Matt Stoller is a fellow at the Roosevelt Institute. You can follow him at jttp://www.twitter.com/matthewstoller
I was listening to Bloomberg surveillance this morning and they were discussing the problem of skyrocketing rents mixed with tight credit for mortgages and increasing foreclosures. One of the hosts said that “everyone was waiting for the 49 state mortgage settlement” as a go signal to start foreclosures again. That’s what the mortgage settlement really is, a cultural, legal, and political signal of “all clear”. How exactly a new wave of foreclosures is supposed to help the housing market is still something of a puzzle, but it does show that the administration and most settlement pushers really do believe that the market needs to clear via foreclosures before it can reset. I guess we’ll see.
Meanwhile, here’s more evidence that the settlement is really just meant to kick off a new round of injury to homeowners. The monitor of the settlement, court-appointed North Carolina official Joe Smith, clearly doesn’t know how to do his job.
The Federal Reserve and the Office of the Comptroller of the Currency could have built a best-of-breed project team inside their agencies to conduct the foreclosure reviews mandated by consent orders last April against twelve mortgage servicers. Instead, they delegated that job to each bank. As a result, the banks chose friendly firms and some of those choices are less than arm’s-length away from the problems and abuses they’re reviewing…
“I don’t have a quick and easy answer to that right now,” Smith said when I asked him how he’s going to avoid the same conflicts of interest we’re seeing in the foreclosure reviews when he hires his own “primary professional firm.”
Finding the “appropriate balance between independence and capacity,” as Smith describes it, is not easy when sufficient independence may mean too little experience and sufficient experience may mean conflicts of interest. Conflicts of interest tempt consultants to bend the rules on behalf of current and future bank clients.
Smith has already invited about 40 handpicked professional services firms to express interest in the “primary professional firm” role. Depending on the response he gets, some will be invited to respond to a request for proposals and then subjected a highly personal final selection process.
“I’ll meet personally with the firm I’m going to depend on,” he promises. The banks, according to Smith, want to deal with one firm for settlement compliance reporting. That’s not surprising. Better the devil you know…
He’ll meet personally with highly conflicted firms before depending on them? Like a meeting, in person? Wow! That’s a devastating accountability mechanism. Then there’s this embarrassing nugget.
“If litigation against the banks continues and plaintiffs’ claims continue to contradict what I’m hearing from bank leadership,” Smith says. “I’ve got to pay attention to it.”
So Smith is saying that if bank leaders continue to lie to him, he might have to pay attention to the fact that they are lying to him?
Joe Smith seems up for the task he’s agreed to. “I’ve got a lot of stuff I have to enforce. I’m hoping all the time and money the banks are spending on the foreclosure reviews will show up as we do our work.”
I really hope Smith is not as stupid as he sounds.
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He’s that stupid or he just doesn’t care enough to do his job well.
Oh, come on, it’s his job to be that stupid. Surely he’ll do it well.
Oh, come on, it’s his job to be that stupid. Surely he’ll do it well. Buck up. We’ve got a settlement. Happy days are here again. “Happy days…” Oh, wait…
Sorry to sound pessimistic but, Mr Smith, and incidentally, just what jusisdiction in North Carolina does he hail from anyway, could be what a famous political figure of the previous century characterized as a “useful idiot.”
Best of luck to him though. Sometimes the boy scouts win one.
Hey man, he’s super-busy.
Joe Smith sounds like a pen name to me….
Robo-settler.
ya. First I thought maybe Linda Green got a sex change.
Then I thought they probably have software ‘bots for that by now so why bother.
Then I figured it’s just the “system” mocking us picking a guy with a name like that.
“settlement pushers really do believe that the market needs to clear via foreclosures before it can reset”
Reset to what? Sounds like pushers are pushing another lie.
There is no Joe Smith – no one could be this obtuse.
It’s really hard to get background on a name like Joe Smith.
“I really hope Smith is not as stupid as he sounds.”
Please stop slowballing.
Call a spade a spade.
Strong report then you powder puff the last sentence..
The guy is an intentional douchebag scumbag.
Please hit hard where it deserves it.
It was fun reading Joe’s comments in a Gomer Pyle voice.
“Well gol-LEE! You fellers sure is smart! I didn’t quite understand all yer math talkin’, but I’ll sure do my best to help!”
Thar last word would be “hep”.
He should partner with the FDIC on this. Aside from the fact auditing banks kind of is the business its in, FDIC contractors, vendors and law firms are pre-vetted as having no conflict of interest with banks.
Though I guess that might makes things too easy. Never mind.
The FDIC is no more interested in dealing fairly with borrowers than the banks or any part of the federal government. I have a suit against JP Morgan Chase, and the FDIC sided with them, primarily, as far as I can see, to cover up their collusion with JP Morgan Chase in Chase’s takeover of Washington Mutual’s assets when the OCC and FDIC closed WaMu down in September, 2008. The FDIC has stalled all discovery process for 4 years now.
No one is on the side of the borrowers or any other member of the 99%. We’re on our own.
BBC radio program Titanic – In Her Own Words: “Here we join the story with the Titanic near enough to land to talk to a shore station with Jack working on a backlog of messages…”
“…here’s more evidence that the settlement is really just meant to kick off a new round of injury to homeowners”
I believe you meant to say DEBTOWNERS and NOT “homeowners, because all these DEADBEAT douchebags actually ‘own’ is MASSIVE DEBT, and *I* for one am SICK & TIRED of bailing-out the MF’s.
Honey, the only douche-bags you’ve bailed out to date are the banks.
Edward Yingling – is that you?
The counterfeiting cartel, the banks, cheats both savers and borrowers. You should have compassion for your fellow victims.
And there is a way to fix both borrowers AND savers: Steve Keen’s “A Modern Jubilee”:
A Modern Jubilee would create fiat money in the same way as with Quantitative Easing, but would direct that money to the bank accounts of the public with the requirement that the first use of this money would be to reduce debt. Debtors whose debt exceeded their injection would have their debt reduced but not eliminated, while at the other extreme, recipients with no debt would receive a cash injection into their deposit accounts.
The broad effects of a Modern Jubilee would be:
1. Debtors would have their debt level reduced;
2. Non-debtors would receive a cash injection;
3. The value of bank assets would remain constant, but the distribution would alter with debt-instruments declining in value and cash assets rising;
4. Bank income would fall, since debt is an income-earning asset for a bank while cash reserves are not;
5. The income flows to asset-backed securities would fall, since a substantial proportion of the debt backing such securities would be paid off; and
6. Members of the public (both individuals and corporations) who owned asset-backed-securities would have increased cash holdings out of which they could spend in lieu of the income stream from ABS’s on which they were previously dependent.
Clearly there are numerous complex issues to be considered in such a policy: the scale of money creation needed to have a significant positive impact (without excessive negative effects—there will obviously be such effects, but their importance should be judged against the alternative of continued deleveraging); the mechanics of the money creation process itself (which could replicate those of Quantitative Easing, but may also require changes to the legal prohibition of Reserve Banks from buying government bonds directly from the Treasury); the basis on which the funds would be distributed to the public; managing bank liquidity problems (since though banks would not be made insolvent by such a policy, they would suffer significant drops in their income streams); and ensuring that the program did not simply start another asset bubble. from
http://www.debtdeflation.com/blogs/2012/01/03/the-debtwatch-manifesto/
Don’t get mad; get bailed out!
Take two aspirin and a short nap; it’ll help you shed that bad case of Hopium that’s blurring your vision and thickening your prose. This man deserves verbal poniards, not treacly mush ;-)
Iceland forgives mortgage debt for the population. Putting banksters and politicians on the “Bench of Accused”
“If litigation against the banks continues and plaintiffs’ claims continue to contradict what I’m hearing from bank leadership,” Smith says. “I’ve got to pay attention to it.”
Beautiful! Just beau-ti-ful!!!
Well, the good news is that more people are filing suit now than before. The better news is that, even though they’re still in very limited number of them, more attorneys are willing to take on cases against banks. The really, really great (as in scary great) is that, according to the NRA (and yes, I know that their numbers are inflated to boost sales of forearms), 290 millions Americans own one. People don’t buy a firearm just for kicks. The rage is mounting. And if they own them, they’ll use them!
Maybe we should stop that endless postponing of the inevitable, elect Romney and start the revolution Obama has tried to prevent by running with the hare while holding with the hounds. He wants to be everything for everyone (especially the banks…). At least, with Romney, we know where he stands. No second-guessing whether a revolution is appropriate with him…
T’ain’t stupidity, t’is corruption.
“If litigation against the banks continues and plaintiffs’ claims continue to contradict what I’m hearing from bank leadership,” Smith says. “I’ve got to pay attention to it.”
So we can assume that he’s currently hearing from plaintiffs facts that contradict what bank leadership is telling him. “Hey, these guys say you’re lying and if they keep it up long enough I might look into it.” WTF? He’s got to pay attention to it NOW, not just if it continues. A gaffe is when a politician (public “servant”) accidentally tells the truth right?
Yes, he really has to pay attention to all of that 25 billion that the banks are giving themselves.
Having resided in the Raleigh area since the late 60s, I can vouch for the position that the construction/real estate promotion/banking/legal sectors are populated by some of the most sophisticated opportunists in the state. Joe is probably telling it like it is in North Carolina (and, perhaps, around the country). When relatively impotent local govt officials are designated regulators, the moneyed interests invariably get their way; count on it!
Matt–It’s me, Pearl. The Pearl who promised you on Friday that I would send to you by Saturday some data that I recently downloaded (and inadvertently paid to download) regarding second security deeds (liens) that were mysteriously foreclosing subject to first security deeds here in Georgia.
Your new post provides me with the perfect opportunity to offer up an excuse for my flakiness. Indeed–it is actually an inordinate amount of crippling diligence that masquerades in me as flakiness. Here’s how it all went down, and I hope Mr.Smith is reading this.
After you, Matt, publicly accepted my offer to send you said data and after I recovered from that flattered embarrassed feeling that I used to get when the cute, popular guy from my high school used to say hi to me in the hallways, I immediately retrieved my two three-ring binders that I have (cleverly) labeled “BB & T Foreclosures: When HELOCS Attack.” After all, if I were going to send off data to Matt Stoller–then, doggone it–it was going to be right. I dug right in.
I decided that the data would be more meaningful and useful if I put it in the context of our unique and idiosyncratic nonjudicial GA foreclosure laws, so I decided to break off just a few examples, and to tease through the title/land records issues relating to just those cases. Once completed, it was my plan to send such examples along with the very long, boring index of anomalous BB & T foreclosures that was currently housed in my binder labeled “When HELOCS Attack, Volume 2.”
So–we have 158 counties in Georgia. I decided to concentrate on just one county and to work through the chains of title on the most recent few Cobb County foreclosures that seemed to fit this 2nd lien foreclosure issue. (I chose Cobb County because it is a smaller county than the county I now live in, and because of my familiarity with Cobb County–I used to live there.)
Okay. So here’s the thing. That was Friday night.
Since Friday night, I have worked my way through four–yes–just four (of the first four) of these funky foreclosures.
I cannot begin to emphasize how complicated these suckers are to sift through. It usually starts off with something like Wikipedia-ing the lender. BB & T. Fine. Oh boy!!! A lender that’s still in business–piece of cake, right? Wrong. Who did BB & T used to be? They merged with/acquired who? And who did that lender used to be and who did they merge with/acquire? So, after an hour or so–I’m at step two of a process that probably requires 200 steps–if you’re going to do it well enough to send it off to Matt Stoller or…..I dunno….determine whether or not a homeowner was illegally foreclosed upon.
That’s one thing for Mr. Smith to contemplate. Here’s another “take-away” for Mr. Smith.
I’m just a housewife and I sift through Georgia’s land records for free because that’s just how (ticked?) off I am. If someone like Mr. Smith could just arrange for these (public, btw) land records to be accessible and (ahem) free–I think Mr. Smith would find that this country is filled with thousands of obsessive people (like me) who would comb through these records for free. (Not that we should–it’s just that we do. You know the type–we’re like wind-up toys that you just can’t get to stop.)
But, the fact is, if Mr. Smith were to hire an auditing firm to sift through our land records in search of fraud–he would probably be well-advised to have the employees at such firms trained by fraudclosure groupies like me because 1) we come equipped with thousands of hours of training 2) we’re free 3) we can start tomorrow.
Well–I can’t. I’m still working on compiling that data for Matt Stoller…..
I love you! I applaud you, I cheer you, I get you… sometimes when I’m at my higher self I think I might be trying to be you…
Thank you.
(Pissed is the best fuel? Think of it — Get PIST!(TM) by Peon) (Pissed and the Peons? (Definitely TM)) (How do you get anything done?)
Hi Jessica, I recommend that you contact an attorney if the company will not give you a refund.
They are lying to him because OCC has been lyingand covering up ,for them and it is all finally got main stream attention even tho the media still fails the people.
hmmm. hand picked ‘independent’ foreclosure review consultants
called just to get some background on them(they work for GMAC/ALLY/??other names???)
it was really no different than talking to the regular ‘customer service’ loan reps who do not understand/know anything. My review is no longer in their hands. they were already covering their tracks. Joe Smith is hearing from bank leadership,” Smith says. “I’ve got to pay attention to it.” those are the key ingredients, everything else is irrelevant, plaintiff’s claims etc.
I just caught the interview on Bloomberg with IMF head Christine LaGuarde. She said that the U.S. Gov needs to push people into paying the mortgage. The GLOBALIST ideology has hijacked America. I just saw a quote on Bloomberg by World Bank head Zoellick who said in order for a nation to enter the World Bank a nation must join the IMF. Time for the U.S. to exit their one world dictatorship. It is neither constitutional or legal and is stealing our wealth, independence, freedom and National Sovereignty. Bloomberg reported a while back that the IMF is the biggest bondholder/shareholder in FANNIE MAE. The IMF was invested in the money flow not the ownership of the homes and businesses. WE THE PEOPLE funded and paid for everything via the U.S. TREASURY DEPT at the Origination. They want us to believe their lies. Their investments were mere gambles that crapped out when the housing bubble burst. Don’t believe their lies. They created this mess. Accept no fixes for $1.2 quadrillion dollars in fraud. Demand full recissions and clear title because they never lent you any money. They and their claims are all a fraud.
Bloomberg also reporting that FED earnings exceed $11 billion dollars to date from the bailout of AIG. All of this while the Government is forecasting hundreds of thousands of jobs to be lost every month all while telling us the economy is improving. CEO of Morgan Stanley says the U.S. economy is better than we are being told. That I believe. The FED is getting richer from robbing us for the unsustainable $1.2 quadrillion dollars in debt fraud of their financiers and the politicians are allowing it. We need to throw out all of the traitor politicians and the FED. How about Eliot Spitzer for third party candidate 2012?