowing him to sell the contents of the lender’s office to make good on the bill.

[...] “It’s a completely unreasonable demand,” says Irv Ackelsberg, a mortgage expert at the Philadelphia law firm Langer, Grogan & Diver. “Their interest is in protecting their mortgage, not ensuring that the house is rebuilt.”

Rodgers’ next step put him at some risk, he concedes now. He refused to renew the higher-cost policy. Instead, Wells Fargo bought him so-called forced-placement insurance – a policy that typically costs much more than ordinary coverage and only protects the mortgage-holder’s interests.

It took a couple of days after the Anonymous leak for the contents to sink in, but I finally connected the dots. Rodgers was more than a victim of bank abuse — this was systematic outright fraud throughout the mortgage and banking industry. It wasn’t just Wells Fargo.

Here’s what Jeff Horwitz points out in the November 2010 issue of American Banker:

  • Bank of America Corp. owns a force-placed insurance subsidiary, and most other major servicers receive commissions or reinsurance fees on the very same policies they purchase on investors’ and borrowers’ behalf.
  • Court documents show that a subsidiary of the country’s largest specialty insurer paid undisclosed “commissions” for the rights to a servicer’s force-placed business.
  • State court filings show alleged abuse in which banks charged borrowers for unnecessary insurance and backdated policies providing coverage retroactively. Often the insurance was acquired only after banks stopped advancing the premiums of delinquent borrowers’ escrowed policies, causing those cheaper and more comprehensive policies to expire. In response to questions from American Banker, federal and state officials said that some practices that industry trade groups defend may not be legal.
  • Foreclosure defense and legal aid attorneys say force-placed insurance is found on most of the severely delinquent loans in this country. If so, the cost to investors may well be in the billions of dollars.
  • With little regulatory oversight or even private investor awareness, force-placed insurance has helped make drawn-out foreclosures lucrative for servicers — far more so, in some cases, than helping a borrower return to performing status. As the intermediary between borrower and investor, servicers appear to be benefiting themselves at the expense of both.

Horwitz says JPMorgan Chase wouldn’t tell him what insurance company they used for reinsurance, but figured out that Assurant’s annual report “describes precisely such a relationship from an insurer’s perspective.”
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Sock puppets

If you came late to the blogging game, sock puppets are online commenters who pretend to be people they’re not, usually in service of some other agenda (paid or unpaid).

I wonder who got this sock puppet contract for the Pentagon.

Hmm

It’s really disorienting when geologists on my teevee sound just like/agree with astrologers:

Funny business

Some headlines write themselves.

Global warming

So now, not only is it not man-made, it doesn’t even exist.

Progress!

Sometimes it’s the little things

I’m having a great hair day! That’s my silver lining today, and I’m sticking to it.

On, Wisconsin!

I must say, with so much bad news in the world right now, I can always count on the Wisconsin labor movement to cheer me right up. Last night, Wisconsin’s Republican muckety-mucks were in D.C. for a lovely little fundraiser being thrown by Haley “Heck, I’m No Racist” Barbour’s high-powered Beltway lobbying firm.

Guess what happened!

Wisconsin Majority Leader Scott Fitzgerald and Assembly Speaker Jeff Fitzgerald along with Assistant Leaders Rep. Scott Suder and Senator Glenn Grothman; and Joint Finance Co-Chairs Rep. Robin Vos and Senator Alberta Darling are all in DC this evening enjoying a quiet evening of fundraising with their hosts the Barbour Griffith & Rogers lobbying firm. Or maybe not.

A few hundred protesters sought to make the GOP Representatives feel like they were back in the occupied Capitol building by taking over the atrium of the Homer Building where BGR LLC is headquartered. Our friends at First-Draft report that after 13th Street began to overflow, the protesters began marching toward the White House. Here’s video of the march.

Oh, and so many protesters gathered on 13th Street that the police shut down the block — because they wouldn’t all fit on the sidewalk.

On, Wisconsin!

Pee Wee

I love Pee Wee and I can’t wait to see the show. I was dragged against my will to see “Pee Wee’s Big Adventure” when it first came out and fell under its charming spell.

By the way

You can get better information about Japan watching CNN International online than the American version.


Mary Osborn Ouassiai, Harrisburg resident, at the Health Effects of Three Mile Island Nuclear Policy Institute symposium, presented by Nuclear Information and Resource Service, Physicians for Social Responsibility-Chicago and Dr. Helen Caldicott.

I’ve been listening for days now to TV talking heads explaining that potential radiation from a nuclear accident is not usually such a big deal, and they often bring up Three Mile Island as an example. (“If this is as bad as it gets, it’s all good!”) But nuclear energy lobbyists are working overtime to make sure no one looks too closely at what really happened there. If you want to know, go read this entire story from On The Issues magazine:

Becky Mease, a nurse in her late twenties at the time, fled with her husband, eight-month-old daughter Pam, and two other adults two days after the accident, when then Pennsylvania Governor Dick Thornburgh suggested that pregnant women and preschool children within five miles of Three Mile Island evacuate. They drove more than 250 miles to Ocean City, Maryland, where they stayed for about three weeks.

Recounting her experience to citizen researchers Katagiri Mitsuru and Aileen Smith in October 1982, Mease said Pam, who had been outside playing in the grass the day of the accident, had gotten violently ill with diarrhea and projectile vomiting about two days after they left. A full battery of tests at a local hospital failed to find any bacteria or foreign organism, which could cause such symptoms, so the hospital staff told them to go to a civil defense station. Mease knew radiation sickness can cause vomiting and diarrhea, so she asked the people at the civil defense office to check their car and belongings with a Geiger counter. “It just went completely crazy… It went like nuts when it went over my pocketbook, too,” she said. “They told us to go wash everything down.”

Pam’s severe diarrhea lasted the entire three weeks they were away. “Her behind was so raw that we just left it lay on diapers. Didn’t even put them on after a couple of days,” said Mease.

In the summer of 1981, when Pam was two years old, she was diagnosed with severe cataracts in both of her eyes, which her doctor attributed to juvenile rheumatoid arthritis.

The Meases’ ordeal was one of thousands area residents suffered in the aftermath of the accident. But the radiation effects weren’t confined to humans. The evidence was visible across the landscape, too, with unprecedented numbers of sick and dying farm animals and strangely mutated plants.

***
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