Mandelman Matters » mortgage crisis

OneWest Bank DOES IT for Lisa in Massachusetts! (DOERS ROCK!)

Mandelman — Tue, 07 Feb 2012 20:44:53 +0000

It all started early last Saturday morning when I got a call about a homeowner in Massachusetts scheduled to lose her home to foreclosure sale in just two days…

Now, I don’t mind telling you that I had just posted a DOERS ALERT the day before, and to be honest they’re all a lot of work and I really didn’t want to have to write another one the very next day… I was exhausted and looking forward to sleeping for the next couple days.

The client’s name was Lisa Ferrecchia, who I was told was one of the thalidomide babies. At the time, I did’t know if that meant she was part of a sister singing trio… you know… The Thalidomide Babies,” or what, but I’d soon find out.

So, I read about thalidomide and OneWest Bank most of the day and then started writing a DOER ALERT, which was finally ready to post at about 5:30 PM on Sunday afternoon. I was beyond tired and feeling kind of awful, if you must know. I hadn’t been outside of my study for yet another weekend straight… my wife wasn’t saying anything, and my daughter was saying she missed me. But what could I do? I mean, seriously? Lisa Ferrecchia’s home was to be sold the very next day at 3:00 PM in Massachusetts.

Plus, in Massachusetts, do you know how they do it? They auction the home off right on the soon to be ex-homeowner’s front lawn, for all to see. I’ll tell you what… that is some 17th century nonsense right there. As in… Me thinketh she is a witch! Aye, a witch! Might as well be making the homeowner walk around with a scarlet ‘F’ on his or her clothing. I figured that Lisa had probably spent a lifetime seeing people stare at her, and the thought of her home being auctioned off in front of her neighbors… well… that just was not going to happen. Not today.

I had spoken to attorney Glenn Russell early on Saturday, and told him to have a skeletal bankruptcy filing ready just in case. I had just spent the whole weekend behind closed doors in my study typing and posting at 5:35 PM on Sunday, I wasn’t at all sure my DOERS would DO it in time… or even could DO it in time. And if that was the case… why the heck did I just blow the whole weekend with my family… again. I was conflicted and unsure of everything.

To make matters even worse… and I wouldn’t normally share this publicly… but Steve Diberrt of MFI Miami called me on Sunday evening… he was in Denver for something foreclosure-related. He had read my DOER ALERT post and asked me what I was doing about Lisa Ferrecchia. I said I posted a DOER ALERT and my DOERS would handle it. He asked if I had called Glenn Russell and if Glenn was going to file a TRO, etc. etc. to stop the next day’s sale. He asked a bunch of other technical legal questions until I had a headache.

I said there wasn’t time for any of that, but my DOERS would handle it. He wasn’t buying any of it. I said, don’t worry… I’m sure it’ll be fine.

And he replied: “Dude, I think your nuts. I’ll call Glenn and find out what else can be done.” He hung up.

“Oh, ye-of-little-faith-shithead,” I thought to myself.

We all know what happened next, right? OneWest Bank’s CEO emailed me late on Sunday night saying that he’d look into the situation the next morning… and the next morning OneWest contacted Lisa… told her that the sale had already been postponed… and that they’d do everything they could to get her a loan modification that would allow her to keep her home. I wrote to tell everyone the good news, and said that I was certain that OneWest Bank would do exactly what they had promised. Of course, not everyone was sure whether I was kidding… I was right… or I was a fruit loop.

One West said that they would let Lisa know by today… Tuesday, February 7, 2012. And so here we are…

OneWest Bank Called Today and Lisa Just Couldn’t Be Happier!

Yes, ladies and gentlemen, it’s a HAMP modification… 2 percent for 40 years.

Her mortgage payment went from $2700 and change… to $1500 and change.

~~~

DOERS you DID it again!

(Hey, Dibert… how do you like me now?)

Mandelman out.

Our DOERS DID IT Again… One West Bank Stops Sale in East!

Mandelman — Mon, 30 Jan 2012 20:37:31 +0000

Who Let the DOERS Out? Who-Who-Who-Who-Who?

First thing this morning and in response to our DOERS… One West Bank STOPPED THE SALE of Lisa Ferrechia’s home in Milford, Massachusetts… asking that we please call of our DOERS! They have assured Lisa that they are looking at her situation at the highest levels and will do everything possible to make sure she can keep her home.

DOERS… you did it again. That’s 7 out of 7 DOERS… we really are DOING it and making a real and very meaningful difference not only for the homeowners whose homes we’ve saved by helping them get sustainable loan modifications, but we’re also helping in a bigger picture sense as well by calling attention to situations that no one should want to see happen.

Obviously, we’ll be staying on top of what’s going on in Lisa’s case, but I’m quite confident that One West Bank is going to find a way for Lisa keep her home, they responded quickly… as a matter of fact the CEO emailed last night… Sunday night… to say that they would be looking into the situation first thing this morning… which they obviously did… and we thank them for being responsive and considerate in this instance.

So, thank you ONE WEST BANK. Let’s get this done for Lisa and thousands of other homeowners… let’s make this into a win-win scenario, instead of the lose-lose-lose situation we have today.

But, we also recognize that we still have a long way to go before this fight will be over. So, we need more DOERS signing on every day. We can’t rest on our laurels, our voice needs to get stronger so we can take on bigger and bigger challenges. Remember what they say… politicians won’t see the light until they feel the heat. So, here’s what you need to know about DOERS…

OFFICIAL DOER STATEMENT OF PURPOSE

BY MARTIN ANDELMAN & ABIGAIL FIELD

We, Mandelman & Field, are joining forces to end the foreclosure crisis. We’ve been writing about the crisis—Mandelman for more than three years and 600+ articles, Field for about half that—but frankly, writing’s not enough.

We need to DO more to solve the massive crisis our country is enduring. We must act now, because the crisis we’re in will get much, much worse. This year is an election year… the time for decisive action is now.

But by ourselves we can’t do enough. We need YOU to DO too.

Mandelman has already inspired a core group of DOERS, people who have already solved the mortgage modification nightmares of six people. But to solve the problems faster than one mortgage at a time and to attack bigger problems, we need more DOERS… a lot more.

Here’s what we DOERS DO:

1. We take action.

We are knowledgeable, active and involved. We know that our actions make a difference because we’re all working together, multiplying our impact. That’s why we continue to take action, each and every day.

2. We know there’s no “try” in DO.

Either you DO, or you don’t.

3. We build big victories out of little victories.

We’re singles hitters with a really high on base percentage. We scratch out the runs it takes to win every way we can. Our actions are simple, discrete, and quick to do, like sending an email, making a call, mailing a letter.

We work this way because swinging for the fences wastes lots of effort and results in more strikeouts than our country has time for. Besides, it took years to make the mess we’re in, and there’s no silver bullet that fixes everything all at once. We have to do many things, and collectively they will make the big changes we need.

4. We focus on our similarities, not our differences.

We’re not about right and left… we’re about right and wrong. Frankly, our nation’s policies on housing and banks are so bad, we have plenty of solid common ground for everyone. Since we’re focused on fixing those two interrelated issues—housing and bank policy—our divisions on other issues are irrelevant.

5. We believe in “We, the People.”

We join forces to make change because we are Americans. It’s our Constitutional birthright to be in charge, to make change together. And we know if we act together to make good policy, we all benefit.

6. We recruit more DOERS, because size matters.

To solve the big problems we need to be correspondingly big. We’re not playing games. We are DOING to win.

7. And we are in it to win it.

We are relentless. We take our tasks seriously. We do our best. We never let down our fellow DOERS by not DOING our individual parts.

SO, HERE’S THE BOTTOM-LINE…

In 1954, Brown v. The Board of Education didn’t end segregation. It took ten years and hundreds of thousands of people marching in the streets before President Johnson signed the Civil Rights Acts of 1964-65.

In 1971, President Nixon saw from his White House windows, tens of thousands of people protesting the war in Viet Nam and became paranoid that he would lose the election in 1972. It drove those around him to break into the Democratic headquarters and led to the Watergate scandal… even though he won reelection in 1972 by a landslide.

And more recently, in 2009, news of AIG bonuses totaling $160 million and a corporate retreat at the St. Regis luxury resort in Southern California, caused people to take to the streets, outraged that a company recently bailed out by the taxpayers would be allowed to pay out what appeared to be extravagant bonuses. Within two weeks the House of Representatives authored and passed a bill that would have placed a 90 percent tax on those and other bonuses. It was killed in the senate, of course, but that’s not the point.

The point is that our elected representatives can move quickly… if they are properly motivated.

To become a DOER you only need to DO 3-4 things and they’re all easy:

Click here to SUBSCRIBE to Mandelman Matters. That’s the only way you’ll get an email whenever there’s a new post and when you see “DOER ALERT” in the headline, you know it’s time to DO something that will matter.
Send an email to me at mandelman@mac.com. Just type: I’m a DOER or something close in the subject line. I’ll add you to the database of DOER emails. When we want the element of surprise I won’t post it, I’ll email you the plan.
Actually check your email from Mandelman Matters or from mandelman@mac.com and when you see the words DOER ALERT, open it and read it right away or certainly ASAP. Not the next day… that day. Then, assuming you want to help make a difference, read it and send an email to the CEO’s email while I always list at the bottom of the DOER Alert. Of course, the more thoughtful the email the better, but it doesn’t have to be a long email if you’re pressed for time. Just a few sentences is just fine and dandy.
Help recruit other DOERS. Send others links to articles on Mandelman Matters and tell them you’re DOING it and it’s working.

That’s all there is to it, and all I’m asking for is a four month commitment. After that, if you agree that it’s worth DOING, then give me another four months. The more DOERS we have the larger the problem we can tackle.

Consider this… right now there’s all this controversy over the 50 state AG settlement. A few days ago many people thought the deal was about to be announced and people were very upset. Well, if we had 100,000 DOERS now, we could stop that deal from getting done for sure.

Just think of being a DOER as being a way to “occupy” without leaving your home, sleeping on the ground, getting arrested and sprayed with pepper spray. It’s also more effective than doing those things. I’m not saying you shouldn’t do them, but I’m telling you that DOERS can stop this mess in its tracks this year or next.

Time Matters… A Lot.

DO you not see that we are losing this war… because we definitely are. More than 3,000 evictions a day, seven days a week. Foreclosures not slowing a bit. And interest rates are still low. What’s going to happen when they are six percent or even higher?

And this is an election year… this is when politicians are the most concerned with reelection. We have to act and it must be now. Period. We’re doing the wave and we need you and everyone else or it doesn’t look like a wave. And even though it’s just begun, it’s unquestionably working. What else is working even half that consistently… NOTHING, I’m sorry to say.

Please don’t delay… DO it today… it’s easy to DO… and to win, we need you.

Becoming a DOER and committing to our code of action is easy. Just send an email to either one of us:

Martin Andelman at: mandelman@mac.com

Abigail Field at: ACFRealityCheck@yahoo.com

And also don’t forget to subscribe here: SUBSCRIBE

All you have to write in the message is: Count on me to be a DOER. Or, just say: I’m in. Tell me what to DO.

And we’ll be in touch. Something like once a week we’ll call on you to DO something important…

Something that MATTERS, get it?

It feels really good to be a DOER, ask anyone who is.

Mandelman & Field… OUT!

DOER ALERT: Wells Fargo this is Unnecessary, Unreasonable and Unthinkable

Mandelman — Sat, 28 Jan 2012 06:42:31 +0000

Look, Wells Fargo… we have to talk. And frankly, I’d appreciate it if you’d jot down a few notes as we go because I really don’t want to have to repeat myself on this subject… and dear Lord, trust me when I say that you don’t want me to have to repeat myself either.

Here’s the deal…

When you’re dealing with a family that has lived in their home and been a part of their community for 15 years… who have raised four children in that home… and has contacted you because the father in that family who works for the school district has been seriously injured in a work-related auto accident and placed on workers comp… right after his wife lost her SECOND JOB (that’s right, she works two jobs), and they have a special needs child, a beautiful daughter who is autistic… you KNOW you are dealing with VERY RESPONSIBLE PEOPLE, right?

Because the parents I just described are the embodiment of the word “responsible,” you do see that, right?

So, when you say to them, “Let’s get you qualified for a loan modification.” you’re doing the right thing. And when they immediately send you all of their information and documentation, including updated paystubs and bank statements every 30 days for six months, you shouldn’t be all that surprised.

Even so, their Wells Fargo representative was quite surprised, so much so that he actually expressed to them how surprised he was, saying that they had done an outstanding job getting together everything he asked for, right on time, and exactly as he had instructed. Jeneane, the wife, explained that she used to be an escrow officer so she was quite familiar with preparing and submitting such paperwork.

Not that doing everything right and on time mattered all that much, because Wells still filed an NOD and now has scheduled a sale date for February 3, 2012.

Of course, Grant… their Wells Fargo representative, was very comforting when he explained that they should not worry about that pesky little sale date, because if a decision wasn’t made by the underwriting department, he would simply request that the sale be postponed. Well, that certainly must have been a relief for these parents to hear, I’m sure.

A little more than a week before the sale date Jeneane called again to check on how things were going but wouldn’t you know it, her Wells Fargo specialist, Grant, was just transferred to a different department. A department without phones, apparently.

She was told that she would have to wait to speak with her newly assigned specialist until he or she was assigned. (That’s what your people said, Wells Fargo. I’m not responsible for that sentence.)

So, Jeneane called back again yesterday and was told that someone had been assigned but, darn the luck, they weren’t available, so she asked the person who answered the phone if her home’s sale date had been postponed or if there had been an answer on their loan modification.

Now, stay with me here because this is the sort of thing that you read… and it makes your hair hurt.

The Wells Fargo woman said that it appeared that they needed some additional documentation. Jeneane is quite adamant that this was not true, because she had just sent Grant 36 pages last week. He had said that everything was there and he even told her that he had scheduled the postponement while they were on the phone.

Are you getting confused? Yeah, well aren’t we all.

(I have to tell you, when it comes to paperwork being together, I believe Jeneane 100 percent. This woman knows her paperwork. She’s a paperwork Queen, you might even say.)

Nonetheless, Jeneane asked what Wells needed and was told she needed to send in her 2010 tax return. Jeneane replied that she had just sent in her 2010 Tax Return last week and was quite sure that it was there. The woman placed her on hold for 10 minutes (kind of a long time to be on hold, don’t you think) and when the woman returned she said: “”Yes, I have it,” which by the way is not the proper response in that situation.

Just so you know… in that situation you’re supposed to say, “Oh, I’m sorry… you were right… we do have it.” Or something to that effect. I’m not trying to be picky here, in fact my expectations of Wells people have been lowered to such a degree that if they don’t spit or throw up in the middle of a conversation, I consider it pleasant.

The Wells woman then explained that the delay is because… are you ready for this: How does the bank know that Mr. Stover will EVER return to work full-time? Can you even imagine? Jeneane pointed out that he is back to work half time, and everyone certainly hopes he ultimately recovers 100%. They think he will… they’re prayers are… OMG. Would someone like to explain to me how in the world Wells Fargo would go about answering that question. Do they have a direct line to the Almighty… I mean, Lloyd Blankfein? I mean… rude much?

Since the tax return thing didn’t stick… and the obnoxious unanswerable question didn’t seem to help… the next thing the Wells woman thought of to say was: They won’t approve a postponement unless there was approval of the loan modification.

Come again? Say what? Ex-screws me? Wells Fargo won’t approve a postponement of a sale… unless there’s approval of a loan modification? Go over that sentence again for me… real slow. Wells you are starting to make my hair hurt. Does that make sense to ANYONE? So, noodle me this:

If there was approval of a loan modification, why would there be a sale date to postpone?

Jeneane then asked if there were any notes in her file from last week when good old Grant said that he had requested the postponement. She said no… and I have no trouble believing that. In fact, at this point I wouldn’t have any trouble believing that there wasn’t even a file in which to potentially put notes.

Then the woman said, “You can’t even request a postponement until one day prior to the sale date.”

I’m getting dizzy… is it hot in here?

Then the woman told her to contact the trustee… Jeneane had never heard of a trustee before, but she figured you guys needed the extra hands so she made the call. Can you guess what happened next?

The trustee said they hadn’t received anything about a postponement from Wells Fargo, but that it could be with Wells’ liaison, whatever that means, and that “sometimes you can’t find out if a sale is being postponed until the day before the sale.”

That’s when in her email to me, Jeneane said: “Somebody is playing a game with me!”

A game? I’m not sure about that. I don’t think I’d call it a “game.”

So, here we are at the end of the day on January 27th… it’s a Friday, by the way… so Saturday is the 28th, Sunday is the 29th, Monday the 30th, Tuesday the 1st, Wednesday the 2nd… and voila’… Wednesday the 3rd will be upon us.

And still… no call from Wells Fargo.

I know you guys must be wicked busy over there but can’t you feel what these parents must be feeling as they watch the clock tick-tock into the weekend. They’re looking at a weekend in HELL because it’s going to be spent knowing that when it ends there will be only two days to do anything about losing your home. And you’re dealing with an organization that can take two days just to receive a fax.

Memo to Wells Fargo CEO, John Stumpf…

You and I have been around this sort of issue before, and not very long ago. And the last time, you were very gracious and attentive to the problem at hand, so I’m going to make the assumption… and I want very much to believe… that this is just another unfortunate slipped through the cracks sort of thing.

So, I’m going to assume that you’ll read this and feel the absolute unfairness of what Jeneane and her husband Tom are being forced to endure at the hands of Wells Fargo’s personnel and systems.

Because I just can’t believe that anyone would intentionally do this to the parents of an autistic 12 year-old girl… invite them to apply for a loan modification, and then after six months, leave them over a weekend with the uncertainty of losing the only home they’ve known for 15 years… in a matter of days… the home in which they have raised four children… all because the husband was injured while while working for the school district… and the wife lost her second job… it’s simply unthinkable.

Who will call first… underwriting to say they’ve been saved… or the investor that just bought their home? It’s positively surreal, Mr. Stumpf. It is very definitely a form of torture. How can a consumer brand like Wells Fargo not feel less secure about its future every time something like this happens? Short memories? I think not.

And here’s the thing… I’ve looked at this couple’s numbers. Their mortgage is around $320,000, and their income is right where it should be to qualify for a loan modification relative to that amount. And not only that, but their home is 50% UNDERWATER, so not only do I believe they qualify, but I would bet you dinner at the Cliff House that they pass any NPV test you’ve got going at Wells.

Wells Fargo Beats Expectations…

By the way, I couldn’t help but notice that your earnings showed the bank’s income was, “boosted by a release of $600 million from reserves.” I’ll tell you what… that is some mighty flowery language considering what you really seem to be saying is that income was “padded by the recapture of a prior expense.”

So, I’m curious how was it done? Was it booked as a negative expense provision, or just some kind of a reverse of an expense taken in a prior period? Six of one half dozen of another, I suppose, but it’s still kind of cutting off the end of the blanket and sewing it onto the other end to make the blanket longer, right? I don’t suppose we should we be expecting you to shift that amount back over during the next quarter or two, should we?

The only reason I ask is that Bloomberg said the following…

Slowing economic growth, low interest rates and volatile capital markets have sapped revenue at the largest U.S. banks, leading them to seek other sources and cut expenses. Stumpf, 58, reduced his staff by 3 percent to 264,200 and reaffirmed plans to trim $1.5 billion in quarterly costs by the end of this year.

I realize that I’m kind of the ultimate cynic about these things, especially when they happen in the fourth quarter… you know… bonus season. So, what was it that led you to conclude that you wouldn’t need the $600 million in reserves for future losses in light of the fact that you reduced staff by three percent and pledged $6 billion in cuts by the end of 2012? That sounds like you’re expecting the economy to contract this coming year, and that would seem to mean the potential for losses.

Never mind, it’s none of my business anyway. Besides, net income up 20 percent to $4.11 billion… you beat earnings estimates by a penny a share, and best of all you made Jamie Dimon over at JPM Chase look like a piker.

Okay, back to the issue at hand…

So, Jeneane’s new Wells’ specialist is Albert at Ext. 60613. I won’t print his last name here. He’s the one who was just too busy to make a call before taking off for the weekend. So, is it that he just has to many people in the same position as Jeneane and Tom, so there’s not enough time to call all of them, and so what the heck… time to go? Or if this couple’s situation is at least somewhat unique, and I sure do hope it is… then what kind of person is too busy to make a call in such a situation? I’d have taken the number home with me… called over weekend.

But, I don’t blame Albert at Ext. 60613… well, or maybe I do… I don’t even know… honestly, the whole thing has me dumbfounded… flummoxed… you might even say that I’m completely STUMPFED? I just do not know what else to DO…

Lucky for me, I know some people who DO know what to DO…

RIGHT DOERS?

Tom Stover & Jeneane Traynor-Stover

8216 Seeno Ave.

Granite Bay, CA 95746

Loan Number #0150299733

~~~

And look what I found… a whole list of email addresses for Wells Fargo execs, but let’s start with letting Mr. John Stumpf know how littler we think of this situation his bank has created. Let’s let him know we’re here and we’re paying attention… and that there are quite a few of us.

Chairman of the Board, President, CEO: John.G.Stumpf@wellsfargo.com

~~~~

John Stumpf (415) 396-7018
john.g.stumpf@wellsfargo.com
CEO: John G. Stumpf
420 Montgomery St.
San Francisco, CA 94163
1-866-878-5865

~~~

Howard.I.Atkins@wellsfargo.com

James.M.Strother@wellsfargo.com

Richard.D.Levy@wellsfargo.com

David.A.Hoyt@wellsfargo.com

David.M.Carroll@wellsfargo.com

patricia.r.callahan@wellsfargo.com

kevin.a.rhein@wellsfargo.com

Carrie.L.Tolstedt@wellsfargo.com

AVID.MODJTABAI@wellsfargo.com

BoardCommunications@wellsfargo.com
sharon.cecil@wellsfargo.com
Todd.M.Boothroyd@wellsfargo.com

john.g.stumpf@wellsfargo.com
cara.heiden@wellsfargo.com
denise.erickson@wellsfargo.com
cara.k.heiden@wellsfargo.com
mary.coffin@wellsfargo.com

BoardCommunications@wellsfargo.com

ombudsman@fdic.gov

Mandelman out.

Bank of America Does the Wright Thing – DOERS Did It Again. JOIN US, BE A DOER!

Mandelman — Thu, 26 Jan 2012 11:23:30 +0000

On Monday at 5:00 PM, as I was running to catch a flight to Phoenix to work with a state senator on a piece of legislation I’ll be announcing soon, I posted a DOER ALERT titled: “Dear Bank of America,” about an octogenarian by the name of Dale Wright. He had been trying to get his loan modified for a couple of years… been turned down… reapplied, and was told he was under consideration as recently as December 23, 2011… and then Bank of America sold his home on January 3, 2012. Mr. Wright found out when an investor showed up at his door saying that he would understand it he needed more than THREE DAYS to get out.

By mid-day on Tuesday, Bank of America had responded to say they were looking into it… and by 4:30 PM that same day Bank of America DID THE WRIGHT THING, and gave Mr. Dale Wright his home back… from a bonafide third party purchaser. BofA has also notified me to assure me that the bank is also modifying the loan, and I’ll be talking with them tomorrow to get details, among other things.

The point is that there should be no question that my DOERS are very effective, and likewise there shouldn’t be any question as to why that’s the case. In our democracy, there’s only one thing more important than money and that’s getting reelected. If our elected officials understand that they are at risk of being voted out of office… they react. Their loyalties to banking lobbyists dissipate quickly when they realize that no amount of money will overcome the will of the people. We used to understand this to be the case.

We’ve got over a thousand DOERS… and we’ve saved 6 out of 6 homes, all of which were about to be sold within days or already sold as was the case with Mr. Dale Wright. (6 out of 6 is NOT a coincidence, by the way.) But, if you really want to stop the foreclosure crisis…

We’ll need at least 100x that number…

To become a DOER you only need to DO 3-4 things and they’re all easy:

Click here to SUBSCRIBE to Mandelman Matters. That’s the only way you’ll get an email whenever there’s a new post and when you see “DOER ALERT” in the headline, you know it’s time to DO something that will matter.
Send an email to me at mandelman@mac.com. Just type: I’m a DOER or something close in the subject line. I’ll add you to the database of DOER emails. When we want the element of surprise I won’t post it, I’ll email you the plan.
Actually check your email from Mandelman Matters or from mandelman@mac.com and when you see the words DOER ALERT, open it and read it right away or certainly ASAP. Not the next day… that day. Then, assuming you want to help make a difference, read it and send an email to the CEO’s email while I always list at the bottom of the DOER Alert. Of course, the more thoughtful the email the better, but it doesn’t have to be a long email if you’re pressed for time. Just a few sentences is just fine and dandy.
Help recruit other DOERS. Send others links to articles on Mandelman Matters and tell them you’re DOING it and it’s working.

Consider this… right now there’s all this controversy over the 50 state AG settlement. A few days ago many people thought the deal was about to be announced and people were very upset. Well, if we had 100,000 DOERS now, we could stop that deal from getting done for sure.

I have to be honest about something…

There are two things that really bother me. One is that we only have a thousand DOERS. That means that thousands of people are reading and not signing up as DOERS. How can that be? Hopefully it’s because Im haven’t promoted it well, which is something that’s going to change. But, if its not that… if you’re reading my column and not signing up and subscribing so you can join forces with the rest of us… why the heck not?

How can you not want to help save someone’s home or influence the state legislature, or make congress in Washington D.C. take notice and hear our voice? I really don’t understand… so please… if you’re not going to DO it, please at least let me know. Maybe you have a good reason that I’m not thinking of, in which case fair enough. But if you don’t, why wouldn’t you DO this? How can you not DO this?

And two… if you’re a DOER and you didn’t send an email this last time around… and please don’t tell me you didn’t have time to send a 3 line email because if I had time to write it, you could send an email about it. I missed my flight to write about Mr. Wright by the way. Had to drive all the way back home, then worked until 2:00 AM and then back to the airport the following morning. And you didn’t have 5 minutes? Come on…

Not only that, but how could you let down your fellow DOERS… to say nothing of Mr. Wright? What if BofA hadn’t done what they did, and Mr. Wright had lost his home? And you didn’t send an email as you promised by being a DOER. I’m serious about this… I couldn’t DO that and sleep at night. Your email can be the one that matters. But you were too busy… so now at 82 years old, a veteran loses his home… and you let down your fellow DOERS? Not cool, people. Really, not cool.

Time Matters… A Lot.

Sample emails from a few DOERS to Bank of America this last time around…

Some of the emails received by the bank show just how deeply offended Americans are by what’s being allowed to go on… I’ve excerpted a few paragraphs as examples… they are all addressed to Mr. Brian Moynihan, CEO, Bank of America…

“It seems more and more these days your Bank and the rest of the Banks that are involved in Mortgage backed secured investments are reaching criminal status

What has just happened to Mr Wright in Cloverdale, CA should at least bring a long jail sentence to your door. I am sending out as many e-mails as I have contacts and then I am going on every blog site I can find and pass this article to them as well. Then I am writing my congressman and then the Attorney General !!!!!”

###

“As if we needed any more proof that servicers have no clue who owns the loans or how to properly service them, now we have the nincompoops who worked on Mr. Wright’s foreclosure to illustrate the depths of BOA’s incompetence. This one will stick in everyone’s mind because an old man is being thrown out of his house after BOA repeatedly “lost” the papers or “misidentified” the investor in a series of memorably unfortunate events.

I work a lot of real estate buyers and if this mistake isn’t rectified immediately then I’m telling all of them about elderly Mr. Wright and cautioning them to stay away from BOA mortgages from Wednesday until I retire in 20 years. Hope we’re able to do business again in the next two decades Brian, but remember there’s lots of other lenders out there and I can’t recommend BOA with this kind of crap going down.”

###

“I have read the story about Bank of America’s foreclosure sale on January 3, 2012 of the home of Mr. Dale Wright of Cloverdale, California. He is an 82 year old Veteran and a widower. Your bank refused to convert his HAMP trial payment plan because of a false claim that he had failed to send you in IRS Form 4506-T. This was a false claim. Even if it wasn’t, for the lack of such a minor document, no institution with any moral sense would have allowed that to be a basis to proceed to take away this man’s home. The action of Bank of America feeds the public view of your institution as one which has no corporate responsibility or conscience.

I was recently told by Bank of America’s Maine Market President how Bank of America has improved its practices. How can anyone believe that when a story such as Mr. Wright’s is exposed.

Bank of America’s abuse of America’s homeowners has simply got to stop. Would you please act like a responsible executive of one of America’s largest financial institutions and intervene in this case by telling your people to do what ever it takes to get the title to Mr. Wrights back into his hands, to give him the HAMP permanent modification to which he is entitled, and to compensate him for the enormous emotional distress that your bank has caused him to suffer.

It would be unconscionable for you to fail to do this at once.”

###

“I’m not sure how much more egregious you can possibly get than to sell a home out from under an 82 year old veteran after 1) approving him for a modification and 2) admitting that after you screwed up the first time since he was making his payments and then 3) while he was “under consideration” a second time as recently as December 23, 2011 you sold his home?

And then you BLAMED WELLS FARGO?

It would behoove you to immediately rectify this situation with Mr. Wright. Make it right! I don’t really care how you do it, but to turn his home over to a “home flipper” when he not only qualified for a modification but was approved for one and made his payments on time is beyond disgusting.

I’m only e-mailing this because your offices are closed at the moment. Wait until I call, then I’ll give all of your staff an earful. This really has me steamed. And they should be ashamed that you are their boss.

I’m positive that I will not be the only one that will be contacting you on this one. This is only the first wave of a coming tsunami.

Fix it, Moynihan. We are all tired of you and your cronies shenanigans and the dam of outrage is about to break all over this country. There will be way too many holes in it for you to plug up, and it will all come crashing down like the worthless paper you claim to hold on all these mortgages.”

###

“Regarding the above-referenced loan, please use your infinite powers to assist this elderly gentleman in the later years of his life to work through this difficult situation. It is so atrocious the way in which distressed property owners in all age groups, of all ethnicities and from all socioeconomic strata are being treated by institutions that simply do not appear to care about the impact their industry has had on the citizens of this country. But his particular story goes beyond the customary and usual. This gentle man has served to defend those of us that are unable or unwilling to put our lives on the line for our country!

When will you do something about the way in which Bank of America’s servicing departments botch up paperwork, lie to people in life-changing circumstances, and then blame it on others? As a major institution within the financial realm, one would think that BofA would be on the cutting edge in the technology arena to keep paperwork intact; in hiring capable and ethical employees to problem-solve rather than lie, cheat, or delay, and in providing resources with whom customers can discuss their problems to get back on tract?

More importantly, however, is when will Bank of America become the financial institution that deserves the trust of the people that keep you in business?

It is time to stop the spiraling loss of wealth to the vast majority of homeowners that rely on the equity in their homes to enjoy a peaceful and well-deserved retirement. It is time to have compassion for those individual homeowners whose jobs have been cut out and now must move their entire families elsewhere in a real estate market that causes them to go into default. It is time to develop a plan to actually work on customer service that truly assists (rather than bullies) homeowners in lieu of the almighty dollar.

Mr. Wright’s story is, without a doubt, a very sad story that requires immediate measures. Mr. Moynihan, let his story be the catalyst for extreme changes within your institution. It is, after all, within your power to make these changes. The bucks stops with YOU.”

###

Having read the story of Mr. Wright and his appalling treatment by Bank of America, I trust you will reverse the sale of this house and return it to its rightful owner.

I hope you are familiar with the details of this horrific treatment by your bank. If not, then you can read about it here:

http://mandelman.ml-implode.com/2012/01/doer-alert-dear-bank-of-america/

###

OFFICIAL DOER STATEMENT OF PURPOSE

BY MARTIN ANDELMAN & ABIGAIL FIELD

But by ourselves we can’t do enough. We need YOU to DO too.

Here’s what we DOERS DO:

1. We take action.

2. We know there’s no “try” in DO.

Either you DO, or you don’t.

3. We build big victories out of little victories.

4. We focus on our similarities, not our differences.

5. We believe in “We, the People.”

6. We recruit more DOERS, because size matters.

To solve the big problems we need to be correspondingly big. We’re not playing games. We are DOING to win.

7. And we are in it to win it.

We are relentless. We take our tasks seriously. We do our best. We never let down our fellow DOERS by not DOING our individual parts.

Please don’t delay… DO it today… it’s easy to DO… and to win, we need you.

Becoming a DOER and committing to our code of action is easy. Just send an email to either one of us:

Martin Andelman at: mandelman@mac.com

Abigail Field at: ACFRealityCheck@yahoo.com

And also don’t forget to subscribe here: SUBSCRIBE

All you have to write in the message is: Count on me to be a DOER. Or, just say: I’m in. Tell me what to DO.

And we’ll be in touch. Something like once a week we’ll call on you to DO something important… something that matters a lot. It feels really good to be a DOER, ask anyone who is.

Mandelman & Field… OUT!

Look, this just isn’t that hard… The Solutions to Pressing Problems.

Mandelman — Tue, 24 Jan 2012 17:28:25 +0000

Someone recently wrote to me saying that instead of continually telling everyone what’s wrong, I should tell them how to solve the problems we’re facing and I thought to myself… okay, fair enough. This just isn’t that hard. We’re not solving things because we don’t want to, not because no one can think of how to solve anything.

So, you ready… I’m going to show you solutions in ONE MINUTE and one solution at a time.. so please try to keep up okay?

1. Problem: Forging documents and filing fraudulent documents in public records… or “Robo-signing,” if you’d prefer.

1. Either pass a law that says these documents don’t need to be signed at all… or stop the filing of forged and fraudulent documents in public records… and Nevada has shown us how to do that… it’s easy and doesn’t cost a nickel. And foreclosure filings in Nevada dropped by more than 80% as a result of what they did in that state, which was simply to make the penalties criminal and the fines higher for filing a fraudulent document in the public record. Because, I don’t care if they need to be signed or they don’t need to be signed… but they don’t need to be forged under any circumstances.

2. In simpler terms: If Mickey Mouse is going to sign it, and Donald Duck is going to notarize it… THEN DON’T SIGN IT… because we don’t need it signed. BUT… if we DO need it signed, then don’t forge it and file a fraudulent document into the public record. If you do that, it’ll cost you thousands and you could end up in jail.

3. We already have millions of forged and fraudulent docs in our public records thank you very much, and 30 years from now some lawyer will have occasion to pull title docs for whatever reason, he’ll find a forged or otherwise fraudulent document(s) and we’ll be litigating the whole damn thing all over again. We certainly don’t need that situation exacerbated. The documents may need to be signed… but they don’t NEED to be forged.

4. We also don’t need to wait until the situation shakes out or the scope of the problem is known… or whatever. There’s no reason to wait for any of that because it doesn’t matter how we answer any of the unanswered questions… the solution to however you want to define the problem is NOT under any circumstances going to be: “Oh, just forge the signature and file a fraudulent document in the public record.” NO… that’s not allowed to be the answer no matter how you want to define the problem.

5. I’ve never lost the pink slip to my car… but I’m sure there’s a process to follow if that ever happens. I call the DMV and fill out some forms and then I… blah, blah, blah… it’s never happened to me so I don’t know what the process is. But I know what it isn’t. It isn’t: “Fake one on your Mac, sign Donald Duck’s name, and use it for whatever…” That is definitely not how it’s done.

6. There shouldn’t be ANY push back to what I’m suggesting here… NONE. To those who say that the banks will oppose what I’m saying because I’m trying to stop foreclosures I reply: No, I’m not. I haven’t said a word about stopping foreclosures, I’m talking about stopping the forging of documents and the filing of fraudulent documents into the public record. I have all the confidence in the world that BofA, Chase and our state/federal governments are more than capable of coming up with some other process… either that or pass a law that says all you need to do is place a red X on the dotted line… or leave the damn things blank… I don’t care. But, forgery and fraud are not going to be our chosen methodology for anything ever.

7. The reason for my efforts, as I’ve explained to several state AGs and state legislators, is that what is going on now, with forged and fraudulent docs being used every day all over the country to foreclose on homes, is already changing the nature of the foreclosure crisis. What was a terribly unfair, incompetent, cronyism, banker friendly, messed up situation is being transformed into organized crime. Homeowners look at their title documents, and very easily see that the assignments and other affidavits have been robo-signed. They have tangible proof of a crime having been committed. They show the judge, he doesn’t care… and they lose their house.

8. That is the definition of organized crime… 5 huge crime families we call banks… committing crimes in the public view… and state law enforcement and the court system refusing to enforce the law because of connections with the banks. That’s organized crime, period. And human nature dictates that when people see that their government is failing to uphold the rule of law or enforce the laws against certain individuals or groups… well, they take the law into their own hands. That’s always been true… it is in fact a fundamental human instinct.

9. If your son or daughter is harmed or your store or home is robbed… and the law refuses to do anything about it because of who you are relative to who the perpetrators are… want to know what happens? Ask the KKK. Someone takes the law into their own hands and someone gets shot in the head, or ends up hanging from a tall oak. Every single time… and any of us are capable of doing just that… taking the law into our own hands.

10. Allowing forgery and fraud to go on unchecked is a BAD idea, and everyone should understand and agree with that. And aren’t we lucky that we know exactly how to stop it… the State of Nevada has shown us the way. So, change the law, increase the penalties and problem solved. Now isn’t that a relief?

And… DING!

The foreclosure crisis has already been allowed to grow out of control and destroy the American middle class. Standing by idly while we watch it get even worse, when it’s easy and free to prevent that from happening, is beyond unconscionable. And if we do it, then we deserve whatever we get as a result.

See, that wasn’t that hard, was it? ONE MINUTE SOLUTIONS by Mandelman Matters. Why didn’t I think of that? Next solution tomorrow, so stay tuned.

Mandelman out.

DOER ALERT: Dear Bank of America…

Mandelman — Tue, 24 Jan 2012 01:03:27 +0000

Dear Bank of America, and by Bank of America I mean CEO Brian Moynihan…

Brian, I’m running out the door at the moment. I have to make a flight to Arizona so I can attend a meeting in the morning at the state capitol. A state senator called me last week asking for my help promoting a bill related to the foreclosure situation there. Were it not for my schedule, I’d be ripping you and your bank to pieces in this column, and then asking all of my DOERS to inundate you with emails and letters in support of yet another homeowner who’s life you have irrevocably, unconscionably and inconceivably harmed.

I’ll be back at my desk tomorrow, and I was just going to wait until then to deal with you, but you see… this story brought tears to my eyes asa I sat here checking in for my flight… I guess I’m just emotional (although I think “human” is the more appropriate word) about such things, while you perhaps are not. Anyway, I decided that even though I didn’t have time to write the story in detail… I’d let you know what’s coming soon to a theater near you.

My thinking is, if you want to avoid me having to spend the eight or so hours it takes me to write all of the details into a piece that will be read and remembered by tens of thousands of people all over the country, you’ll address this situation before I get home tomorrow afternoon. I hope you don’t view this as some sort of threat… I don’t mean it that way… I hate people that threaten, you know what I mean? Either do it or shut up, has always been my motto.

I’m just giving you a heads up, if you will, of what tomorrow afternoon is absolutely certain to bring if you don’t do something about… hey, do you remember the Perry Mason television show from days gone by…

The Case of the Grieving Grandpa and the Lying Lender

Starring…

Mr. Dale Wright of Cloverdale, California

Loan Number 149664284

Brian, this one’s going to make a great story too, so if you can’t make time to handle it before I’m home tomorrow afternoon, you’re going to wish you had. Here are a few highlights… think of it as the show’s preview or a movie trailer…

Mr. Dale Wright of Cloverdale, California turned to Bank of America for help in 2009 after being told by the President of the United States that Bank of America would help him, if at all possible. Mr. Wright is an 82 year-old veteran who’s been a pillar of his community since before you were born, Brian.

He was approved for his trial modification under the Making Home Affordable program on March 23, 2010. I’m told by several people involved in his case that he made all of his payments on time and as agreed and I have reason to believe they are correct. He was denied for a permanent loan modification because of Bank of America claimed not to have received a new 4506T… even though you had received said 4506T, 30 days earlier and I’m told those things are good for 90 or 120 days.

No matter… he was told he was being reconsidered as of December 6, 2011. In fact, he was told he was under consideration as of December 23rd. You SOLD his house on January 3rd, Brian. He’s 82 years old, Brian. December 25th is Christmas, Brian. January 3rd is two days after New Years, Brian. God damnit… Bank of America doesn’t need to do sh#t that week, Brian. (I’m sorry, for my language, but I can’t take much more of this without swearing, Brian.)

Of course, your bank didn’t tell him it was sold on January 3rd. He found out when the investor knocked on his door on January 3rd and told him that it would be understood if he needed more than three days to move out! The investor told Dale he was buying the property to “flip it.”

(SIDEBAR: You might want to mention to whoever that was that said that to him, that he’s damn lucky that it wasn’t me that answered the door that day because I don’t have any prior criminal record and I’d be willing to pick up a first offense charge for beating the crap out of someone for doing that to my grandfather. But, I don’t suppose he would have said it to me, now would he? No, he only says things like that to 82 year olds, I’m fairly sure.)

So, Mr. Wright called and Bank of America was like…

“Wo, wo, wo… we don’t know how this happened… we were trying to postpone the sale, but Wells Fargo wouldn’t do it and they’re the investor that owns the loan. It wasn’t our fault… blah, blah, blah.”

Your bank sold the home of an 82 year-old veteran right after New Years so some investor could flip it, and couldn’t even be bothered to make a call to let him know? No… instead you blamed it on Wells Fargo, saying they were the investor and they wouldn’t agree to delay the sale or modify the loan. Hmmm… think that’s true, Brian? I wonder…

But luckily, I didn’t have to wonder for very long… here’s the email from Wells Fargo from just a few days ago:

From: catherine.h.martin@wellsfargo.com

To: kristiesheets@hotmail.com

Date: Tue, 17 Jan 2012 14:01:19 -0600

Subject: Dale Wright

Dear Ms. Sheets,

Wells Fargo Bank, N.A. received and reviewed your recent correspondence regarding your concerns as it relates to your Grandfather’s mortgage.

After researching this matter, we have verified that Wells Fargo Bank is not the Investor/Owner and does not have a direct role in servicing the loan. That being said, I am forwarding your letter to the servicer, Bank of America, instructing that they subsequently respond in a timely manner to your concerns giving Mr. Wright every consideration allowed.

I urge that you continue addressing Bank of America with concerns pertaining to this matter. You may contact Ms. Nora Jones at 817-864-2293 at Bank of America to request that she escalate this matter within Bank of America.

Wells Fargo Bank makes every effort to facilitate and inform servicers of such issues so they may properly respond.

Respectfully,

Cathy Martin

Client Service Consultant

Wells Fargo Bank

9062 Old Annapolis Road

Columbia, MD 21045

410-884-2161 FAX 866-493-7814

Ooopsie! I guess your system was wrong… or your bank’s wires got crossed. Or maybe they were just feeding Mr. Wright “Lie Number 32,863,” from the Bank of America Handbook?

The man’s wife passed away in 2006. They were married for 53 years. Your bank explained that a request for postponement went in on the 23rd of December 2011 on a loan which Bank of America agreed to review for HAMP on December 1, 2011 and then you sold the home on January 3, 2012… Brian, are you trying to punish this man?

Fix this, Brian. Fix it so that it doesn’t happen to even one more elderly person. Because if you’ve heard of karma, your later years are likely going to be a real bear if you don’t.

COME ON DOERS… DO SOMETHING ABOUT THIS…

I CAN’T SAY ANYTHING ELSE WITHOUT BREAKING MY KEYBOARD AND MISSING MY FLIGHT, AND BESIDES I CAN’T SEE AGAIN, THIS IS JUST TOO UPSETTING… I FEEL LIKE IT’S GROUNDHOG DAY…

BRIAN… Kristie Sheets is his granddaughter… HER NUMBER IS: 707-632-6101. You can call her and ask how to make this right, if you have a mind to do so. I’ll be home tomorrow afternoon, and I’ll check with her before I do anything else. This, as I mentioned, was just a preview of coming attractions. (Insert Perry Mason Music here.)

Mandelman out.

DOERS YOU KNOW WHAT TO DO!

Brian Moynihan, President, CEO & Chairman

Bank of America

Email: brian.t.moynihan@bankofamerica.com

Matthew Task, Executive Relations,  Office of the CEO (At BofA)

Phone: 813-805-4873

Credit Suisse Tells Bloomberg: “Mortgage Principal Cuts Don’t Help Homeowners?”

Mandelman — Sun, 22 Jan 2012 23:53:14 +0000

Believe it or not, I’m not an easy person to shock or offend. No one that knows me would ever say that I possess delicate sensibilities, or anything close. For example, the only thing I found at all shocking upon learning that Newt Gingrich had asked his now ex-wife if they could have an “open marriage,” was that there were more than two women (or even one gay man), that would even consider having sex with Newt.

But, when I read Bloomberg’s headline yesterday, “Mortgage Principal Cuts Don’t Help Homeowners, Says Credit Suisse,” I have to admit that I found myself recoiling in total shock that, in view of what’s happening today in the housing market, anyone would put forth such an utterly preposterous argument.

Here’s the beginning of the Bloomberg piece, you can read the rest later.

Reducing mortgage balances is a risky idea that hasn’t been shown to keep borrowers who owe more than their property’s worth in their homes, according to Credit Suisse Group AG. (CSGN).

Of the 11 million of “underwater” homeowners, about 6.5 million have never missed a payment and 2 million more are making on-time payments after a delinquency, said Dale Westhoff, the bank’s global head of structured products research. Widespread principal reductions may drive defaults “much, much higher” as borrowers seek the aid, he said.

“We’ve never done this before; we don’t know what the risk is,” Westhoff, a top-ranked mortgage-bond analyst in polls by Institutional Investor magazine for 15 years in a row while at Bear Stearns Cos., said today at a briefing for reporters in New York. Along with creating so-called moral hazard, the step may also tighten lending by forcing banks to offer “price protection” to borrowers, he said.

Credit Suisse’s view puts it at odds with Federal Reserve Bank of New York President William C. Dudley; Amherst Securities Group LP analyst Laurie Goodman, a member of the Fixed Income Analysts Society’s Hall of Fame; and hedge-fund manager Greg Lippmann, who last year advocated principal reductions, citing data from his former employer, Deutsche Bank AG.

Pretty offensive stuff, don’t you think… as you sit there reading this in your home that’s underwater by six figures and going down further every day? Feel a little like wringing the guy’s neck that said it? Yeah, well… me too.

Instead, I’ve written a corresponding article that I’d like to see Bloomberg run in the interest of being… what should I say… fair and balanced? If you want the full impact, however, go back and read the Bloomberg version above one more time, then continue…

Not Recognizing Losses and Unlimited 0% Interest Loans Don’t Help Banks, Says Credit Slush

Suspending accounting rules is a risky idea that hasn’t been shown to keep banks that borrowed more than their assets are worth from becoming insolvent, according to Credit Slush Fund PIG.

Of the 11 most bailed out banks, about 6 have never been able to make their payments, and 2 more are making on time payments after being allowed to become bank holding companies in name only so they could borrow unlimited amounts from the Fed’s discount window at zero percent interest, said Bail Worstoff, the consumer’s global head-case for unstructured thinking.

Widespread zero interest borrowing and the ongoing suspension of accounting rules that allow banks to push off the recognition of losses far into the future may drive insolvency rates “much, much higher” as banks become entirely dependent on the unrealistic and inappropriate aid.

“We’ve never done this before; we don’t know what the risk is,” Worsthoff, a top-ranked banking behavior analyst in polls by Concerned Citizens with Common Sense for 15 years in a row, said today at a briefing for reporters in New York. Along with creating so-called “moral hazard,” these steps are also likely to perpetuate the irresponsible risk taking and amounts of leverage taken on by banks, which is what caused the global financial crisis in the first place, and would force congress to once again be unable to offer “any protection” to taxpayers who will be on the hook when the bankers invariably become insolvent once again, he said.

Credit Slush Fund’s view puts it at odds with Federal Unreserved Chair Ben Bailsnakee, Treasury Secretary Skim Getmore, Scary Summers, a member of the Fixed Outcome & Opacity Legion (“FOOL”); and sludge-fund manager Greed Hittmann, who last year advocated unlimited and unreported zero interest borrowing, undisclosed backdoor bailouts, and the elimination of all bank accounting and reporting requirements, citing data from his former employer, Deushbag Bank PIG.

First of all, the idea that reducing the dollar amount someone owes on his or her mortgage isn’t helpful to the homeowner… well, it’s simply a goofy thing to say. I mean, it has to be a question of degree, right? Like, reducing someone’s $100,000 balance by $1 wouldn’t be terribly helpful, I understand. It’s the Sorites Paradox, I suppose… which back in my debate-the-useless days as an undergrad we used to refer to as the “Paradox of the Heap.”

(Assuming you have no idea what I’m talking about, but would like to… the Paradox of the Heap deals with a heap of sand from which one grain of sand at a time is removed. The first premise is that one million grains of sand is a heap of sand. And the second premise is that a heap of sand minus one grain of sand is STILL a heap of sand. With me so far? Good.

So, the question is… when a single grain of sand is all that’s remains, is it STILL a “heap of sand?” If you answer yes, then you sound ridiculous because a heap is defined as a group of things placed or thrown on top of each other.” And if you answer no to that question, then the follow-up question is when did it stop being a heap… when it was two grains of sand… three… four… 100?

I can’t remember exactly, it’s been too many years… but I think after that you either run screaming from the room, beat the crap out of your roommate for dragging you into this inane conversation, or take a hit off the bong.)

Am I getting my point across here? Or am I being too subtle?

Because I often worry that my use of humor or sarcasm either goes over too many heads or is solely as thought of as being entertainment… instead of as the less-than-veiled threat to societal tranquility that was my actual intention. (That was supposed to be funny, people… stay with me, okay?)

After reading the Bloomberg article, it occurred to me that this was not the first time I was being shocked at the hubris of Credit Suisse’s conclusions allegedly derived from some review of distressed homeowner data. The last time it happened was more than two years ago, November 2009, when I wrote about it in an article titled: “Why Banks Are Better at Making Loans Than Modifying Them.”

Back then Credit Suisse in conjunction with UBS, published a statistic saying that loan modifications were re-defaulting in 60 percent of cases after just 10 months… the clear implication being that loan modifications didn’t work, so better for all involved to simply foreclose. It took some digging as I recall, but in the end it came out that in 2008… 60 percent of the loans modified ended up with higher monthly payments than before they were modified… which would explain the 60 percent re-default rate quite handedly.

It’s been a while, but I remember having an exasperating conversation with a banker during which I was trying to make the point that when the payment amount increases, it should not be called or classified as a “loan modification.” The banker I was talking to… bless his heart… was trying to patiently explain to me why in point of fact, it was a “modification” of the loan and therefore had to be classified and reported as a “loan modification.” (Amazing I’m still alive, don’t you think? Or that the banker is… I’m not sure which.)

I replied that it didn’t matter. What mattered is that if I were to line up 10 million homeowners in this country, and ask them whether a loan modification makes your monthly mortgage payments go up or down, for the most part they’d all say down. Therefore, the term “loan modification” should only be used when the modification results in a reduced payment amount.

“So, what should we call it if the loan gets modified but the payments go up,” he inquired. His tone made it sound as if he was sure that he’d have me in one or two more moves on an imaginary chessboard.

“Well, I’m not sure,” I replied. “I’m not a banker or anything, and I wouldn’t want to presume to know your job better than you do by any means, but you could give some thought to calling it… oh, I don’t know… A PAYMENT INCREASE?”

Unfortunately, our conversation had to wrap up quickly after that… apparently something unexpected had come up and he had to run.

Do Principal Reductions Help, or Are they the Poster Child for Moral Hazard?

Credit Suisse should be exposed and discredited for being banking industry propagandists more than willing to risk further destruction of America’s middle class economy and our reduced standard of living before they lift a finger to make things better economically speaking. That much is certain… and all too obvious.

But, the question is: Would principal reductions help homeowners avoid foreclosure? And I want to address the substance of Mr. Dale Westhoff’s/Credit Suisse’s arguments against, lest anyone think that I’m being purely snarky about this whole thing, and therefore am in any sense being non-responsive to the issue at hand.

It’s not a simple subject, by the way. So, don’t expect me to offer an oversimplified and hence meaningless response.

Mr. Westhoff, the bank’s “global head of structured product research,” the term “research” being used extremely lightly… hinges his argument against principal reductions for homeowners as a means for preventing foreclosure on the same old argument: it will create a moral hazard.

Now, let’s take a look at what this “moral hazard” thing is all about.

Traditionally, moral hazard exists when a party can make decisions about how much risk to take on, while another party bears the costs of that risk going badly. And if that’s how we were defining it here, the only moral hazard that we’ve got to be concerned about is the moral hazard resulting from banks taking on too much risk knowing that they are “too big to fail.”

That’s the type of moral hazard that’s gotten us into this mess in the first place, and since the bailouts of banks in 2008, it’s the most significant risk we bear as a nation because if banks think they’ll be bailed out no matter what because they are too big to fail… we can all count on them needing to be bailed out again… and again… and again. So, that’s that.

Westhoff, however, is using the term moral hazard in a different sense. He’s asserting that if homeowners know that there are principal reductions available to those in default, more and more homeowners will intentionally go into default in order to get their principals reduced.

Moral Hazard and Principal Reductions

It’s shocking how little the financial services industry understands about the people it serves. One particularly telling example of this was seen in May of 2011, when one of the three major credit bureaus, TransUnion, published the results of a study that shocked the banking industry by concluding that many who have lost homes to foreclosure did so because of the downturn in the economy and not as a result of an inability to handle debt, as was previously thought.

“Lenders always try to distinguish a one-off, life-crisis event like divorce or a medical catastrophe versus people who are just ineffective at managing credit,” said Ezra Becker, TransUnion vice president of research and consulting, and one of the study’s authors.

“Our argument is that this economy disproportionately affected certain people in a way akin to a one-time crisis. Those consumers have not in fact forever changed their personal philosophy on repaying debt. It was a one-time event because of the specific and personal circumstances of the recession, and they otherwise would be good credit risks.”

What’s most amazing about the TransUnion study is that they needed to conduct a study to establish that people losing homes to foreclosure in the last few years were not irresponsible deadbeats, as the financial services industry had been assuming, but rather… well, it was the economy, stupid. That anyone in financial services needed a study to tell them that foreclosures were being caused by the credit crisis that their industry brethren created is either some distorted form of irony or disingenuous nonsense.

The banking industry’s abysmal knowledge of consumers is also readily apparent when looking at the issue of moral hazard as related to principal reductions, or the incidence of strategic default, which is when someone chooses to walk away from a mortgage even though they can afford to make their payments. These are the two subjects from which one might write a book of scary bedtime stories for bankers.

To understand this topic, first you have to understand how regular people view their homes.

The years 2003-2007 notwithstanding, homes are not seen by regular people as investments in the traditional sense, they are more like forced irrational savings accounts we inhabit. We don’t care what interest rate we’re getting on our “home/account,” but we do know the balance will be significant if we pay it off, and so they are a key component of America’s retirement plan.

Most people save money for a down payment on a house during the early part of their lives when their costs of living are relatively low. After that, if property values are rising, they become relatively more mobile because they use the equity in one home to purchase the next. It’s true that our incomes rise as we get older, but life gets more expensive over the years too.

Because the costs and expenses of buying a home and moving, if property values are falling or flat, we do everything we can to hold on to the homes we have, which is why so many underwater homeowners have applied for loan modifications even though from a strictly financial perspective, it doesn’t appear to make any sense.

It actually does make sense, however, once you understand that most people know that their only hope of buying another home will come from equity they build up in their current one. And even if they don’t build that equity as a result of market price appreciation, that’s okay because the forced savings account functionality will eventually kick in, and they’ll have the equity to move up, or an asset of significant value for unplanned emergencies or retirement years, or the foundation of an estate to leave to our children.

It should be obvious that this line of thinking is foreign to financial investment types who think in terms of comparing returns on different investments. It would be easy to show someone why it would be advantageous to accumulate wealth through a diversified set of investment vehicles while renting a home, but regular people know that they can’t trust themselves to be disciplined about saving and investing, but they can make a mortgage payment each month for 30 years because not paying that payment means disrupting their family’s tranquility… and having nowhere to live.

As a result, to stop making one’s mortgage payments on a primary residence is in general a big deal… a huge risk… you may end up losing your home… you can’t tell a living soul about what you’ve done… and your credit score goes to pot within a couple of months. It’s immensely stressful, and no one does it unless financially speaking it’s absolutely necessary, meaning that some significant life event has occurred… job or income loss, injury or illness, divorce… those are the big ones anyway.

The bottom-line is, if people can afford to make their mortgage payments… they make their mortgage payments, and this is most easily verified by looking at how low foreclosure rates have been historically, again these past few years notwithstanding, even though between 1950 and 2000, home prices nationally were flat if adjusted for inflation.

So, will homeowners in any meaningful number take the risk inherent to going into default on their mortgage in order to get their principal balance reduced? The answer should be obvious… it depends on how far underwater the homeowner is, how does the homeowner view the potential and timeframe for home price appreciation to occur, how certain is it that by defaulting they will be granted the principal reduction, and what are their options if their principal isn’t reduced and they lose their home to foreclosure.

Obviously, someone $200,000 underwater who thinks it will be 20 years before the market price appreciates by that amount, is much more likely than someone less severely underwater who views prices as coming back in five years, to walk away… or to go into default in order to try to get their bank to reduce the principal balance of their mortgage.

The other question about the efficacy of principal reductions in foreclosure prevention, applies to homeowners who are already seriously delinquent and seriously underwater, who are applying for a loan modification. Lowering this homeowner’s interest rate and extending his or her term can make the monthly payment affordable and therefore prevent a foreclosure in the short term, but the question is, by leaving the homeowner so far underwater, are we just creating a strategic default in the future?

A couple of years ago, there were a slew of articles in places like the Wall Street Journal among others, that claimed that there a rash of strategic defaulters, which are defined as people that can afford to pay their mortgage no problem, but choose not to because they owe more than the home is worth. And a couple of years ago, I wrote that strategic defaults are nonsense because no one that can afford their mortgage payments gets up on Sunday and says to their spouse:

“Honey, I realize that we can afford our mortgage payments no problem, but I was just thinking how far underwater we are and thought now might be a good time to clean out our garage, ruin our credit scores, endure the hassles of moving, and go rent a place for a five years.”

That is not what’s been happening to-date. Not that it never has or will happen, but it’s exceedingly rare. Everyone that hasn’t made a mortgage payment in months or even years is in their current situation because of money. They didn’t stop making their mortgage payment because they became upset about being underwater, nor was it because of an ability to handle debt. They stopped, in the vast majority of cases, because the economy or a life event knocked them down financially, and after using whatever savings they had, there came a day when they simply couldn’t make the payment… it wasn’t because they didn’t want to.

Optimism is a hard thing of which to let go…

I think I can remember the exact day that the dot-com bubble popped… it was April 10, 2000… and I was watching it happen on a television screen showing CNN as I waited in line to board a flight home from San Jose where I had spent the day in meetings. I remember saying to my assistant at that time, that’s it… it’s all over now, or something to that effect.

I also remember seeing the cover of Newsweek two months later; I think it was the June issue. It suggested that the tech sector would be coming back by December of that year, the obvious message being, “Don’t sell.” I laughed when I read it… but not as much as I did two years later when I was at my favorite local watering hole after work with a friend of mine. Mid-sip of my martini, he told me he was still holding onto his shares in Cisco Systems, purchased at $84, causing me to spit out my drink, choking as I laughed.

At the time, I think Cisco was trading at around $9, but my innumerate and hopelessly optimistic friend was explaining that he was only hoping the stock would return to half of its $84 price so he could then get out, losing only half of his dough. I tried to explain the math involved showing him why he should sell and take the loss on his tax returns, and he listened… but it was another year before he took the advice and I learned that optimism is a hard thing of which to let go and this crisis has been no exception.

In the early stages of the crisis, essentially everyone listened to the administration, other government sources, and financial industry PR, and as a result believed that we were experiencing a temporary downturn as had happened before… that the housing market would start to come back around in a few years. The idea of a “lost decade” was something that only happened in Japan… and everyone was saying that we were not Japan, which made sense to most folks because we cooked our fish before eating it in most if not all cases.

Recovery, the so-called experts said, would come by the end of 2010… then it was 2011… and then 2012. As the years passed and home prices continued falling, consumer spending followed, and people came to realize that any recovery in the housing market would take longer than it had after past downturns… maybe it would be five years… maybe seven, so maybe by 2014 or 2015?

As long as most people believed that what was happening had happened before they could remain grounded, go on with their lives, and await our return to national prosperity. This was the way people felt through 2009, 2010 and some part of 2011.

Last year, the news started to change and for a large segment of the population hope for recovery within a decade started to seem overly optimistic. A lost decade was now understood to be almost a certainty, and the idea of a 20-year downturn, unthinkable only a couple of years earlier, now seemed a possibility.

Of course, there will come a time when some significant number of people sans money problems walking away from their mortgages en masse, and if we continue on our current path, that time will be here soon enough.

For millions of homeowners today, their situation has deteriorated to the point that it has become close to paralyzing. Government programs have in all cases, not only been spectacular failures, they’ve also been spectacular lies. As a result people have lost both trust and confidence in those they elected as they have plainly misled and ultimately abandoned them.

Additionally, having been televised it’s now widely recognized that too many courts have been ambivalent to the flagrant forgeries and fraudulent documents banks have used in the foreclosure process. And losing faith in the courts and rule of law, is leading millions of homeowners to increasingly view their future as potentially dire.

And you know what they say: Desperate people take desperate measures. (Or is that… “Disparate people choose different pleasures. I can never remember how these sayings go… LOL.)

So, the bottom-line is that today, the issue of moral hazard as it relates to principal reductions is an entirely different matter than it was even a year or two ago. Today, and looking forward, I’m sure there is increasing reason to be concerned about homeowners being inspired to intentionally default in order to have their principal balances reduced, but the banking industry should realize that those that do so… well, if they’re willing to take that sort of risk then they’re on their way to a strategic default anyway… so, it’s really just a matter of choosing your poison.

ENTER: Mr. Dale Westhoff of Credit Suisse…

Dale Westhoff, our insipid bond analyst from Bear Stearns, says that beyond the creation of moral hazard, offering to reduce principal may also tighten lending by forcing banks to offer “price protection” to borrowers.

Now, I have no idea what “price protection” is, but I would like to say something to Dale about the idea that offering to reduce principal balances may result in tighter lending standards… so if you’ll just excuse me for a moment… be right back.

Dale? Hi there. Mandelman here. Listen, I want to be diplomatic about this… you know that pseudo-threat you made about tighter lending standards as a result of principal reductions? Did someone tell you that if you run out of rationales for not reducing principal balances, hit them with the old “banks will tighten lending” line?

Well, Dale… that would sure make for an interesting threat that I might actually care about… if banks were actually lending… or, I don’t know… maybe if anyone was interested in borrowing. However, since neither is the case, nor is it likely to be the case anytime soon, I’d say the only thing that comes to mind in response to your empty and barely veiled threat about tighter lending in the future as a result of principal reductions is… Shut the front door, Dale.

Let me share a little something with you and your banking pals… it has to do with principal reductions. Do them… don’t do them… stick them up your tailpipe… homeowners barely give a rat’s behind anymore what you do or don’t do… think or don’t think.

You see… I guess you could say that it’s wearing kind of thin, Dale my boy… and homeowners wouldn’t believe you if you said the sky was blue. Loan modifications don’t work because of their re-default rate… and now it’s principal reductions aren’t worth a darn because they create moral hazard.

Well, what would “work” for you and yours, Dale? I think I have an idea of what you and Credit Suisse are all about actually… tell me if I’m getting warm…

Just a scant couple of days ago Credit Suisse won the bidding process and as a result bought $7.014 billion in face value RMBS (“Residential Mortgage-backed Securities”) from the Federal Reserve Bank of New York. The New York Fed bought them from AIG and had them in their Maiden Lane II, which is the New York Fed’s… what do you call that sort of entity… shell company?

So, when Maiden Lane II bought the assets their face value was $39 billion… and they paid $20.5 billion. Now their face value is just over $7 billion and Credit Suisse paid… oh dear, wouldn’t you know it… darn the luck… the NY Fed says the actual price you guys paid won’t be disclosed until April 16, 2012.

Why is that, Dale? How about a little research on that issue? Why can’t the Fed disclose how much the Credit Suisse bid was until April 16, 2012, when the sale was made on January 19, 2012? I’m sure there’s a perfectly good reason don’t get me wrong… I’m sure it’s just something to protect the interests of us U.S. taxpayers. Always looking out for us, aren’t you Dale?

So, I hate to even mention it, but does the fact that you guys at Credit Suisse are running around like vulture investors trying to scoop up distressed residential mortgage-back backed securities at bargain basement prices bother you at all… I mean, considering that at the same time you’re publishing supposed “research” under headlines like, “Mortgage Principal Cuts Don’t Help Homeowners, Says Credit Suisse?”

The only reason I’m asking is that Laurie Goodman of Amherst Securities was quoted in that same Bloomberg article and she said…

“Amherst’s Goodman says that principal reductions are needed to avoid 8 million to 10 million more distressed-property sales.”

See, she said that because she felt it would be a bad thing to have 8-10 million more distressed property sales, but it looks like Credit Suisse wouldn’t actually mind at all if there were lots more distressed property sales, since Credit Suisse is scampering about in the night buying them for pennies on the… no, that’s not right… for some undisclosed amount to be disclosed on April 16, 2012.

The suspense is killing me, Dale. I wonder if Credit Suisse overpaid for the distressed assets they bought? Any guesses on how it will turn out?

On January 6, 2012, Federal Reserve Bank of New York President William C. Dudley, had the following to say on this very subject…

“Analysis by my staff that looks at likely borrower behavior over an extended time horizon suggests that without a significant turnaround in home prices and employment, a substantial proportion of those loans that are deeply underwater will ultimately default — absent an earned principal reduction program.”

Yeppers… so absent principal reductions, looks like I was about right once again… a whole bunch of loans are going to default… which will create a whole bunch of distressed RMBS assets for sale at pennies on the… well, at undisclosed prices for three months.

And Credit Suisse would just HATE that, right Dale? Since it’s evidently the bank’s business model at the moment. I wonder why the bank isn’t making it’s money LENDING, like banks used to do. You know, lending before all that tightening that we’re supposed to be so afraid of, according to you, if we allow principal reductions.

I’m actually thinking that you’re the moral hazard here, Dale… because you certainly don’t seem to have a moral compass. And besides, you’re statements are starting to make me dizzy.

I scanned that Bloomberg article over and over, and it must have slipped your mind because you forgot to mention the bit about Credit Suisse having bought the distressed RMBS assets from Maiden Lane II… two days before you gave the story… or rather the press release…. to Bloomberg… nicely done, Dale… very nicely done… in fact, I’d have to say crackerjack work, my slimy friend.

Don’t feel too badly about this whole thing coming out this way though… I have skills.

Oh, and one more key point… Laurie Goodman made it… it’s about the one place where principal reductions appear to be very effective in preventing defaults…

“We have shown that, even controlling for all other factors, principal reductions are more effective. Realize also that banks are doing it on their own portfolios and have been for years. Why would they continue if it was not more effective?”

Got to hand it to her there… it’s a darn fine question, isn’t it Dale? Why do you suppose banks offer principal reductions when it’s their own portfolio loans, but not when it’s the taxpayers who are on the hook, such as when the loan is owned by Fannie, Freddie, or insured by FHA?

Or, maybe the whole moral hazard thing doesn’t apply when it’s a portfolio loans on a bank’s balance sheet, is that what it is… or isn’t? Or, whatever Dale… no need to reply…no one is listening to you anymore.

Mandelman out.

My Name is Martin.

Mandelman — Mon, 16 Jan 2012 06:35:27 +0000

Racial segregation. The idea sickens me. I try to imagine growing up under the horrors of segregation. I try to imagine how it must feel to not be allowed to go where others go, eat where others eat, drink from the same drinking fountains others drink from, use the bathroom that others use. I try to imagine how it could not hurt badly… how it could not scar deeply.

I close my eyes and see the face of a young boy, my age in 1968, but with skin of darker brown. I look deep into his eyes. I see him pressing his face up against the glass, looking longingly at what others have, that he does not. What he may never be allowed to have. I see him questioning… why? And I want to weep. I want to stop him from hurting. Save him from that pain. I want to scream louder than any scream that has ever been heard… Nooooooooooo! I am ashamed of my country for its policy of racial segregation. And I am seven years old.

I didn’t see racial segregation with my own eyes. If I had, I’m quite sure that it would have burned an impression into my soul that could never have been removed. I don’t know how you grow up and make it through something like that. Do you always feel uncomfortable… always… forever? Do you look at everyone and wonder what they’re thinking about you? Will you always be angry, no matter what? Do you wake up every morning and wonder how it could be that such injustice is allowed to happen?

Today is Reverend Martin Luther King Jr. Day.

As a young boy I learned of Dr. King from my parents at home, and from teachers in school. He was fighting racial segregation… fighting for civil rights. He was strong. Immeasurably strong. Strong like Superman was strong. He had a dream. He was right. He was a hero to so many. He was a hero to me.

Martin King would not back down from what must have seemed like insurmountable odds. Nor would he allow himself to express the rage he must have felt as much as any. He was the youngest person to ever receive the Nobel Peace Prize for his work to fight discrimination and racial segregation through civil disobedience and other non-violent means. He was the greatest kind of American. Because of what he did, what he stood for, what he accomplished… because of him we are the country we are today. Without him we are nothing.

Martin King was a man of faith. Faith in the United States of America. Faith in its people. Faith in all of us. Faith in me. I wanted to be like him. I wanted to be that strong… some day.

Then he was assassinated. Shot. Killed. It was April 4th, 1968. My mother cried. My father did not want to talk about it. I could not understand how… why… I wanted to shoot the person who had shot him. I learned about death from Martin King. I learned about peace from Martin King. I learned about hope from Martin King. I learned about struggle from Martin King. I learned about my country from Martin King. I learned to love and I learned to hate hate because of Dr. King.

Yes, today is his day and he deserves this day as much if not more than any other for whom a day is named… he earned this day… gave his life for this day. President Ronald Reagan signed the bill that made today Dr. King’s day. He didn’t want to though, but he had no choice. Many others fought against this day. I’m sure now they wish they hadn’t.

I was eight years old one month after Dr. Martin Luther King Jr. left this world forever. They sang happy birthday to me, and I was called Marty for the very last time. Because from that day forward… for the rest of my life… I told everyone…

My name is MARTIN.

Are they lying or are they stupid?

Mandelman — Sat, 14 Jan 2012 20:51:30 +0000

I was born and raised in the Northeast… born in Manhattan… father’s family from Boston with too many Harvard grads to count… and I grew up in Pittsburgh. As a result… well, it’d be more than safe to say that I’ve never been at risk of being confused with a Southerner. To my knowledge, after meeting me, nary a soul has later posited: “I forgot to ask, is Martin originally from Alabama or Mississippi?”

Truth be told, people from the Northeast are not bothered in the least by the fact that they’re never mistaken for Southerners. Truth be told, as soon as many Northeasterners hear an opinion uttered in a Southern accent, we get tempted to respond by saying things like, “Thanks Ebb. Now go on… don’t you have a lunch counter to segregate, or something like that?”

All right, calm down… it’s a joke… sort of… but my point here is that I’m familiar with the pompous air of intellectual superiority invariably inbred in the stereotypical cartoon Northeasterner, but let’s face it… you held onto the whole segregation thing far too long, and whenever there’s controversy over whether evolution should be taught alongside “creation science,” in public schools, it’s never coming out of Philadelphia.

Alright, I’ll stop fooling around… you know what I’m saying, and besides my point is that while I perhaps used to be capable of leaning that way when it came to southern accents, once I turned 18 years of age, enlisted in the United States Air Force, and found myself sans hair wearing fatigues and combat boots and saluting second lieutenants like they were four-star generals, all that Northeastern intellectual superiority crap flew straight out the window… of the pick-up truck for which I was now inexplicably longing.

You meet and come to respect all kind of folk when you serve in the U.S. military, and before you know it you’re craving SOS on toast, and saying, “Thank you, Ma’am,” with Gomer Pyle-like enthusiasm for the extra scoop of sausage gravy ladled onto your plate.

The fact is, joining the service, as we used to call it, does wonders to wipe any sort of superior smirk of your face, no matter how it got there in the first place. You act like an idiot at the NCO Club bar, as I did once just after my 21^st birthday, and a Master Sargent cured me of that little behavioral shortcoming with just one punch to my not-so-superior nose. Say what you will about his methods, but that man knew how to get a point across.

So, why was I telling you about all this? Heck if I know.… no, wait… I remember… it’s because although I grew up in the Northeast, over the years I’ve learned to love the English language as spoken by those that hail from our nation’s southernmost states. It’s not that I still didn’t cringe just a little every time Jesse Helms stepped to the podium, but I sure do love the way Southerners communicate with each other.

I remember sitting at the counter of a Waffle House in the Florida panhandle one time, watching these two women waitresses interact as they went about their work serving us all breakfast one morning. One woman was clearly the more experienced of the two, and you could tell that she was in charge, even though they were both taking orders and refilling coffee cups as they communicated back and forth with each other as needed.

The less experienced waitress was having a problem with the coffee maker and figured she’d solicit help from her more experienced co-worker by calling out to explain the specific nature of the problem she had brewing. Without missing a single beat in the tempo of the dialog, her more experienced co-worker replied in a tone and cadence straight off of the Steel Magnolia’s set: “Why Sugaah, I’m sure I don’t caahar.”

And that was that… the problem got solved and I can’t remember how… it didn’t matter… and I returned to my biscuits and gravy.

See, the New York City version of that same sentiment would have been something like, “Hey, what do I look like, Mrs. Coffee over here? Figure it out yourself, bafangool.” And then, silently… the patrons would have immediately divided into two camps, with half agreeing that the less experienced waitress was in fact, bafangool… and the other half thinking the more experienced waitress was a jerk… picking back up a dollar or two that they were about to leave her as a tip before she had revealed her true self through her chosen reply.

“Why Sugaah, I’m sure I don’t caahar,” was a much better way of saying things. It was Southern speak for… “F#@k you,” but in a way that didn’t make anyone feel like taking sides.

So, why am I going the long way around the barn telling you this story? Well, because of Federal Reserve Chairman Ben Bernanke, silly. Aren’t you following me yet? Okay, let me spell it out for you.

Yesterday, the Federal Open Market Committee or FOMC, which is a group of Federal Reserve Bank presidents and members of the Fed’s Board of Governors, that since being established by the Banking Act of 1933, meets eight times a year to set “monetary policy” by establishing the Fed’s short-term “open market operations,” which is what they call it when the Fed buys and sells U.S. Treasury securities.

The FOMC sets the target for the “federal funds rate,” the interest rate that banks charge each other for overnight loans, and that target rate impacts the interest rates charged on various loans to both businesses and consumers, which in turn impacts the U.S. money supply.

(If that’s all Geek to you and you’re interested in learning more about how it all works, here’s a link to a Wikipedia page about the FOMC, or send me an email and I’ll be happy to help you translate it from finance geek to regular English.)

Anyway, the FOMC releases transcripts of it’s meeting minutes and slide presentations five years after they’ve taken place, and yesterday the 2006 meeting transcripts were made public. (You can find the entire year of 2006 FOMC transcripts, etc. HERE. However, please consult your physician before reading too much of them, as certain combinations of medications and FOMC transcripts can lead to depression and suicidal thoughts… I’m pretty sure.)

That’s why you’ve seen a flurry of articles over the last 48 hours talking about how Bernanke, who assumed the throne in 2006, following the Reign of Greenspan that had lasted as long as anyone could remember, had totally blown it as far as seeing what the housing bust would bring.

Now, first let me just point out that none of this should be considered “news,” unless of course you’ve been incarcerated in Kazakhstan until quite recently, and even then, I have it on good authority that many Eastern Block prison guards were involved in flipping condos in Tampa, so you should have even been able to keep up with U.S housing market news from there.

That Bernanke blew it as related to the housing bust is legendary, although at this point, he’s blown it on so many other pivotal events that criticizing him for this is about like going after Joseph Stalin for overlooking the idea of a Bolshevik dental plan for Siberia’s Gulag-imprisoned dissidents.

Quite a few of my readers obviously felt as if this newly released evidence that Bernanke had in fact blown it would exert a vindicating influence on my psyche, as I’ve been known to rail on about how Bernanke couldn’t keep a hot dog stand on Atlantic City’s boardwalk open for the summer, let alone handle the responsibilities of guiding our country through what will someday be understood to have been, the Great Depression Part Deux… so, many sent me links to the plethora of “Ben blew it” type stories.

I, however, had already visited my personal physician and had him write me a note excusing me from having to expose myself to the 2006 FOMC transcripts… hey, I turned 50 this year and you just have to start limiting the risks you take at a certain point. I mean, no one lives forever, and although I once went out on Lake Erie in a metal canoe during a lightning storm after drinking, as I recall, about half a gallon of Thunderbird wine, I was like 18 at the time and thus invincible.

Today if I tried something like that, I’d need to stop for Dramamine and TUMS at the very least, and then I’d realize that I didn’t really have the right shoes on, talking myself out of the whole thing and ending up back at the room in time for “The Daily Show,” with Jon Stewart, and perhaps some skim milk and Nilla Wafers if I felt like I needed a treat.

After maybe a dozen calls alerting me to the FOMC’s release of 2006 meeting transcripts, and another 25 people sending me links to this new evidence of Bernanke’s boobery, I somehow weakened and clicked on one that took me to AP ‘s coverage of the apparently earth shattering news.

Here’s how the story began…

WASHINGTON (AP) — Ben Bernanke presided over his first meeting as Federal Reserve chairman in March 2006 believing the nation’s economy could pull off a “soft landing” from falling home prices. Three months later, Bernanke had begun to grasp that he and others had underestimated the risk housing posed to the economy.

Okay, so… no. That’s not even true. Three months later than March of 2006 Bernanke realized he had underestimated something related to risk to the U.S. economy? No, sir… not a chance in the world that’s even close to correct. In fact, there’s so much wrong with that sentence, that I don’t even know where to begin, so all I’m going to say is…

“Why Sugaah, I’m sure I don’t caahar.” And let’s move further into AP’s article…

Newly released transcripts of Fed meetings during Bernanke’s first year as chairman show that, among Fed officials, he often expressed the most concern about housing. But no official, according to the transcripts, recognized the extent of the damage a housing bubble would cause. A year later, the housing market’s collapse helped send the nation into its worst recession since the Great Depression.

Nope… again that is not a correct statement. Do you see the inconsistencies here? A minute ago the article said that Bernanke had realized something three months after March of ’06, which would have been June of ’06. Now the article is saying that it was a year later that the housing market collapsed, sending us hurdling towards rampant overuse of Depression era metaphors.

Let’s keep going…

In fact, Treasury Secretary Timothy Geithner, then a Fed official, expressed confidence in September 2006 that “collateral damage” from housing could be avoided.

Well, big beans for Timmy. In September of 2006, the housing bubble had barely even started to deflate… credit was still flowing like boxed wine at a Sunday afternoon Open House in Phoenix. Heck, Bear Stearns wasn’t even institutionally lying to clients yet, and someone was able to convince BofA CEO Kenny Lewis that Countrywide was worth $4 billion.

(Besides, when Tim said that he thought we could avoid “collateral damage,” he was probably referring to FDIC Chair Sheila Bair. I’m told that was his pet name fore Sheila… “Collateral Damage.” Don’t look at me like that, that’s what I was told… prove I wasn’t.)

Back to the AP article…

… Geithner, who was then president of the Fed’s New York regional bank, expressed more confidence that the economy could weather the troubles in housing, saying the issue would be the impact on consumer and business spending.

The discussion by the members of the FOMC, the Fed board members in Washington and 12 regional bank presidents, gave no indication that any of them foresaw the devastating impact that the collapse of the housing bubble would have. The country fell into a deep recession and severe financial crisis that led to the loss of more than 8 million jobs.

Stay with me here… are you starting to see where this is going?

So, first of all we see that Tim Geithner is a babbling brook. He’s talking about the economy “weathering” a cooling off of the housing market and how the issue would be some resulting impact on “consumer and business spending.” Why is he saying that?

“Why Sugaah, I’m sure I don’t caahar.” Let’s keep going…

Bernanke and other Fed officials have said that they failed to see the severity of the shock waves from the housing bust. But the transcripts of their closed-door discussions in 2006 provide new details about how the central bank was responding to the unfolding crisis.

No they don’t. The transcripts don’t provide any “new details about how the central bank was responding to the unfolding crisis,” unless maybe this reporter is 11 years old and everything he reads is to him, a “new detail.” The transcripts could provide any such new detail, because the crisis hadn’t happened yet.

The “crisis,” we’re all referring to today didn’t begin until August of 2007. The official “recession,” didn’t officially begin until December of 2007, and it wasn’t announced as having begun in December of 2007… UNTIL NOVEMBER of 2008.

And the article wraps up with…

The transcripts of the final meeting of the year, in December, showed that Bernanke was still expecting that the economy would experience a “soft landing” in which growth would slow enough to cool inflation but not drop into a recession.

You see, as I’ve written many times in the past, our “CRISIS” has never been the deflating of a housing bubble. It would have been… but it wasn’t. It would have been… but in July of 2007… a year after the housing bubble started deflating in earnest, the sudden downgrading of debt securities tied to mortgages caused investors to turn cold essentially overnight, the credit markets froze solid making loans far less available overnight… and soon very near entirely unavailable.

Home prices went into a free fall, and various fleeting stimulus programs and tax incentives notwithstanding, they continue in that free fall today.

As more and more homeowners found themselves underwater, owing more than their home’s value… life events such as job loss, divorce and illness/injury started fueling foreclosures, which added to the other forces that were also creating record numbers of foreclosures… and the deflationary spiral slowly but steadily gained speed incinerating to-date more than $10 trillion in consumer wealth and eroding state revenues at an increasingly alarming pace.

The reporter who wrote the story for AP News referenced above, simply lacked the knowledge base to interpret the FOMC meeting transcripts.

The transcripts, in a way, do show that Bernanke and the Fed missed the housing bust, but only because the housing bust was entirely eclipsed by the global credit crisis, and that’s what we’ve been dealing with ever since the summer of 2007.

Want to have some fun? Come with me… follow the bouncing boobs, Ben Bernanke and Hank Paulson… and don’t forget to watch the dates… with compiled quotes courtesy of austrianfilter.blogspot.com.

March 28th, 2007 – Ben Bernanke: “At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.”

April 20th, 2007 – Paulson: “I don’t see subprime mortgage market troubles imposing a serious problem. I think it’s going to be largely contained. All the signs I look at show the housing market is at or near the bottom.”

June 20th, 2007 – Bernanke: (the subprime fallout) “will not affect the economy overall.”

July 12th, 2007 – Paulson: “This is far and away the strongest global economy I’ve seen in my business lifetime.”

October 15th, 2007 – Bernanke: “It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.” (That was the last time we heard from Bernanke on this subject until February of 2008.)

February 29th, 2008 – Bernanke: “I expect there will be some failures. I don’t anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system.”

February 28th, 2008 – Paulson: “I’m seeing a series of ideas suggested involving major government intervention in the housing market, and these things are usually presented or sold as a way of helping homeowners stay in their homes. Then when you look at them more carefully what they really amount to is a bailout for financial institutions or Wall Street.”

March 16th, 2008 – Paulson: “We’ve got strong financial institutions . . . Our markets are the envy of the world. They’re resilient, they’re…innovative, they’re flexible. I think we move very quickly to address situations in this country, and, as I said, our financial institutions are strong.”

March 18th, 2008 – Bear Stearns Bailout Announced

May 7, 2008 – Paulson: ‘The worst is likely to be behind us,”

May 16th, 2008 – Paulson: “In my judgment, we are closer to the end of the market turmoil than the beginning.”

June 9th, 2008 – Bernanke: Despite a recent spike in the nation’s unemployment rate, the danger that the economy has fallen into a “substantial downturn” appears to have waned,

July 16th, 2008 – Bernanke: (Freddie and Fannie) “…will make it through the storm,” “… in no danger of failing. … they are adequately capitalized.”

July 20th, 2008 – Paulson: “It’s a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.”

August 10th, 2008 – Paulson: “We have no plans to insert money into either of those two institutions.” (Fannie Mae and Freddie Mac)

September 8th, 2008 – Fannie and Freddie nationalized. The taxpayer is on the hook for an estimated $1-1.5 trillion dollars. Over $5 trillion is added to the nation’s balance sheet.

September 19th, 2008 – Bernanke: “… most severe financial crisis” in the post-World War II era. Investment banks are seeing “tremendous runs on their cash. Without action, they will fail soon.”

September 21st, 2008 – Paulson: “The credit markets are still very fragile right now and frozen. We need to deal with this and deal with it quickly. The financial security of all Americans … depends on our ability to restore our financial institutions to a sound footing.”

September 23rd, 2008 – Paulson: “We must [enact a program quickly] in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families’ financial well-being, the viability of businesses, both small and large, and the very health of our economy.”

Look… are you feeling me here? Do you see what I’m saying? What’s the deal? Are they lying or are they stupid, because there’s no way in the world we should be talking about whether the FOMC meeting transcripts show Bennie and the Feds missed the housing bust.

So, to everyone who sent me the news of the FOMC’s transcripts being released… thank you. I always appreciate it when my readers send me links to news events they think I should know of, so don’t let my sarcasm about the whole thing prevent that from happening in the future. But on this subject, I don’t need to be vindicated… what I need is for people to realize how distorted the coverage of the subject has been from the beginning.

Think about it… the banks and the mainstream media have us looking for love in all the wrong places. We’ve been told to blame borrowers, brokers, servicers… everyone but the bankers who caused the global credit crisis and have continued to defraud… well, everyone involved as they’ve driven our nation’s economy to new lows.

And in the event that you’ve read all of this and still don’t agree, then at this point all I can think of to say to you is…

“Why Sugaah, I’m sure I don’t caahar.”

Mandelman out.

The Quiet Man… Utah Attorney Walter Keane – A Mandelman Matters Podcast

Mandelman — Fri, 13 Jan 2012 21:01:58 +0000

Utah Attorney Walter Keane is the lawyer that filed four quiet title claims last year, which means he was seeking to obtain a court order granting clear title to the properties in question. And all four were granted by the Utah courts… four quieted titles to the four homes. And at least one of the homeowners subsequently sold his home and went on his very merry way. This month’s in Harper’s magazine, Christopher Ketcham wrote a feature story about Walter, among other things, titled: “STOP PAYMENT! A homeowners’ revolt against the banks.”

I got to know Chris Ketcham as he was writing the story for Harpers, and yes I was a bit concerned that Walter’s experience obtaining quiet title would be met with… well, I don’t know… problems of one sort or another… and sure enough the state appeals court ended up saying no way. Free houses are just few and far between, so what’s new? Maybe if Walter Keane was your average foreclosure defense attorney, the story would have ended there, but Walter is anything but average… in fact, he’s nothing if not interesting… fascinating even. So, the story is not over, far from it. In fact, he’s more fired up than ever to help homeowners battle the banks.

Walter Keane is a very knowledgable and experienced lawyer who is also an out-of-the-box thinker. I really enjoyed interviewing him on this podcast, and whether you’re a homeowner or foreclosure defense attorney, I think you’ll find him sincere, interesting, smart… and very entertaining. You can find out more about him at his firm’s Website: www.waltertkeane.com.

This podcast is divided into Part One and Part Two. Part One is all about the quiet title experience, but in Part Two the real fun begins. Click PLAY below for Part One… and then come back for Part Two when you’re ready.

Mandelman Matters » mortgage crisis

OneWest Bank DOES IT for Lisa in Massachusetts! (DOERS ROCK!)

It all started early last Saturday morning when I got a call about a homeowner in Massachusetts scheduled to lose her home to foreclosure sale in just two days…

OneWest Bank Called Today and Lisa Just Couldn’t Be Happier!

~~~

DOERS you DID it again!

Our DOERS DID IT Again… One West Bank Stops Sale in East!

Who Let the DOERS Out? Who-Who-Who-Who-Who?

Who Let the DOERS Out? Who-Who-Who-Who-Who?

OFFICIAL DOER STATEMENT OF PURPOSE

Here’s what we DOERS DO:

SO, HERE’S THE BOTTOM-LINE…

To become a DOER you only need to DO 3-4 things and they’re all easy:

Time Matters… A Lot.

Please don’t delay… DO it today… it’s easy to DO… and to win, we need you.

Martin Andelman at: mandelman@mac.com

Abigail Field at: ACFRealityCheck@yahoo.com

And also don’t forget to subscribe here: SUBSCRIBE

Mandelman & Field… OUT!

DOER ALERT: Wells Fargo this is Unnecessary, Unreasonable and Unthinkable

If there was approval of a loan modification, why would there be a sale date to postpone?

Lucky for me, I know some people who DO know what to DO…

RIGHT DOERS?

Tom Stover & Jeneane Traynor-Stover

8216 Seeno Ave.

Granite Bay, CA 95746

Loan Number #0150299733

~~~

Chairman of the Board, President, CEO: John.G.Stumpf@wellsfargo.com

John Stumpf (415) 396-7018 john.g.stumpf@wellsfargo.com CEO: John G. Stumpf 420 Montgomery St. San Francisco, CA 94163 1-866-878-5865

Bank of America Does the Wright Thing – DOERS Did It Again. JOIN US, BE A DOER!

We’ve got over a thousand DOERS… and we’ve saved 6 out of 6 homes, all of which were about to be sold within days or already sold as was the case with Mr. Dale Wright. (6 out of 6 is NOT a coincidence, by the way.) But, if you really want to stop the foreclosure crisis…

We’ll need at least 100x that number…

I have to be honest about something…

Time Matters… A Lot.

Sample emails from a few DOERS to Bank of America this last time around…

OFFICIAL DOER STATEMENT OF PURPOSE

Here’s what we DOERS DO:

Please don’t delay… DO it today… it’s easy to DO… and to win, we need you.

Martin Andelman at: mandelman@mac.com

Abigail Field at: ACFRealityCheck@yahoo.com

And also don’t forget to subscribe here: SUBSCRIBE

Mandelman & Field… OUT!

Look, this just isn’t that hard… The Solutions to Pressing Problems.

DOER ALERT: Dear Bank of America…

The Case of the Grieving Grandpa and the Lying Lender

COME ON DOERS… DO SOMETHING ABOUT THIS…

DOERS YOU KNOW WHAT TO DO!

Brian Moynihan, President, CEO & Chairman

Bank of America

Email: brian.t.moynihan@bankofamerica.com

Credit Suisse Tells Bloomberg: “Mortgage Principal Cuts Don’t Help Homeowners?”

Not Recognizing Losses and Unlimited 0% Interest Loans Don’t Help Banks, Says Credit Slush

Do Principal Reductions Help, or Are they the Poster Child for Moral Hazard?

Moral Hazard and Principal Reductions

Optimism is a hard thing of which to let go…

ENTER: Mr. Dale Westhoff of Credit Suisse…

I’m actually thinking that you’re the moral hazard here, Dale… because you certainly don’t seem to have a moral compass. And besides, you’re statements are starting to make me dizzy.

My Name is Martin.

Are they lying or are they stupid?

The Quiet Man… Utah Attorney Walter Keane – A Mandelman Matters Podcast

This podcast is divided into Part One and Part Two. Part One is all about the quiet title experience, but in Part Two the real fun begins. Click PLAY below for Part One… and then come back for Part Two when you’re ready.

He’s The Quiet Man… Utah Attorney Walter Keane…

a Mandelman Matters Podcast

PART 1:

###

PART 2:

John Stumpf (415) 396-7018
john.g.stumpf@wellsfargo.com
CEO: John G. Stumpf
420 Montgomery St.
San Francisco, CA 94163
1-866-878-5865