Masters of the Universe category archive

Guvmint steps in to keep supply of foreclosures high:

While the volume of new foreclosures in Hampton Roads has been easing during the past year, the inventory of homes owned by HUD has been growing. By March, the number of homes owned by the government housing agency nationwide had climbed to 68,997, up 51 percent from the previous year, HUD reported.

Snark aside, what’s happening it that, after a lender forecloses on a home with an FHA mortgage, the government ends up stuck with the property. The lender has already scarfed up the profits from the fees at the time of the sale (and the fees at the time of the sale, not the investment in the loan, were the incentive for granting those iffy mortgages*), and the government is left holding the bag.

An “investor” can get one of these houses for about the price of a one-year-old Toyota.

This is called, I think, “flopping this house.”

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*Remember, borrowers weren’t knocking down the doors of lenders to get loans. Lenders were knocking down the doors of individuals to sign them up for loans; if you could breathe, they would sign you up. Remember all the junk mail you used to get from Ameriquest and CountryWide looking for more marks in their games of three card monte?

Having too much fun last night to check the obits for banks, so I missed the demise of three more titans of fiscal responsibility.

These are banks no more:

Signature Bank, Windsor, Colorado

Colorado Capital Bank, Castle Rock, Colorado

First Chicago Bank & Trust, Chicago, Illinois.

Kamal Sharma paid for the house in full. With cash.

Sharma, 34, had paid $85,000 in cash for the three-bedroom home in March, using money from a settlement he received from a workplace accident in which he lost half of his left foot. He planned to rent the house out for income.

After the foreclosure notice arrived, other curious things happened. A potential buyer came snooping around the neighborhood, and then a property management firm refused to list the house as a rental due to the foreclosure notice.

Unable to reach BofA for answers, Sharma headed to West Sacramento City Hall on June 22, the day his house was scheduled for auction. That’s when the bank abruptly called off the sale just as buyers were lining up.

Sharma still hasn’t heard anything directly from BofA. But in response to a Bee inquiry, the bank apologized and attributed the problem to a “data entry error” that restarted an old foreclosure action against the home’s previous owner.

When does the frequency of this sort of stuff elevate it from “error” to “strategy.”

“Attempted negligent home-icide.” Sounds like felonious conduct to me.

Harold Meyerson looks at similarities in the stories of the L. A. Times and the L. A. Dodgers and sees a lesson (emphasis added):

The stories of the Dodgers and the Times can be read as parables of a particularly vicious form of capitalism that America has come to know too well the past few decades: a new owner takes over a venerable firm and extracts what he can for himself, decimating the company and damaging the community in the process. Due to peculiarities of baseball’s institutional structure, however, Selig may have the power as commissioner (depending on the bankruptcy proceedings) to help the other stakeholders in the Dodgers — the players, the fans, the city itself — win back their team. Would that the rest of the American economy had the same institutional checks and balances as our national pastime.

Cornelius Vanderbilt, famous 19th Century Wall Street bonus baby:

What do I care about law? Ain’t I got the power?

How to keep foreclosures moving along:

It is quite simple, really. Tell persons they have to stop paying their mortgage so they can be considered for some type of mortgage relief. Then relieve them of their homes.

Although Pinkerton and Peterson live about 450 miles apart, they’ve had strikingly similar experiences with Bank of America.

Both contacted the bank before even missing a payment to see what steps to take, because they’d taken a hit to their income. Both say Bank of America employees told them they’d have to fall at least three months behind to be considered for a modification (advice that is both inaccurate and frequently given). Reluctantly, both did so.

As a result of missing payments, both soon found themselves facing foreclosure. But at least the modification process had begun, too.

Of course, it went slowly. Like millions of other homeowners, they waited months and months for an answer on their modification applications and sent in the same documents over and over again. Despite sending in those documents, both were told at one point that they’d been denied because they hadn’t sent in the required documents (another extremely common problem).

Finally, last month, both had their homes sold at a foreclosure auction, despite the assurances of Bank of America employees that that wouldn’t happen until they’d received a final answer on their application for a modification.

“The next thing I know, a guy is knocking on my door saying his boss is at the courthouse buying our house,” said Peterson.

What makes foreclosure particularly unnecessary in both cases is that Pinkerton and Peterson had made a point of telling the bank they had the means to bring the loan current even if they didn’t get a modification. And unlike many Californians, both had the option of selling the home to pay off the mortgage because their homes are worth more than they owe on their mortgage.

Now that’s mortgage relief.

Afterthought:

The headline at the link refers to bank “errors.” But aren’t “errors” supposed to be infrequent, even in baseball?

The number of banks to keep track up continues to get smaller, as Georgia attempts to consolidate its lead in fiscal foolishness:

Mountain Heritage Bank, Clayton, Georgia

An interview with Robert F. Kennedy, Jr.

It’s strategy to get your social security into the hands of banksters.

They need something to fund the next bubble.

Addendum:

Robert Greenwald, who produced the video, discusses this at the Guardian. A nugget:

Koch Industries spent $857,000 on lobbyists in 2004, one year before George W Bush tried and failed to privatise social security. They also donated $104,660 to his campaign. The attacks on social security needed more time to stew in the echo chamber before they could be mainstream, and given the increase in lobbyists, they have risen dramatically. In the first two years of the Obama administration, the brothers spent $20m on lobbying, according to the Centre for Public Integrity. And they’ve diversified their donations to a slew of Republican opinion leaders – and strategic Democrats who oppose revenue increases like Senator Ben Nelson and Governor Andrew Cuomo. But traditional lobbying has now given way to the larger, more insidious propaganda campaign aimed at changing the terms of debate on social security.

I was busy last night, so I missed the banks that went missing.

Two more assemblages of responsible fiduciaries bit the dust.

First Commercial Bank of Tampa Bay, Tampa, Florida

McIntosh State Bank, Jackson, Georgia

We need to stop treating banksters as pillows of the community.

They are more like the bedbugs of the community.

All joking aside, this may be one good side effect of the bust. Every silver lining has a cloud and all that.

I’ve always had a gut feeling that “reverse mortgages” were more predatory than propitious.

Wells Fargo & Co. (WFC), the largest U.S. home lender, said it was exiting the business of reverse mortgages because of the possibility that property values will decline further, displacing as many as 1,000 employees.

(snip)

Reverse mortgages allow retirees to create a lifetime stream of income by tapping the equity in their homes. Lenders are repaid from the sale of the home when the borrower dies or moves. Bank of America Corp., the second-largest U.S. home lender, said in February it was retreating from the business because of “competing demands and priorities” at the Charlotte, North Carolina-based company.

Flop this house:

When a house is flopped, it is usually owned by a underwater borrower who has asked the lender to approve a short-sale at a price that’s less what is owed. Unbeknownst to the owner or the lender, the real-estate agent supplies one or more opinions of valuation that show the house to be worth one amount when it is really worth much more on the open market.

When the lender agrees to take the lower price, the agent purchases the property in his name or that of a straw buyer and immediately flips the property to an honest-to-goodness buyer-in-waiting at a higher price than the one negotiated with the lender, with the difference split between the participants.

The whole damn economy seems to be based on fraud.

Much more at the link.

Deals designed to fail–Responsible fiduciaries doing the duty dirty (it’s a little wonky, but worth the 10 minutes):

More fail in SC:

Atlantic Bank & Trust, Charleston, South Carolina

I forgot to check for dustbunnies yesterday. Then, again, another failed bank really isn’t news anymore, is it?

The FDIC swiffered up another one:

First Heritage Bank, Snohomish, Washington

Bankster style:

When banking giant Bank of America swallowed up Countrywide Financial Corp. in 2008, Ray Bohannon got a new place to send his monthly mortgage check — and an extra $275.50 in escrow payments for property taxes and insurance.

He was annoyed. “When Countrywide had it I paid my own taxes,” said Bohannon, 67. “I always paid them and I didn’t think I had to worry about it.”

But Bohannon, who is semi-retired and cares for disabled people in his home, wasn’t half as annoyed as he was last month when he got a letter from his town saying his property taxes, due April 10, had not been paid. He was delinquent.

The bank sent the town a lump-sum check for all its mortgage customers in the jurisdiction. The town sent it back, along with a letter and a phone call, because it was for an incorrect amount. That was the last the town heard of it.

Also, Vermont apparently has a exceptionally complicated system for figuring property taxes.

But, really now, that’s what computers are for.