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.

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.

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:

1. 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.
2. 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.
3. 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.
4. 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.

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.

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.

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

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.

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!

Los Angeles attorney, and Los Angeles Best Lawyers’ First Amendment Law Lawyer of the Year for 2012, Gary Bostwick, of the law firm, Bostwick & Jassey LLP, is taking the California State Bar to court, among other things challenging the state’s Senate Bill 94 (“SB 94″) for its constitutionality or lack thereof.  In a complaint filed in Los Angeles Superior Court on January 13, 2012, Bostwick alleges that certain SB 94 provisions, “as applied and enforced by the State Bar, violate both the United States and California constitutions.”

And all I can say to that is… it’s about damn time.  Followed by, how can I help?  (A copy of the complaint follows this article at bottom.)

Right now, I have to catch a flight… but tune in later for further commentary on:

• How the California State Bar has done irreparable  harm to the people and to the economy of California.
• Why many of the state’s most influential lawyers and policy experts think it shouldn’t be anything more than a trade association.
• Why two years ago Governor Schwarzenegger barred the Bar from collecting its dues from its members.
• My first hand knowledge of how little the State Bar knows about the subject matter it’s supposed to be regulating.  It’s shameful and an embarrassment to the legal community.
• A Mandelman Matters Podcast with Bar Defense and Ethics attorney David Cameron Carr who was an associate trial council for the California State Bar for over a decade, and thinks the Bar is… well, you’ll have to hear it from him, but it’s not at all good, and he knows as much about the inner workings of the Bar as anyone.
• And much, much more!

In California, the efforts to stop lawyers from representing homeowners have been more extreme than in any other state.  Here the campaign to malign the legal profession has been driven by legislative committees and supported by the California State Bar Association.  In October 2009, California’s SB 94 effectively prevented lawyers from offering to represent homeowners who are seeking to avoid foreclosure through modification of their loans.  Under the guise of “charging up front makes you a scammer,” SB 94 has made it illegal for a lawyer to charge a homeowner an upfront retainer for legal fees.

The new law has failed to stop scammers, as was its supposed purpose, and in fact has made it much easier for California’s homeowners to get ripped of by unscrupulous operators because when you remove the legitimate attorneys from the soup, all that remain are the scammers, and they get better and better at looking legit.

I’m not the only one who sees the law as having been ineffective.  Last December, Suzan Anderson, who heads up the bar’s task force on loan modifications, told David Streitfeld of The New York Times…

“I wish the law had worked,” Ms. Anderson said.

So, more than two years later, we are finally going to see how the courts decide this so-called controversy.  As stated in Bostwick’s complaint…

“The State Bar publicly takes the position that an attorney who provides a homeowner loan modification or other forbearance services may not agree with the homeowner that the services requested will be broken down into component parts and that a fee for each component part may not be earned and collected as each component part is completed.”

Bostwick is a First Amendment lawyer and the suit is going after the constitutionality of SB 94 on a state and federal basis.  For example, the complaint alleges that “the challenged provisions of SB 94 as applied by the State Bar…”

… unconstitutionally infringe upon the rights of Plaintiff, other members of the State Bar and citizens of California seeking legal representation under Article I, Section l0 of the United States Constitution, which states that no State shall pass any law “impairing the Obligation of Contracts.”

And…

… unconstitutionally infringe upon the rights of Plaintiff, other members of the State Bar and citizens of California seeking legal representation under Article l, Section 9 of the California Constitution, which states that a “law impairing the obligation of contracts ma)/ not be passed.”

The plaintiff in the case is Los Angeles real estate attorney Swazi Taylor.  A couple of months ago, after being certified by the State Bar Administrative Court as an “expert” in subjects that included HAMP, loan modifications and other matters related to the foreclosure crisis, I testified on Swazi’s behalf when he was charged with violating SB 94.  I helped the court to better understand the dynamics of the crisis and what’s involved when representing homeowners in the loan modification process. To-date, there has been no decision in Swazi’s case.

Other aspects of the suit allege that the State Bar has violated the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution, and the Due Process Clauses of Article 1, Section 7 of the California Constitution.  And the suit goes on to ask for both declaratory and injunctive relief.

The core issue, however, is about when a lawyer who represents a homeowner trying to get their loan modified can be compensated.  The Bar claims the law requires an attorney to wait until the very end of the case, however, the actual language contained in SB 94 doesn’t say that… it says lawyers cannot be paid until completing “any and all services (the lawyer) has contracted to perform…” Up until Ms. Anderson’s presentation at the annual meeting, lawyers were dividing services into separate contractual arrangements and accepting payments from homeowners as discreet sets of services were complete.

Not that they were treated as heroes, mind you… in fact, they’ve been treated as anything but, to the point where many have told me that they often have felt uncomfortable telling their peers and others about their practices.  From the very beginning it was painfully obvious that the banks didn’t want homeowners to be represented when applying for a loan modification, they wanted the homeowners to show up alone, unknowledgeable, afraid and ashamed.  It’s so much easier to do whatever you want when you only have a homeowner with which to contend… lawyers, after all, gum everything up, always looking out for their client’s best interests, blah, blah, blah…

Today, we should all understand that going up against the too-big-to-fail banks and their servicing arms, whether in the courts, or when working to obtain agreements to modify loans and keep homeowners in their homes, has been a very difficult and largely thankless job.  It certainly wasn’t my plan, but as I’ve written over 600 in-depth articles on the foreclosure crisis, I’ve had a front row seat, watching talking to literally thousands of homeowners endure the hellish process, and getting to know literally hundreds of lawyers trying to help them save their homes…. many of which have become some of my closest friends not only here in California but all over the country.

For a thorough discussion of SB 94, here’s a link to my latest examination of the law that has caused more harm than good: Bull Meet Chins Shop… California’s SB 94 and the State Bar, Two Years Later.

IF YOU’RE AN ATTORNEY PRACTICING IN CALIFORNIA AND YOU WANT TO KNOW MORE ABOUT HOW YOU CAN HELP SUPPORT THIS CASE AND OTHER RELATED EFFORTS, YOU NEED TO CONTACT ME:

Martin Andelman

mandelman@mac.com

~~~

Now, meet the lawyers with the legal “chops” to handle this case…

and stay tuned because I’ll be writing a lot more about this suit as it proceeds in the courts… 

From the “Attorney Profiles” section of the Bostwick & Jassey LLP Website… 

Gary L. Bostwick

Gary L. Bostwick has been a trial attorney for more than 30 years, and is also a certified specialist in appellate law by The State Bar of California Board of Legal Specialization.  He has tried over 60 cases.  Gary is a fellow of the American College of Trial Lawyers, an exclusive organization of advocates that only invites members with outstanding trial experience.  He has been prominent in many complex business litigation and constitutional law matters, with a special emphasis on First Amendment and media concerns.  He has represented clients as counsel in three different matters heard by the United States Supreme Court. Chambers USA and The Legal 500 US recognized him as one of California’s leading media and entertainment lawyers, and he is listed as one of “The Best Lawyers in America” in the First Amendment area.

He has authored numerous articles, including, A Taxonomy of Privacy: Repose, Sanctuary & Intimate Decision, 64 CALIFORNIA LAW REVIEW 1447 (1976), which has been cited by the California Supreme Court.

Gary has served as an adjunct professor of law at Loyola Law School, Southwestern Law School and USC’s Annenberg School for Communication, teaching about the First Amendment, defamation, privacy and other legal issues impacting journalists.

Gary has a J.D. and M.P.P. from the University of California, Berkeley, where he served as Articles Editor of the California Law Review at Boalt Hall, and he has a B.S. in engineering from Northwestern University.  He is a member of the California and Wyoming State Bars.  Gary is fluent in Spanish and German.

Jean-Paul Jassy

Jean-Paul Jassy is an experienced litigator at all levels, ranging from document-intensive, multi-million dollar business disputes to free speech and free press cases before the United States Supreme Court and the Supreme Court of California.  For over a decade, Jean-Paul typically has represented media and entertainment companies and others with free press, free speech and copyright concerns.  He also has extensive experience representing small, mid-sized and large companies in business disputes and appeals.

Jean-Paul was selected by his peers for inclusion in The Best Lawyers in America® 2011 in the field of First Amendment Law. Selection to Best Lawyers is based on an exhaustive and rigorous peer-review survey comprising more than 3.1 million confidential evaluations by the top attorneys in the country.  The publishers of Los Angeles Magazine and  Law & Politics call Jean-Paul “one of the top First Amendment and media attorneys” in Los Angeles, and, for the sixth consecutive year, have recognized him as a “Rising Star” — a peer-reviewed honor given to only 2.5% of attorneys in Southern California — in the fields of First Amendment/media/advertising law, general litigation and appellate law. [See Article]

Jean-Paul and his work have been discussed in American Lawyer,California Lawyer, Los Angeles Times, Los Angeles Daily Journal and many other publications.  He is often called upon to offer expert commentary on First Amendment and media law issues.

Jean-Paul has served as an adjunct professor at UC Irvine’s new law school, teaching a course on media law and, in Spring 2012, he will teach a course on First Amendment law at UC Irvine School of Law.  He also has served as an adjunct professor of law at the University of Southern California Law School (teaching Constitutional Law II – First Amendment law) and at Southwestern University Law School (teaching a course on the law of defamation, privacy and publicity).   And, for four years, Jean-Paul taught legal and ethical issues in journalism, a required course for a journalism certificate, at UCLA Extension.

Jean-Paul is Membership Chair of the American Bar Association’s Forum on Communications Law, a national committee of over 6,000 members focusing on issues relating to legal counseling of print media, the telecommunications industry and electronic media. He is the former Co-Chair of the California Chapter of the Media Law Resource Center (MLRC), a non-profit information clearinghouse that monitors developments in media law and First Amendment rights.

Jean-Paul received a J.D. from the University of Southern California Law School, where he was Chair of the Hale Moot Court Honors Program, and he has a B.A., with highest honors, in political science from the University of California, Berkeley.

Mandelman out.

And here’s the complaint itself:

Declatory Relief Taylor v. CA State Bar

It’s time for me to have an adult conversation with the experienced practicing attorneys in this country.  Other grown-ups are welcome to sit in as well, but it’s time for children to be in bed or occupied elsewhere, okay?

Well, today we have a mammoth size foreclosure problem in this country, and it’s being talked about like it’s damn near an unsolvable problem… as if solving it would require determining the chemical origins of life, or figuring out whether black holes really do exist in space.

The foreclosure crisis, thank goodness, is not a black hole-type problem as many would have us believe.  It is a problem that, political constraints notwithstanding, exists at the juncture of economics and the rule of law.  In other words… it’s an oil spill… perhaps the worst oil spill of which the world has ever conceived… the Exxon Valdez meets Deepwater Horizon x 100, if you will… but it’s still just an oil spill.

It’s also important to note that as an economics problem alone, the foreclosure crisis is not a particularly challenging one to solve.  Some would rush to remind me that any proposed solution would be rife with “moral hazard,” and while that may be true, it doesn’t make the problem insoluble, by any means.

The elephant in the room is that what we’re facing in this country today is not just a foreclosure crisis, what we’re dealing with with is much better described as a FRAUDclosure crisis.

A couple of years ago, many would have said that my use of the word “fraud” before “closure,” is just hyperbole.  Today, however, anyone voicing that sort of opinion is selling something.  Even a cursory review of last year’s scathing “consent orders,” that federal regulators issued after months spent investigating mortgage servicers… or a quick perusal of the complaints filed against the servicers by attorneys general in Massachusetts, Nevada, Maryland, or Arizona… or by reading any number of published court decisions favoring homeowners… and one can only conclude that use of the word “fraud” is, if anything, understatement.

Additionally, this past year has been a turning point for the general public as far as FRAUDclosures are concerned.  Television’s most venerable news magazine, “60 Minutes,” along with newspaper-of-record, “The New York Times,” joined a long list of others documenting the many ways that banks and mortgage servicers are routinely breaking numerous laws in order to take advantage of homeowners in foreclosure.  It’s now widely understood to be something that’s occurring all over the country, and even though the banking industry continues to try to dismiss publicized instances as insignificant dalliances or “isolated incidents,” their sheer number has made such attempts laughable.  And the levels of wholesale anger and dissatisfaction with government felt among the populace are both palpable and rising fast.

Today, even forecasts from the likes of Goldman Sachs and Amherst Securities peg the number of foreclosures between 10.4 and 14 million by year-end 2014, and those numbers could easily go higher should home prices continue to fall… which they invariably will.  Add those numbers to the millions of foreclosures already water under the bridge, and were talking about a crisis that results in ONE IN FOUR Americans with mortgages losing their homes to foreclosure in the next handful of years.

What I’m describing will unquestionably devastate any hope for recovery in our broader economy for any number of reasons.  For one thing, as banks are forced to recognize their losses incurred on the mortgage-backed securities and CDOs that capitalize their balance sheets, they will become insolvent… and this time many will be forced to fail.  For another, home prices will continue falling pushing more and more homeowners underwater and consumer spending will continue to decline and that will lead to rising unemployment, which will in turn fuel further foreclosures.  And those hopelessly underwater will begin walking away en masse, which will further exacerbate the decline in prices and become impossible to combat.

All of these factors and more will combine to reduce future demand for residential real estate dramatically… perhaps by half, but in addition, with no secondary mortgage market… no ability to securitize debt… even those wanting to buy homes going forward will find credit to be tight and tighter, destroying any potential for recovery in the housing market.

And I’m no longer in a small group of people writing about this deteriorating situation as was the case three plus years ago.  Every day others are waking up to the fact that what we’ve been told about foreclosures to-date by our government and the financial services and related industries, has proven itself to be at best mistaken… at worst misdirection… or, not to put too fine a point on it, outright folderol.

As conservative columnist, Peggy Noonan, has pointed out recently, it’s simply impossible to imagine this sort of future without also seeing social unrest on a scale not seen in this country since at least the 1930s.  Writing recently about the Occupy Wall Street (“OWS”) movement, Noonan echoes my sentiments on the situation to a tee…

“OWS is an expression of American discontent, and others will follow.  Protests and social unrest are particularly likely if people feel they are unfairly losing their homes to support irresponsible, law-breaking institutions that have successfully disregarded the fundamental rules of capitalism and good citizenship.”

There should be no question in anyone’s mind… there are only two paths ahead from which to choose.  Both involve fighting a war… but on one path the battle is fought by lawyers in our courts… on the other, by citizens in our streets.

Make no mistake about it… if we are to mitigate any of the  damage being caused, uphold the rule of law, and protect the rights of millions of homeowners… it should be obvious to anyone that WE NEED TENS OF THOUSANDS OF LAWYERS trained in foreclosure defense, loss mitigation and bankruptcy.  And yet, more than four years into the FRAUDclosure crisis, we don’t have anywhere near the number of trained, ethical attorneys required to meet the demand.

We’re all adults here, so let’s not kid ourselves about why that’s the case.  

We all know why we don’t have the lawyers we need to marshall a more effective defense of homeowners engulfed by the FRAUDclosure crisis… it’s because THERE’S NO MONEY IN IT.  Or, at least that’s what lawyers have been told they are supposed to believe.  Not only that, but the message has been that there  shouldn’t be any money in representing homeowners at risk of FRAUDclosure. It’s as if attorneys profiting from representing homeowners at risk of FRAUDclosure is somehow a bad thing.

AND THAT’S JUST 100% BANKER-INSPIRED B.S.

Don’t you see what’s happened here?  We’ve allowed the banks, and the government that’s been bailing them out, to essentially criminalize the profit potential in representing homeowners at risk of foreclosure… and wonder of wonders, miracles of miracles… here we sit with what appears to be an unsolvable problem.

Consider this… bankers say that they’ve been overwhelmed by the millions of homeowners unexpectedly seeking loan modifications and that’s why applying for a loan modification has been such a nightmare.  But, what about the number of foreclosures occurring in the same time frame?  Haven’t there been an unprecedented and unexpected number of foreclosures too?  So,why is it that the banks have no problems accommodating the millions of unexpected foreclosures, but the millions of unexpected loan modifications represent an unsolvable problem?

It’s simple… because on the foreclosure side of the equation, banks allow lawyers to be profitably compensated for handling foreclosures, and sure enough those law firms have figured out how to handle any number of foreclosures that come down the pike… in fact, the more the merrier, as they say.  On the loan modification side of the house, however, profits are a dirty word… and wouldn’t you know it, the problem is unsolvable.  Why am I not surprised?

Over the TWO YEARS following the Deepwater Horizon disaster, BP spent $21 billion to clean up the Gulf of Mexico.  In the FOUR YEARS since the tsunami of foreclosures began, we’ve spent roughly ten percent of what BP spent cleaning up the Gulf… $2.4 billion… and the vast majority of that amount paid to mortgage servicers… and we’re wondering why the problem can’t be solved?

 A MESSAGE TO OUR NATION’S LAWYERS…

It’s the biggest financial opportunity for the legal profession

SINCE THE REAR END COLLISION. 

The fact is… there is a HUGE OPPORTUNITY today to build a very profitable legal practice based on the ethical and effective representation of homeowners caught in the FRAUDclosure crisis.

From the very beginning of the mortgage meltdown, banks have tried to make sure that homeowners were not represented by attorneys when trying to save their homes from FRAUDclosure.   The reason is now apparent: Banks knew it was a FRAUDclosure crisis before the rest of us did because they’re the ones who put the FRAUD into FRAUDclosure.  From the earliest days of the crisis, the banks and the Obama Administration have been reinforcing TWO LIES:

1. Homeowners at risk of foreclosure don’t need lawyers… they can just call their bank directly.  That’s like the police telling someone under arrest that he or she doesn’t need a lawyer because any questions can be answered by the District Attorney.  It’s a damn lie… homeowners DO NEED LAWYERS to help them save their homes because it’s not just a foreclosure crisis, it’s a FRAUDclosure crisis.
2. A lawyer who charges a homeowner at risk of foreclosure up front… is a “SCAMMER.”  That is not only a LIE, but it’s a lie to achieve two key bank objectives.  One – It stopped many homeowners from seeking legal representation, thus allowing the banks to do whatever they wanted as related to foreclosing on their homes.  Two – It stopped countless attorneys from building a profitable practice based on representing homeowners at risk of foreclosure.

The California Example…

In California, the efforts to stop lawyers from representing homeowners have been more extreme than in any other state.  Here the campaign to malign the legal profession has been driven by legislative committees and supported by the California State Bar Association.  In October 2009, California’s SB 94 created a law that has effectively prevented lawyers from offering to represent homeowners who are seeking to avoid foreclosure through modification of their loans.  Under the guise of “charging up front makes you a scammer,” SB 94 has made it illegal for a lawyer to charge a homeowner an upfront retainer for legal fees.

Quite predictably, the law has made it difficult or even impossible for California homeowners to find quality legal representation related to seeking loan modifications, forcing those at risk of foreclosure who want to be represented by an attorney into either litigation or bankruptcy.  Writing for The New York Times in December 2010, David Streitfeld’s article titled, “Homes at Risk, and No Help from Lawyers,” described the situation in California related to SB 94.

In California, where foreclosures are more abundant than in any other state, homeowners trying to win a loan modification have always had a tough time. 

Now they face yet another obstacle: hiring a lawyer.

Sharon Bell, a retiree who lives in Laguna Niguel, southeast of Los Angeles, needs a modification to keep her home. She says she is scared of her bank and its plentiful resources, so much so that she cannot even open its certified letters inquiring where her mortgage payments may be. Yet the half-dozen lawyers she has called have refused to represent her.

“They said they couldn’t help,” said Ms. Bell, 63. “But I’ve got to find help, because I’m dying every day.”

Lawyers throughout California say they have no choice but to reject clients like Ms. Bell because of a new state law that sharply restricts how they can be paid. Under the measure, passed overwhelmingly by the State Legislature and backed by the state bar association, lawyers who work on loan modifications cannot receive any money until the work is complete. The bar association says that under the law, clients cannot put retainers in trust accounts.

To make matters worse, SB 94 has recently become controversial.  In late September 2011, Suzan Anderson, who is the supervising trial council of the state bar’s special team on loan modifications, made an unscheduled appearance at the bar’s annual conference, presenting what she purported to be the bar’s new interpretation of SB 94.  Literally hundreds of attorneys and legal scholars disagree, however, and litigation has recently been filed against the bar seeking declaratory relief, so we’ll soon see the courts decide the issue.

The core issue is about when a lawyer who represents a homeowner trying to get their loan modified can be compensated.  The bar claims the law requires an attorney to wait until the very end of the case, however, the actual language contained in SB 94 doesn’t say that… it says lawyers cannot be paid until completing “any and all services (the lawyer) has contracted to perform…” Up until Ms. Anderson’s presentation at the annual meeting, lawyers were dividing services into separate contractual arrangements and accepting payments from homeowners as discreet sets of services were completed.

Regardless of which side of the debate you’re on, the issue highlights how far the banking lobby will push a state legislature and state bar association in an attempt to prevent homeowners from being represented by legal council when trying to to avoid foreclosure, and it should come as absolutely no surprise that SB 94 was born in the state’s Senate Banking Committee, sponsored by Sen. Ron Calderon, who chairs that committee.

Advocates of SB 94 claim that it was needed to stop “scammers” who were preying on homeowners in distress from accepting up-front fees.  As quoted from Streitfeld’s article in The New York Times…

A spokesman for the Mortgage Bankers Association said it simply wanted to protect homeowners from fraud. “Be very careful about anyone who wants you to pay them to help you get a loan modification,” said the spokesman, John Mechem.

The evidence of any sort of army of lawyers-turned-scammers ripping off homeowners has always been thin, and by “thin” I mean nonexistant.  In the two years since the bill became law, the bar has taken some type of disciplinary action related to the representation of homeowners in foreclosure against two dozen lawyers, give or take a few.  In a state with more than 200,000 lawyers and 2 million homeowners in foreclosure, two dozen lawyers disciplined would hardly seem justification for a law that effectively prevents lawyers from helping homeowners get their loans modified.

Last December, Suzan Anderson, who heads up the bar’s task force on loan modifications, told The New York Times…

“I wish the law had worked,” Ms. Anderson said.

It’s also telling that no other state in the country has a law anything like SB 94, in fact, the rest of the states follow the FTC’s Mortgage Assistance Relief Services rule, MARS, which was adopted on January 30, 2011, and it does allow attorneys representing homeowners seeking loan modifications to accept funds in advance into their trust accounts.

The New York Times article also offered the perspective of several California homeowners seeking legal assistance in a post SB 94 world…

Mark Stone, a 56-year-old general contractor in Sierra Madre, feels differently. A few years ago, he got sick with hepatitis C. Unable to work full time, he began to miss mortgage payments. The drugs he was taking left him “a little confused,” he said.

Mr. Stone knew that his condition put him at a disadvantage in negotiations with his bank. So he hired Gregory Royston, a real estate lawyer in Redondo Beach. It took Mr. Royston nearly a year, but he restructured the loan.

 Without the lawyer, Mr. Stone said, “I’d be living under a bridge.

”The legal bill, paid in advance, was $3,500. “Worth every penny,” said Mr. Stone, who is now back at work.

“This law,” Mr. Royston said, “took the wrong people out of the game.”

A Bleak Picture in California…

California’s approach to discouraging lawyers from representing homeowners at risk of foreclosure has not served the state or its residents well at all.  California is the “hardest hit” of all 50 states, accounting for one of every five foreclosures in the U.S.  Almost half of California’s homeowners are either underwater or effectively underwater today.  Since 2008, there have been 1.2 million foreclosures statewide, and that number is expected to exceed 2 million by the end of 2012.  And, according to the report published by the California Reinvestment Coalition…

The 2 million foreclosures expected by the end of this year are forecasted to cost the state and its residents $650 billion statewide.

Today, in California alone there are roughly TWO MILLION homeowners in foreclosure.  I don’t know exactly how many we have nationwide, estimates vary, but are in the 5 million range.  I do know that if two million people needed just 10 hours of legal assistance, it would take 20 million man hours.  Assuming a six hour work day and a 260 day work year… that’s just under 13,000 years assuming only one lawyer were involved.  To help two million people, assuming 10 hours each, at best would require more than 10,000 lawyers trained and working efficiently.

How many attorneys do we have  trained and ready to help loans get modified, represent homeowners in foreclosure defense matters and/or in bankruptcy.  Nowhere near 13,000 that’s for sure… in fact, we might not find 1300 either… and many would say the number could be closer to 130, and with the proliferating fraudulent documents… the abuses by servicers… the number of people who are foreclosed on illegally… its become easy to see the disease, and trained ethical lawyers would seem the only cure.

Mandelman out.

~~~

We need a literal army of experienced litigators, and Max Gardner’s Bankruptcy Boot Camp has trained close to 900 attorneys to protect the rights of homeowners in foreclosure.  I’ve attended Max’s Boot Camp… I could never recommend it strongly enough… and often do.  But, there’s more than legal training that’s required here… and if we’re going to attract the number of lawyers we need to fight this war…

The Answer is Money…

What Was Your Question?

Ohio’s former Attorney General Marc Dann is a highly experienced foreclosure defense attorney and a graduate of Max Gardner’s Boot Camp. He’s proven in his own successful practice that lawyers have the opportunity to DO GOOD… and DO WELL at the same time by learning the ins and outs of this, unfortunately, very fast growing and specialized field.  And he’s developed a comprehensive training and ongoing support program that allows experienced foreclosure defense attorneys to immediately access new clients and the right clients, improve operations within their firms, and yes… increase their profitability dramatically.

Marc understands our need for an experienced army of foreclosure defense lawyers, but he also understands the reality that lawyers have to make money in order to operate effectively.  In a phrase, a lawyer that can provide effective representation for homeowners at risk of foreclosure today, should not be worried about losing his or her own home to foreclosure because that benefits no one.

So, Marc has developed and employed best practices in building his own successful foreclosure defense practice, and now he’s teaching other attorneys how to make money in foreclosure defense so that ultimately he will have provided countless thousands of homeowners all over the country with access to highly capable, ethical and experienced attorneys.

Marc Dann’s LAW PROFITS program will take experienced and effective attorneys committed to foreclosure defense and protecting the rights of homeowners, and help transform them into vibrant, profitable firms or individual legal practices.  Some of the innovative solutions Marc will be delivering include:

• How to cut through the noise created by scammers, reaching out to homeowners in a very honest and compelling way.
• When and how to sue the bad modification company or bad lawyer.
• Suing the foreclosure mills for fun and profits.
• Using Fair Debt Collection Practices and State Consumer Protection.
• Learn about the new practices available under Dodd Frank.
• Harnessing TILA and RESPA inside and outside bankruptcy court.
• Unconventional approaches stay one step ahead of servicer practices.
• Billing structures, methodologies, and practice accounting.
• Designing compensation programs that balance the needs of homeowners with the needs of your firm.  
• Never lose clients – Ongoing communications program that’s turn-key and educates clients so they become fans.
• Fee agreements – for contingency and hourly clients.
• Become part of a highly visible network of top foreclosure defense attorneys, and strategic partners.
• Communications strategies and tactics proven effective and unavailable anywhere else.

Making little or no money in foreclosure defense isn’t doing your clients any favors because you cannot be your best without it.  Marc Dann’s LAW PROFITS is not a pot of gold, or a winning lottery ticket, but it is a proven process and suite of best practices that makes a law practice profitable… essentially immediately.  It’s work, no question about it, but it’s important and gratifying work.

I wholeheartedly support Mar’c Dann’s LAW PROFITS initiative.  And I strongly urge all of the lawyers reading this to take action now by clicking the link below, so you can find out more about what his LAW PROFITS program for foreclosure defense and bankruptcy lawyers can do for you and your firm.  The FRAUDclosure crisis and its ancillary topics, I’m sorry to say, are going to be with us for a long time… a decade plus, if we’re lucky.  Longer if we’re not.  It’s time to settle in and start capitalizing on being one of the best at solving on of the worst case scenarios.

Click below to find out more about…

Marc Dann’s 

LAW PROFITS

Here’s what the California State Bar’s announcement said:

The State Bar will hold its annual hearings this month for the public or lawyers to make proposals or offer comments about attorney disciplinary procedures, attorney competency and admissions procedures.  The first hearing will begin at 10 a.m. Dec. 7 in the bar’s San Francisco offices at 180 Howard St. (fourth floor). The Los Angeles hearing is scheduled for 10 a.m. Dec. 13 at 1149 South Hill St. (seventh floor).

So… I appeared before the panel of attorneys to speak about how the State Bar has been handling SB 94 and how I believe the bar should be handling things related to the foreclosure crisis and lawyers representing homeowners who are seeking loan modifications.  On the panel were attorneys Lowell Carruth, Colin Wong, Randall Difuntorum and the new OCTC, Jayne Kim.

Off the record, I was told by the others in attendance that… “I killed it.”

I began by offering some of the most current foreclosure crisis statistics for the State of California, as follows:

• 1.2  million  foreclosures  statewide  since  2008… the  number  is expected to exceed 2 million  by  the  end  of  2012.
• California is the hardest  hit  of  ALL  fifty  states, one in every five foreclosures in the US is in California.
• The 2 million  foreclosures  expected  through  2012  are  estimated  to  cost  homeowners,  property   taxes,  and  local  governments  $650  billion  statewide.
• Roughly half of  California homeowners with a mortgage owe more on their  mortgages than their  homes are worth.

Then I broke out some Los Angeles’ foreclosure statistics:

• Foreclosures hurt all homeowners:  In the aggregate, LA  homeowners  will lose at least $80  billion in home value, directly attributable to 200,000 foreclosures 2008-­‐2012.
• Foreclosures destroy the property tax base: Property tax revenue losses estimated at $481 million in the wake of foreclosure crisis.
• Foreclosures cost local  governments:  The typical foreclosure costs local governments more  than $19,229 for  increased costs of safety inspections, police and fire calls, and trash removal, and maintenance.    In Los Angeles,  theses costs are estimated to be $1.2 billion.
• Foreclosures undermine economic recovery and cost jobs: Los Angeles has 79,029  homeowners underwater by  $7.3 billion. If banks wrote down those mortgages, it could mean $780 million into local economy and spur 11,353  jobs.

I spent a little time acknowledging how we all got here, and recognized the thinking behind SB 94… that it was based on what we knew then… and made the overriding point that we owed the people of California a more thoughtful response to the crisis because we know much more today than we did then.

I also explained that the numbers of homeowners in foreclosure, combined with the well-publicized abuses committed by mortgage servicers, combine to make it very clear that we need our lawyers to get through this crisis, and without theose lawyers representing distressed homeowners we are certain to experience a much deeper and longer lasting economic downturn.  I don’t believe there should be any question about that, at this point, and those that disagree either simply lack the knowledge to understand the dynamics involved… or they’re selling something.

Consider that as of today, we have 2,000,000 homeowners in foreclosure.  Forty percent of those have not made a payment on their mortgage in over two years… 70% haven’t made a payment in over a year, making them ineligible for a loan modification if their loan is owned by Fannie or Freddie.

If each homeowner required just ten hours of assistance, that would mean 20,000,000 man hours of assistance time, and assuming 260 workdays per year, and a very efficient process, that’s roughly 12,820 years.  If we had 1,000 people trained and ready to go, we’d work through that number of homeowners in 12.8 years.  Of course, more homeowners would join the ranks during that time, and we don’t have 1,000 trained people assisting homeowners, or any sort of efficient system.

And it’s worth saying that even if we had 10,000 people trained and ready to go, without the efficient system, we’d never even be able to get through that number of homeowners in 1.2 years, and even that would mean an additional 400,000 added to the pool as the original 2,000,000 were being processed.

Now, let’s understand something else about the scale of the problem.  Over the last three years we’ve accomplished nothing, except that we’ve foreclosed on 1.2 million California homes, and allowed housing prices to go into a free fall.  What do you suppose will happen as unemployment continues to increase?  What will happen once interest rates rise?  And at the current pace of home sales, the shadow inventory, which consists of REOs not on the market, is going to be around for a long time… and we’re not just talking about the lower income areas anymore.

For example, according to DrHousingBubble.com, 142 homes in Beverly Hills have the following:

-A notice of default filed

-Scheduled for auction

-Bank owned

Interestingly enough only SIX homes show up on the MLS search when you look for active Beverly Hills foreclosures.

I also spoke to the members of the panel about the need for the State Bar to give more careful consideration to how it can better support the legitimate and ethical attorneys that could provide representation to homeowners in need of assistance, and I informed them that I am about to submit a formal proposal for how this might work to the new Bar president, Jon Streeter.

I have to say that I was encouraged that all of the panel members seemed to be very attentive as I spoke, and I plan to schedule a meeting with Jayne Kim and State Bar CEO, Howard Dunn in the next few weeks to continue discussing ways to improve the current situation.  I think it’s safe to say that it could not get any worse, so I guess I can say that I remain optimistic.

If you’re a California attorney and have any questions or comments, feel free to get in touch by emailing me at mandelman@mac.com.

Mandelman out.

WHAT’S THE DEAL WITH INVESTORS?  WHO ARE THEY?
ARE THEY LOSING MONEY ON FORECLOSURES?

What do the investors think about all these foreclosures?

What’s the relationship like between investors and servicers?

Do investors want to modify loans?

Do investors ever stop servicers from approving loan modifications?

Why don’t investors get more involved in this mess?

IF YOU’VE ASKED THESE QUESTIONS, HERE’S YOUR CHANCE TO GET ANSWERS!

Attorney Talcott Franklin knows mortgage-backed securities inside and out.  He should… his firm, Talcott Franklin P.C. whose main offices are in Dallas, in dollar terms represents more than half of all the investors in mortgage-backed securities on the planet.  Tal’s the co-author of the “Mortgage and Asset-backed Securities Litigation Handbook,” and he’s a very experienced and highly sophisticated litigator.

What makes Tal a pleasure to talk to, however, is that he makes a very complex subject very easy to understand… in fact, every time I talk to him, I feel like come away smarter.  Actually, the very first time Tal and I spoke, it was very clear that we couldn’t be more in-sync as to our views on the economy… where it’s headed and why.

Tal sees the foreclosure crisis essentially the same way I do, which I found interesting right from the start because he represents the other side of the foreclosure coin… the investor side.  And because of his knowledge and perspective you’re going to find listening to what he has to say absolutely fascinating.

You know how servicers are always saying “the investor says no,” when they want to deny a loan modification… well, Tal explains why that simply isn’t true.  And he walks us through the securitization process in a way that you’re likely to remember forever.  And you’ll learn all sorts of other things you did not know.  I’m telling you, you’re going to love spending an hour with Talcott Franklin on this, A Mandelman Matters Podcast.

The podcast is available in two versions… MP4 and MP3.  The MP4 version includes a couple of slides that show diagrams of the basic securitization process, but the MP4 format may not play on some computers.  The MP3 version is audio only, and should play on most any computer.  Most listeners will have no trouble following along either way.

So, turn up the volume on your speakers, and click the MP4 or MP3 version.  I loved recoding this podcast.  If you want to know more about the foreclosure crisis, you’re about to learn from an expert on the other side of the foreclosures, the investor side… it doesn’t get any better than this!

CLICK HERE TO PLAY THE ENHANCED MP4 VERSION

… INCLUDES SLIDES ON SECURITIZATION

OR

CLICK HERE TO PLAY THE MP3 VERSION

Mandelman out.

Well, that’s a pretty safe statement, but when?

The San Francisco Chronicle is at least beginning to wake up to the fact that foreclosures are quite the problem in California.  Yesterday, on page A-13, appeared the headline: “Foreclosure relief is key to economic recovery,” thus making me into a monkey’s uncle as promised.

It’s kind of funny, because it’s an editorial that’s not written by anybody specific, lest it offend I suppose, but it kicks off sounding like it could have been written by me… back in 2008… if I was trying not to scare anyone too much.  But no worries… better 3-4 years late to a party than never showing up at all… I guess.  Here’s how it opens…

“No economic recovery will take hold without serious attention paid to home foreclosures. Consumer spending, the job-heavy construction industry and bank stability hang in the balance.”

Of course, economics is one of those knee-bone-connected-to-the-ankle-bone sort of subjects, so would anyone like me to explain what hangs in the balance once consumer spending, construction jobs, and bank stability are achieved?  Hmmm… I don’t want to get too technical here… oh wait, I know… how about: EVERYTHING ELSE.

Apparently, this past week, the sound of the economy’s ship going down must have awoken the majority of House Democrats from California who then just jumped all over the Obama Administration for “failing to deliver on promises to curb foreclosures.”

The Chronicle said the California Dems frustration was over “banks’ recalcitrance and the White House’s timidity to act.”

The bank’s recalcitrance?  Gee, that sounds awfully harsh… I would have gone with the “bank’s obduracy.”  Yeah, that really says it better, don’t you think?  Much stronger.  I mean, if you’re going to go after the banks for their behavior, why mince words?  I don’t know about you, but when I’ve got someone rubbing my nose in poo, I don’t cower or retreat, I don’t beat around the bush either… I come right out and call them “obdurate,” as I’m sure you would as well.

Recalcitrance sounds like a health drink my grandmother used to require once a day… “Time for my daily recalcitrance, Martin… boil the water, would you be a dear?”  Want a synonym for “recalcitrance?”  How about: disobedience, insubordination, mutiny, noncooperation, resistance, defiance… any of those working any better for you?  Well, I’m glad I could help.

As to the White House’s “timidity,” well, heck… it’s become legendary.  Just so you have some idea of just how timid he is in my mind… I was having this dream the other night.  I was in a bar in Chicago and all of a sudden Barack and Michelle Obama come walking in… he’s not the president or anything, just a regular couple from Chicago.  So, next thing that happens we get into a heated argument, and I can’t recall what it was about exactly but he was getting all mouthy… so, I slugged Michelle right in the mouth.

(I’m kidding, Mr. Secret Service Man, I’m a kidder… ask anyone… I kid.)

Besides, in my dream I just yelled, “SCAT!” real loud, and he ran to his car and took off.   Then Michelle and I had a few drinks and ended up going back to my hotel room, and… well, never mind about that.

(Kidding again… really, I’m just kidding.)

The San Francisco Chronicle says that “the president has thrown the kitchen sink at the country’s sagging economy,” and I have to admit that I did not know that.  The newspaper says he’s also thrown “a stimulus package, a bank bailout plan and tax relief,” and I’d heard about those, but the kitchen sink thing was news to me.

Just as seems to be the case with every other media outlet, politician, and administration staffer in the country, the Chronicle seemed surprised that after the stimulus, the bank bailout plan and whatever tax relief the S.F. paper is talking about, “the nation’s financial pulse hasn’t picked up.”

Why do people think those things lead to the picking up of our national pulse?  I mean, someone needs to walk me through the thinking in play there… real slow, because I’m not getting it.

I mean, the bank bailout plan couldn’t make the economy recover, because for an economy to recover, money has to actually go into it, not just into the pockets of 13 bankers.  And the stimulus spending did help the economy in some ways, it’s just that when you’re in a hole 1,000 feet deep, and someone throws you down a12-foot ladder, you don’t exactly pop out at the top.

So, the Chronicle’s anonymous editorial writer for some reason has now reached the conclusion that the economy “won’t get better without a thorough response to home foreclosures.”

Perhaps the Chronicle was responding to the new numbers included in the editorial, which indicate that 2.2 million homeowners in California are “underwater.”   Also mentioned was that on top ten list of cities with the most foreclosures, eight are in California… and a couple years back there were only five on that list, points out the Chronicle’s editorial.

I don’t understand how those two statistics could make the newspaper do something it hasn’t done in the last three years since the crisis began… you know, come right out and say that it’s fix foreclosures or we’re done… after all, those number aren’t even the worst ones I could throw at them.

The Chronicle does point out that the administration couldn’t even get an insipid little jobs bill passed, and it contained tax cuts, which are normally like red meat to Republicans.  They say the president “faces a near-impossible challenge in winning bipartisan support.” Near –impossible?  Okay, as in it would be “near-impossible” for me to get Donald Trump to shine my shoes for the next year during primetime, that kind of near-impossible?

The newspaper says that the White House should instead “use its administrative muscle to tap banking and consumer regulations on the books.” And I have no idea what that means, but it’s okay, I’m fine with that… tap away, by all means.

The newspaper then seems to say that by tapping regulations on the books, as described above, there will be changes that will allow people to get new loans.  Here’s the paragraph in its entirety:

“This reality should lead the White House to use its administrative muscle to tap banking and consumer regulations on the books. These changes include allowing jeopardized homeowners to obtain new loans – now at historically low rates in the 4 percent range – to replace older, budget-crushing mortgages. This change alone would keep more families in their homes and give households extra cash to spend, multiplying the benefits.”

Now, I really haven’t the foggiest idea of what they’re talking about, but if it has anything to do with the president’s “new” refinancing initiative, and I’m pretty sure it does… then it won’t work, isn’t working, and never had a shot at working.  It’s a stupid idea that’s proof positive that no one involved knows what their doing.

It’s a broken HARP, get it?

When Obama announced the Making Home Affordable program in February of 2009, there were two components: HAMP and HARP.  HAMP is the Home Affordable Modification Program and HARP is the Home Affordable Refinancing Program.  Neither has come anywhere close to reaching its intended objectives, nor has either made any significant contribution to mitigating the damage being caused by foreclosures.

HARP was not designed to have anything to do with foreclosures, it’s purely a refinancing program that was to put extra cash in someone’s pocket in the hopes that the money will be spent, thus stimulating the economy.  Even if the program were to have worked flawlessly as designed, its capacity to help the economy would be limited… and by limited I do mean miniscule.

HARP was designed to allow someone to refinance their mortgage even though they didn’t have adequate equity for a conventional loan.  If memory serves, initially a borrower could owe 115% of their home’s value, and some months after that they increased it to 125%, I believe.  All of this was fine for a very small number of homeowners, certainly not those that were more seriously underwater, and none were at risk of foreclosure.

Since then, rates have remained low, so those that could refinance have refinanced.  Trying to create a program that attempts to allow further refinancing in order to stimulate the economy is going to be about as effective as removing sand from the beach with a teaspoon.  The fact that President Obama even brought up the idea during his last speech on job creation is evidence that the administration simply doesn’t know what to do about foreclosures.

So, let me be very clear about this in the hopes that the Chronicle will learn something:

1. If by “jeopardized homeowners,” you mean those at risk of foreclosure, then they cannot refinance.  They’re too far underwater and don’t have anywhere near the credit score required to so, even if they were not as far underwater.

2. The people that have “budget-crushing mortgages” can’t refinance… period.  They’re the ones that we’ve been screwing around with for the last two years over loan modifications.

3. And even if you’re talking about the small number of homeowners that do still have equity and would qualify for a loan, there are nowhere enough of them to stimulate Santa Cruz, and the ones there are have already refi’d at low rates so their potential cash savings is going to be too small to affect anything.

The Chronicle does admit that banks have been treating homeowners applying for loan modifications “roughly by losing documents, demanding endless paperwork and rejecting good-faith loan requests.”

Well, the banks have been doing a whole heck of a lot more than that to homeowners applying for loan modifications, but at least it’s a start.  The Chronicle does have four words to say about the subject: “These abuses should stop.”

Oooh, snap! Now, that’s really sticking it too them.  No wonder the editorial was anonymous.

Lastly, the newspaper brings up the idea of reducing the balance owed by the borrower, and acknowledges that it’s not an idea favored by the banks.  But the writer of the editorial says that if the bank can’t collect it “kicks the loan to federal guarantee agencies such as Fannie Mae or Freddie Mac. That means taxpayers foot the bill.”

I know… it’s not always the case, but leave them alone, they’re on a roll.

Here’s how the Chronicle takes on the 800-pound gorilla that’s been in the room all along:

“For many homeowners not swept up in the housing and loan bubble of four years ago, it’s easy to blame the problem on profligate banks or irresponsible homebuyers. Why worry about these people?

Here’s why: The country’s economic problems won’t get better without a serious plan to clean up the foreclosure mess. Taxpayers will stay on the hook for ever greater bills as property taxes drop away, weak banks hold back on new loans, and federal agencies are stuck with the bill.”

One Question: Is it “easy to blame the problem on irresponsible homebuyers?” Or is it stupid to blame the problem on irresponsible homebuyers.  Well, I suppose it’s both.  It’s “easy,” because learning about what actually happened to cause the foreclosure crisis does take some time and effort, so I guess it is comparatively easy to remain ignorant.

By the way, if you still think that the foreclosure crisis was the fault of irresponsible homeowners, you might try this on for size: Think it was the borrowers? Think again. And there’s lots more where that came from.

Conclusion…

Look, it’s great to see the San Francisco Chronicle coming around to understanding the situation… but I have to say that it wasn’t unexpected.  During the early years of the Great Depression, newspaper editorials were very similar to those seen during the last three years.  It’s interesting to note that back then the press didn’t start understanding the nature of the economic crisis until right around 1932.

Until then, most believed that recovery was only a year or two away at most.  In 1930 and 1931, according to accounts of Benjamin Roth in his “Great Depression Diary,” several article headlines in the Chicago Tribune proclaimed that “now was a good time to buy.”

And as far as placing the blame for the economic crisis of the 1930s on the bankers, well that didn’t happen right away either.  It wasn’t until 1933, five years into the Great Depression that the Senate committee hearings, led by Ferdinand Pecora probed the causes of the Wall Street Crash of 1929, and resulted in the major reforms to our nation’s financial system.

So, maybe the San Francisco Chronicle isn’t late to foreclosure crisis after all.  Maybe it just takes the time it takes for societies to come to terms with what’s happening during times of great change and economic upheaval.

If you’ve been with me for a while now, reading me as I bang the drum to stop foreclosures while I’ve banged my head against the proverbial wall, then I’m here to tell you that now isn’t the time to give up or slow down, now is the time to turn up the volume, work with the states to help design solutions that will bring an end to the crisis.

Because the Chronicle is correct in its assertion that: “No economic recovery will take hold without serious attention paid to home foreclosures.”

In fact, now that I think about it, I could not have said it any better myself.

Mandelman out.

1. Obama Leaps Into Action on Foreclosures – Happy days now right around corner.

NBC is reporting that, four years into the foreclosure crisis, and having failed at every single turn in the road, the government will now be hosting a hotline to provide financial advice to homeowners facing foreclosure.  And I think we can all agree that this is the news for which we’ve all been waiting.

It’s being called… ready for this… “The Hope Line,” and had I not learned of that moniker, I might have just let this story go.  It’s tiring to just keep beating up on stupidity, as I’m sure my readers understand.

But I did learn they were calling it “The Hope Line,” and it’s the brainless child of HUD Secretary, Shaun Donovan… he’s the member of the Obama Administration that looks like an aging Howdy Doody… to me, anyway.  According to Donovan…

“Everybody in a neighborhood loses value on their home when a home is foreclosed.”

No kidding, is that right?  Well, then someone should do something about the four million foreclosures that happen each year in this country.

Have you had enough yet? Is this bothering anyone else but me… no, bothering isn’t the right word… is this making you want to kick the crap out of a squirrel?   Are you choking back a scream of such proportion that were you to let it out, you think it might be heard throughout eternity?

Well, I simply can’t take it another second… Shaun Donovan you are an unbelievably insensitive, ignorant and incompetent jackass.  And I’d forgive you all of that, if you’d just shut up and stop treating me like I’m a four year old.

A “hotline” called the “Hope Line” to provide financial advice to homeowners facing foreclosure?  It’s almost 2012, Shaun… you’ve done NOTHING right since you took over HUD.  Are you f#@king kidding me?  I really don’t know what to say except that I can’t remember the last time I wanted to break someone’s fingers so badly.

What are you thinking your “hotline” might do for homeowners, Shaun?  Save the day?  Direct callers to their servicer?  Offer to connect the homeowner with a HUD counselor?  And check this out… for homeowners who prefer a face-to-face waste of time, Donovan suggests homeowners call “the local law school where students need the experience to get a degree.”

What kind of degree does one hope to get by talking to a homeowner at risk of foreclosure, Shaun?  Is that how you think one gets a law degree?  What the hell are you even talking about?  What happened to “YOU DON’T NEED A LAWYER… JUST CALL YOUR BANK DIRECTLY, OR CALL A HUD COUNSELOR?”

Now, you’re saying homeowners could use a lawyer, but your recommendation is that they seek out an aspiring or inexperienced one?  Shaun, I really have no idea what your problem is, but I’ll bet it’s difficult to pronounce.

NBC’s story also mentioned that this “hotline” is being rolled out “as Americans see foreclosures take another upswing.”

Another upswing?  That’s how you thought to phrase the concept of foreclosures skyrocketing last month?  Could you be any more offensive?  Stop by sometime… I’d like to give you an upswing.

You can reach the new homeowner hotline at 1-888-995-HOPE.  Go ahead and call… it’ll be fun, I’m sure.  Here’s a link to the article I wrote two years ago, the last time I called the government’s “Hope Line.”  It’s titled: “The Weather in India.”

Do you think I’m being too harsh, Shaun?  Okay, tell you what… I’ll start being nicer as soon as you start being smarter.

2. Nation’s poverty rate climbs to 15.1%, highest in 18 years.

According to the latest census data, more Americans fell below the poverty line last year.  The nation’s poverty rate rose to 15.1 percent in 2010, which is the highest level since 1993.  About 46.2 million people are considered to be in this group.

The government’s definition of poverty is income of $22,314 a year for a family of four and $11,139 for an individual.  And that’s not all the good news… in 2010 middle-class American families saw their income fall year over year, but the best part of that story is that median income has changed very little compared to consumer price increases over the last 30 years.

The middle-income family earns only 11% more than they did in 1980, while consumer prices have risen roughly 155 percent since then.  And that’s adjusted for inflation.  The figures were hardly surprising when you consider that the number of Americans unemployed over six months actually hit an all-time high during the year.
Yep, we’re having a recovery all right.  What… me worry?

3. Obama Says Government to Help Some Refinance… Again.

Again with the refinancing, Barack?  You really have no idea what you’re doing, do you?  Not a clue.  And you’re getting advice from some billionaire’s club of psychopathic capitalists who made money so you think they’re smart.  It’s really quite sad to watch.

Let me refresh your obviously failing memory.  It was February of 2009 when you first announced the whole refinancing thing.  Hardly anyone qualified for it, and the people who did were not those at risk of foreclosure, but it was a lovely sentiment, nonetheless, and we just ignored you and went about our lives battling the banksters.
It was supposed to help millions… and didn’t even get close… very much like HAMP, as a matter of fact.  The only thing the refinancing did was keep some mortgage brokers employed for a bit, and allow those senior citizens who did qualify to trim a few hundred from their monthly payment.

They used their monthly savings to pay off debt or they stuck it in the bank, but it certainly didn’t help the economy at all.

Then, you announced the same program again a year later… and the result was that you refi’d the same people you had refi’d the year before.  You didn’t stop a single foreclosure as a result of the refinancing, not even one.

And now… with your failure to mitigate the damage caused by Wall Street’s bankers and mortgage servicers widely understood, you thought it a good idea to trot out the old refi responsible homeowners pitch again.  After all, it didn’t work last time, so why the heck not try it again… this time hoping for a different outcome.

Look, I’d explain this to you in more clear terms, but I don’t have any crayons with me, so let’s just say that you might want to consider hiring someone who can produce a new idea… even a bad one, as long as it’s new.

The last time mortgage rates for 30-year loans were lower was in 1951, Mr. President.  Yes, I said 1951.  And the 15-year rate of 3.33 percent was actually an all-time low.  But listen… shhhh… do you hear that?  No?  Why that’s the sound of all the “responsible homeowners” rushing out to take advantage of the low rates.

You see, there aren’t any “responsible homeowners,” Mr. President.  Half of homeowners today are underwater, if you take out states like North Dakota from the national averages, so they can’t refinance for that reason.  The other 50% just don’t have the 800 FICO scores you need to get a loan these days.

And whatever number is left is finding it impossible to save up the required 20% down payment, or if they have managed to save up the required down payment, they certainly aren’t interested in throwing it away on a house whose value is certain to continue falling like a stone.

No matter though… at least the 1500 people who can qualify will save another couple of Franklins each month.  Who knows… maybe they’ll use it to re-start our nation’s economy… in about 400 years.

4. Mortgage Defaults Skyrocket 33% Nationwide in a Single Month… 55% in California… 42% in New Jersey… Tsunami of foreclosures on its way…

Well, things are certainly looking up, wouldn’t you say?  I mean, when Obama says we’re having a recovery, he means… well, I don’t actually know what he means.

And I found it quite interesting that Bank of America alone, increased the number of default notices sent out by a reported 200% in August over the prior month.  That’s stunning, I think, and I’ll tell you why.
Bank of America has been whining since the foreclosure crisis began that it simply couldn’t keep up with the demand for loan modifications.  Fro==or three years BofA has been singing the same tune… we’re overwhelmed… feel sorry for us… we’re trying…

So, I have a question for Bank of America… why is it that the foreclosure side of your business is capable of a 200% increase in a single month, but after three years you still can’t show even a modicum of improvement as far as getting a mortgage modified for a homeowner at risk of foreclosure?

Don’t worry, that was rhetorical.  I know the answer.  It’s because you lie constantly about everything.  You could increase the number of loan modifications by 200% in a month too… you simply don’t want to.  You don’t care what foreclosures are doing to our nation’s economy… to our communities… to millions of families… to the lives of our children.  You don’t care about complying with laws or government programs.

You are the worst sort of corporate citizen, and it is my great hope that the people of this nation come to understand what you have done and never forgive you for it.

5. Gallup’s Economic Numbers Show No Recovery Since 2009.

The latest Gallup reports show that consumer spending in this country has remained essentially flat since falling through the floor in January of 2009.   Spending in retail stores including gas stations and restaurants has averaged $66 per day in 2011… in 2008 it averaged $96 per day.

Gallup also reported that 18.5% of American workers are underemployed… with 9.1% unemployed as of August 2011.  And those numbers, which are unchanged year over year, don’t include those unemployed over six months and presumed to no longer be looking for work.

And consumer confidence is right where it was at the depths of the depression, which the government pegs as being February of 2009.  Gallup says that 77% of Americans said our nation’s economy is getting worse in August of 2011… the highest percentage by far since then.

Yeppers… there’s no question about it… that’s change I can believe in, all right.

Mandelman out.

And please consider supporting the documentary I’m producing on the foreclosure crisis…

… because we can’t solve what we don’t understand in the first place.

CLICK HERE to watch the trailer.

Okay, get this… President Obama came out today with both guns blazing, endorsing the end of Saturday mail delivery at the United States Post Office.  Actually, we don’t really know that it’s Saturday that he favors cutting… maybe it’s Thursday, he didn’t actually say for sure which day he’s ready to do without the mail.

He probably left the day to be cut up in the air because he didn’t want to upset the Republicans.  Or, perhaps he thinks the selection of the day should be up to congress.  He’s a big picture guy… you know… let the legislature sort out the messy details.

I’ve been struggling with this issue for some time now, and I just can’t seem to reconcile how I feel.  For a while I was ready to throw my support behind Saturday, but then I started to like Tuesdays, and that led me to thinking about Fridays… it’s really quite overwhelming.

Rep. Darrell Issa (R-CA) was quick to point out the obvious, saying:

“… the president’s proposal is not what taxpayers or the Postal Service needs.”

Of course it’s not what the American taxpayers need, Darrell.  That goes without saying.  What is it that the American taxpayers need, by the way… I’m having trouble remembering.  Does it have something to do with the Post Office?

Issa went on to say that Obama’s plan would “certainly cost taxpayers money,” which must be some sort of reflex response because according to Associated Press, the Post Office currently “does not receive any tax funds for its operations,” and I can’t even imagine why closing one extra day a week would increase costs.

So, while all of this very important politicking was going on, there were apparently 75 members of congress calling on something called the “independent Postal Regulatory Commission” to do something to block the Post Office’s plans to shut down roughly 3,700 local post offices across the country.  That seems like a lot of Post Offices, doesn’t it?  Like… 74 per state, on average.

According to AP, it’s worth noting, “The proposed closures, most in rural locations that do little business, are currently under review.”  So, that’s good, right?  I mean, who cares about people in rural locations anyway?  They should move to the city like the rest of us.  They probably don’t even get much mail.

The 75 members of congress have written a letter calling for the establishment of what they refer to as a “new business model” for the P.O. “without closing offices and cutting its workforce.”

A new business model for the U.S. Post Office?  That sounds cool.  Like what, pray tell?  One that doesn’t close offices or leave workers without jobs… I can’t wait to hear about this.  I’m on pins and needles.  I may have to wait, however, because the letter from the members of congress neglected to mention anything specific about the new model.

Now that I think about it, however, in my home town we’ve got three Post Offices within five miles of each other and I suppose we could get by with one in that space… so, maybe it’s a good thing.  I’ll have to give it a bunch more thought… maybe take this whole week off and research the topic.

Senator Tom Carper (D-DE), also weighed in on this compelling topic, saying that it’s time for the administration and congress to “save the Postal Service and protect the more than seven million jobs that rely on it,” and honestly that really confused the heck out of me.  I mean, if we shut down the two extra Post Offices in my neighborhood how would we save all of the jobs involved?

See, I think this is a big part of the problem in this country… we’ve gotten stupid… okay, maybe that’s too harsh… how about we’ve lost our critical thinking skills.  We think we can cut the unnecessary spending out of the Post Office, but save the seven million associated jobs.

Here’s an idea… how about we cut the unnecessary fat and hire the resulting displaced workers to… hmmm… I’m not sure… maybe we could give them moving expenses on the condition they all move to Mexico?  I don’t know… I’m just thinking out loud here.

Now, I’m no postal expert.  Sure, I’ve bought a few stamps in my lifetime… shipped a package here and there.  But, the fact is that the Post Office is used less than it has been in the past.  Partially, that’s due to the Internet, electronic bill paying and the like.  And our economic downturn has reduced the amount of bulk mail.  So… all told… it’s not all that hard to see that we use and need less Post Office than in the past.

Obviously, Obama has been hard at work on this very important subject, and I think we have to give credit where credit is due.  And he’s got more ideas than just cutting a day of mail delivery, oh yes he most certainly does.  He’s also agreed that the nearly $7 billion that the Post Office has apparently overpaid to the federal retirement system should be refunded to the agency, which sounds like a good idea too.  Overpaying does suck, after all, and I think everyone can agree on that point.

Obama also said that he thinks the Post Office’s advance funding of retiree medical benefits should be restructured and that the P.O. should be allowed to sell “non-postal products,” and raise postage rates.

I don’t know what he’s talking about when it comes to restructuring advance funding of retiree medical benefits, but I don’t think I’d be opposed to the agency selling “non-postal products.”  Like maybe a really hip line of clothing would be cool… I might throw down a fifty for a pair of those very dapper grey-blue slacks my letter carrier often wears.  And lately I’ve seen some fairly snazzy vests with the USPO logo.

Or, maybe they could sell those little Jeep-like cars with the steering wheel on the wrong side.  I don’t know how much they cost or why I’d want one, but why not start offering them to the Brits?  They drive on the wrong side of the road so the whole steering wheel on the wrong side thing wouldn’t be an issue.

And by all means… raise the postage rates… raise away.  How much is a stamp now anyway.  I couldn’t even guess.  The last time I bought one was like in 1982.  And whatever Bulk Rate postage is, increase it by all means.   Less junk mail would be the likely result of such an increase, and that doesn’t seem like a bad thing.  In fact, while they’re at it… up the taxes on telemarketing companies too… we could use less of that crap too.

I have to say how relieved I am that Obama is on the job as far as this obviously mission critical issue is concerned.  And I’m grateful that the president has brought this issue to my attention because I’m ashamed to say that I was not nearly as focused on the whole Post Office thing as I quite obviously should have been.

You know, I consider myself a reasonably intelligent, politically active, and socially aware individual and it’s been sobering to discover that I have been entirely overlooking such a nationally important issue, while I’ve been frivolously fettering about worrying about such things as our economy’s deflationary collapse and the foreclosure crisis that continues to destroy the lives of millions of Americans.

It’s the Post Office, people… that’s where our attention needs to be focused… the Post Office.  Let’s go postal people… that’s the ticket.

Maybe I’ve been too hard on President Obama.  I’ve been criticizing his administration for ostensibly ignoring America’s homeowners while shoveling money at the very bankers who created our economic nightmare, but now I see clearly that I’ve been taking a far too cursory view of the issues this country is facing.  And now I see that President Obama is actually on top of things… I mean, you need look no further than this Post Office situation.

Cut one day of mail delivery… it’s brilliant!  Refund overpayments… of course!  There’s the Obama I voted for… the smart president.  And here I thought he was asleep at the switch and now I see clearly that I’ve been wrong… and it looks like the Post Office crisis is well on its way to being solved.

The Post Office… TPC… who would have ever thunk it?

Obama in 2012!

Mandelman out.

And please consider supporting the documentary I’m producing on the foreclosure crisis…

… because we can’t solve what we don’t understand in the first place.

CLICK HERE to watch the trailer.

If I have to introduce Alabama foreclosure defense attorney Nick Wooten to you, then you’re not much of a foreclosure crisis news junkie, because Nick has made headlines for his lawsuits against the banksters on behalf of homeowners as much as anyone, and a lot more than most.  Most recently Nick was kicking the crap out of LPS or Lender Processing Services, but he’s also leading a coordinated attack against MERS, and recently he won a very high profile case in Alabama, Horace v. LaSalle Bank, in which the judge agreed with his argument that the note was not properly endorsed and negotiated into the trust and therefore the trust could not foreclose.

According to Nick, Judge Albert Johnson had recently been assigned to learn a great deal about securitization so he could deal with an unrelated matter having to do with a defaulting bond, so he knew a lot more than today’s judges, and in addition, the Pooling and Servicing Agreement in the case was very specific, which made it easier to establish that its rules were not followed.  According to the judge’s order… ”… the endorsement chain … does not comply with that required by the PSA.”   He granted summary judgement and permanently enjoined LaSalle from foreclosing on the property.

Nick has been suing LPS for something like three years now, mostly for their illegal fee splitting scheme with foreclosure mill lawyers, and LPS has been on the ropes for some time.  Personally, my money’s on Wooten… I’m hoping for a KO, but I’ll take the technical decision… either way, LPS is not getting away from Nick without taking some fatal blows.

Nick is a graduate of Max Gardner’s Boot Camp… a star pupil to be sure.  I’ve gotten to know Nick over the last couple of years and he’s flat out one of my favorite people on the planet.  We’ve been talking about doing a podcast for a few months now, but between his schedule and mine, it wasn’t easy.  But, I caught up with him late the other night, around 11:00 PM his time… he was in New York City at a hotel and meeting with a group of investors… potential clients… the next day.  By the time we hung up, it was almost 2:00 AM… and I’d tell you what he is planning to sue a servicer for, but its on the podcast and he’s so much fun to listen to, I’d only spoil it.  I will tell you this… I bet you haven’t heard about it before…

OH, ONE MORE THING… This podcast is rated:

There’s nothing really bad in it, just a small amount of off-color language, the ‘F’ word is used once, but is said softly at a very appropriate moment, so I can’t imagine it would offend anyone.  But, just in case… if that would offend you… well, you have been warned.

Okay, enough small talk… click ‘PLAY” and get ready for a Mandelman Matters Podcast with Attorney Nick Wooten!

And a huge hat tip to MM reader, Jake, for sending in this index to the podcast.

3:15….Intro…The Discovery of Foreclosure Defense

7:15….”You didn’t make your payment” vs. “The Gospel of the Free House”

16:00….The Foreclosure Cartel

22:00….Theft for Profit in a Broken System

34:00….The Tranche Scam and Securitization Fail

42:00….The Great Economic Reality Disconnect

46:30…..Target LPS and the Declaration of War

56:00…..The Risks of the Uncertainty of Title Integrity

1:01:00….Recent Court Decisions…Are things getting better?

1:20:00…Social Costs, Client Demographics, and the Political Overview

Mandelman out.

If you’re a regular or even occasional reader of Mandelman Matters, you’re reading this now… and waiting for the twist or the punch line, right?  You’re thinking… “Oh yeah right… I know him… what’s he saying by saying he doesn’t care about his readers?  Okay, you hooked me in… now tell me what you’re talking about.”

But, it’s not like that… sorry to disappoint you… I’ve recently realized that I actually don’t care about my readers.  You read me all the time?  So what?  It’s not like I get a nickel a reader, or anything like that… so read me… read something else, I could care less.

I used to care about my readers but, truth be told, this past week leading up to today, something happened that changed me… and I think you all have the right to know what it was that has caused me to think this way.

You see… today, Dina and Robert Giangregorio of Huntington Beach, California received their permanent loan modification from Ocwen Loan Servicing.  Do you remember them?  I wrote about them last week… three kids… Robert has “Primary Progressive Multiple Sclerosis, one of the worst types of MS one can have.  He only has use of one of his arms and he’s in a wheelchair.  The headline to the story I wrote about them was: “Ocwen Loan Servicing Takes Home from Handicapped Because There’s Equity.”

Now do you remember?  If not, you’d better click that link and read the article before going on or the rest of this article won’t make nearly as much sense.  Like missing “Part One” of something and then trying to just dive in at “Part Two.”  It’s never the same as if you had seen the first one.

So, yes… Ocwen sent the Giangregorio’s the documents for their permanent loan modification today, and as you might imagine… they were way beyond pleased… in fact, it’s safe to say that they were overwhelmed.  Dina sent me an email right after she heard… all it said was:

“Martin!!  I am crying. Words cannot express…”

I understood.  I felt the same way, but not for the same reason.

I emailed her back maybe 15 minutes after they learned of the great news and asked her to call me.  I wanted to ask if they would be interviewed on camera for a documentary on the foreclosure crisis that I’m filming this summer.

Dina emailed me back right away… she said she needed time to compose herself… calm down a bit… before she could call me.  Like I said, they were quite happy that after living through a sale date for their home last Monday, they would not be moving any time soon after all.  Quite a relief, I’d imagine.

So, a few minutes later she and Robert called… I was on the speakerphone and as one might expect, they were both thanking me for helping them save their home.  Dina told me that she felt as if a cloud had been lifted… I said I understood, even though for me… that cloud was still there.

I said they were welcome and not to give it another thought.  Besides, as I told them… I was only a part of it… there were lots of others involved, and those others were really the ones who deserve the credit for making this happen.  First of all, CDA Law in Mission Viejo, who are true stars of the loan modification world, jumped in against all odds to represent Dina and Robert and really were the technical experts here, and Julie Greenfield, who is the absolute top of the food chain when it comes to loan modifications, also volunteered to help push the ball over the line. (Both CDA and Julie can be found on my Trusted Attorney list.)

All I did was write about it… it was the others who took action and made Ocwen take notice… they weren’t just “my readers”… they were my “DOERS,” and how I feel about them… well, I think Dina said it best when she said… “Words cannot express…”

It had all started a little over a week ago… my wife had just picked me up from the airport.  I had just flown in from Hawaii after meeting with members of the state legislature on issues related to the foreclosure crisis.  I wrote their story the following day, I believe.  It was hard to write, because it made me angry and sad.

And then, after wiping away a few tears and swearing like a drunk pissed off sailor… down at the very bottom of their article, after I typed “Mandelman out,” I gave out the email address and phone number of Ocwen’s Executive Chairman, and said:

“Want to send Mr. Erbey a note to share your thoughts on the Giangregorio’s situation… Well, by all means… be my guest…”

It wasn’t even 15 minutes later that I received an email… I was being cc’d on an email sent to Ocwen’s Executive Chairman by someone who I had thought was just a “reader,” but now I saw was a “DOER.”  I wrote back to her right away, thanking her for doing what she had done.

Minutes later another email… same thing… another DOER was cc’ing me on another email to Ocwen’s Executive Chairman.  And then another came in before I could even send another thank you note in response… and then another… and another… and yet another.  Some of my readers were DOERS and they had read my article and done something about it.

That went on for a few days.

Then I received an email from a senior executive at Ocwen’s Washington D.C. office.  He was responding to an email that I had sent him before I posted the Giangregorio’s story, telling him that I was about to run the story and giving him a chance to comment.  I wasn’t expecting to hear back from anyone… I do it all the time before I go after a banker or servicer or government boob… it seems like the journalist-sort-of-thing to do, right?  But no one ever responds.

Here’s what Ocwen’s senior exec said in his email to me:

Martin,

Your email was forwarded to me but I have been traveling and didn’t see
it until yesterday.  I apologize for not getting back sooner.

I understand the Giangregorious story has been posted, but would like to
discuss the situation with you if possible. We’ve actually worked very
hard on this case, are saddened by it and will continue to do what we
can. We have not foreclosed and will continue to try to assist the
family within our legal constraints. I can assure you that our
commitment to helping distressed homeowners keep their homes with
sustainable payment plans is genuine — it is also very much consistent
with our own business interests.  Since the outset of the mortgage
crisis, we’ve worked out solutions for over 100,000 families to avoid
foreclosure and are recognized as the industry’s loan modification
leader.

But, again, I think it would be worthwhile to talk…would there be a
time say later this afternoon or anytime this week for a call?

Thank you…

And then he signed it.

I emailed him back and within an hour or so we were talking on the phone.  It was later in the afternoon on the Friday before July 4^th weekend, and with him being in D.C. I didn’t expect the call to last very long… but it did…  at least a couple of hours… it was after 7:00 PM East Coast time when we hung up, resolving to talk again after the holiday.

I had expected him to be a nice guy… and he was… but, he was also very smart and we talked about the financial and foreclosure crises in the big picture sense, going back to examine all of the many different factors that led to the meltdown.  He knew some “insider” sort of things that I hadn’t known, and I knew some stuff that he was interested to hear about.

I liked him, and I had not expected that to be the case.  As he phrased it… we were in “violent agreement” on just about every single issue we discussed.  He said he’d send me an article he’d written a couple of years back on loan modifications and the foreclosure crisis, and I said I’d send him links to a couple of hundred articles that I’d written on the subject.

After we hung up, I had two thoughts come immediately to mind:

1. Wow… maybe he and I can make something happen here… start something that other servicers would see as a success, and then follow.  I felt the same way about what had happened in Hawaii… maybe, just maybe… I was gaining on it.  And…
2. OMG… If April Charney and Max Gardner find out that I liked the guy, and that I could possibly work with him on something… they’ll kill me.  To say nothing of what my “readers” would think if I said something positive about Ocwen.  Someone could have a heart attack.

Well, I’m going to be talking with Ocwen some more… I did genuinely like the guy, so why not?  Someone has got to show those on the other side what’s going on from the homeowner’s perspective, and after writing 500 articles on the subject and talking to thousands of homeowners over the last couple of years… it might as well be me.

Also, just as I had posited to myself while sitting in a meeting in Rep. Herkes office in the Hawaii State Capitol building… if I wasn’t here, who would be… to which I answered what was the obvious truth of the matter… NO ONE.  There simply wasn’t anyone else, which made me wonder if perhaps I was insane, for a couple of seconds anyway.

So, now it looks like I might be visiting with members of other state legislatures as well.  I might even go to Florida and Atlanta to visit Ocwen and see what they’re doing down there…. maybe make a stop in D.C. too.  And I decided I would do whatever I needed to in order to finish the documentary I’d been working on for over a year… I wasn’t sure how exactly, without my wife choking me to death in my sleep, but I decided that I had to figure out some way to get it done.

Because that’s what DOERS do… they DO THINGS… they get things DONE… important things.

So, you see… it’s been quite a learning experience this past week or two… although I think I worked 120 hours and missed two nights of sleep, which I can’t keep doing if I expect to be able to DO anything for very long.

As far as my “readers” go, however, well… they can keep reading me if they want… or not… I don’t really care because from now on, I’m going to be concentrating on my “DOERS.”  Together, we’re going to DO IMPORTANT THINGS and we’re going to finally bring this unconscionable travesty of justice they call the foreclosure crisis to an end.

And after that, we’re going to start to rebuild America’s working middle class, brick by brick.  And one day… perhaps sooner than you might think… this country will once again be a place in which I can know that my daughter’s life will be as wonderful as mine has been… before all this happened… before Wall Street took over and broke the world.

People have asked me numerous times over the last two or three years, why I do what I do… and how I can possibly hope to beat the bankers… and I’ve always replied the exact same way: Because I’m going to win, I assure them.  Some also ask me why I’m so passionate about this? And I always reply: Why aren’t you?

You see, when Dina said that she felt that a cloud had been lifted, I understood but I didn’t feel that way at all, because I knew when I hung up with Ocwen that first time that they would modify the Giangregorio’s loan.  But, although that would be great for the Giangregorio family, what about the thousands of others all over this country that I didn’t write about?   No one should lose a home if there’s a way for them to keep it.  Not one person… ever.

Dina and Robert sent me another email shortly after we spoke… it read:

“We cannot express our gratitude for taking such an interest and huge involvement in our situation.  We are in awe that we are actually finally being ‘heard’.”

They sent it to me, but it’s a message to all of my readers who are also DOERS.  You really did something here… and what you did is a big deal… huge.  I’m so proud of you… and thankful… you should be proud of yourselves too.  You made a real difference in the lives of many.

And the best part of the whole thing is that even if you’re weren’t a DOER this time around… even if until now you’ve just been a “reader,” it doesn’t matter… ANYONE CAN BECOME A DOER AT ANY MOMENT.

That’s right… even right now… this moment… you can transform yourself from being a useless “reader” to being a DOER of important things.  Just say to yourself… assuming no one is around because you don’t want to appear as if you’re talking to yourself…

Starting today… I’m a DOER!

What are we DOERS going to DO?  Well, we’re going to figure that out as we go.  Every week, I’m going to try to post an article under the heading: “THINGS TO DO… THAT MATTER.”  So, when you read that line, you’ll know that after you’ve read the article, there will be work that needs to be DONE… send an email… make a phone call… whatever it is… so, JUST DO IT.  (LOL, I just couldn’t help that.)

This is a game of inches… there are no magic bullets or big sweeping solutions, of that I am quite sure.  We need to hit singles, not home runs… and sure as shootin’ we’ll win this battle one day… little by little, step-by-step… one day at a time, as they say… (OMG, I think I just mixed enough metaphors and exploited enough clichés to cause myself physical harm.)

Warren Buffet told Bloomberg today that he predicts “Job Growth When Housing Rebounds.”  Genius… that man really is a genius… who would have ever thought that solving the foreclosure crisis was so important.  Hmmm… maybe I should write something about that point.  I’ll have to give it some thought.  Thanks for weighing in, Warren… we’ll let you go back to bed now.

Housing doesn’t “rebound” as long as the foreclosures continue unabated, in fact nothing “rebounds” unless someone first throws a ball.  We have to DO something to STOP the foreclosure crisis. It’s a forest fire and it will continue to burn until it runs out of forest.

Every time housing prices fall, more people go underwater on their loans.  And every time a homeowner goes underwater, they are removed from the real estate market because most of the people that buy homes are not first time buyers, they have to sell their old home before buying their new one.  But once underwater, they can’t, so demand for housing falls as more people find that they owe more than their home is worth.  And as demand falls, so does price… and that means even more people go underwater.

Once you’re underwater, any of life’s events can lead to foreclosure.  An illness… an accident… a divorce… the loss of a job… any of those can lead to a foreclosure when the homeowner is underwater.  The Giangregorio’s only fell two months behind and that almost led to them losing their home.

Foreclosures breed foreclosures… period.  In Hawaii, Rep. Herkes repeated the phrase several times to others, and I’m sure he’s said it quite a few more times since I was there.  He’s a DOER, by the way.

Okay, so that’s all for now… I just thought I’d let my readers know how I feel and why… and I had to give my DOERS the great news about the Giangregorios.  Again… thank you from the bottom of my heart.

Oh, and Dina and Robert both agreed to be filmed next week, and I’m really looking forward to that.

But, now I’m off to Palm Desert where my daughter is dancing in a national dance competition this weekend.  She goes every year.  It’ll be 125 degrees outside, which is miserable, but inside there’ll be 5,000 girls from 5-16 years old all screaming their heads off at the same time, as the Moms try to get them ready for their next number.  So, when you think about it… 125 degrees really isn’t even that hot… LOL.

Mandelman out.