Norma Garcia, Consumer Reports Magazine: Stupid is as Stupid Does


I grew up with Consumer Reports magazine.  In fact my father had received every issue ever published, including the annual guides, and we used their information as if it were the Gospel of major purchases.  I don’t think there was ever anything purchased in my parent’s home that didn’t meet with the approval of the Consumers Union, the publisher of Consumer Reports magazine.

I can remember being about 12 or 13, and wanting a new bicycle.  I remember pouring through the magazine to see what they thought of the models I liked as I prepared to argue my case in front of my family’s Supreme Court, where my dad sat as Chief Justice.  If Consumer Reports liked the bike I liked, I knew it would be like having an irrefutable expert witness in my corner.

Well, times sure do change, because just a few weeks ago, on September 18, 2009, a woman by the name of Norma Garcia, a “Senior Attorney” from the Consumers Union, according to the words appearing under her signature, wrote a letter to Governor Arnold Schwarzenegger.  Norma apparently felt compelled to write a letter to the Governor of California asking him to sign into law Assembly Bill 764 (“AB 764”), one of the two bills that claim to be motivated by the need to protect consumers from “scammers” who are defrauding untold numbers of homeowners by promising to help them obtain a loan modification.

AB 764 was the brainchild of Assembly Representative Pedro Nava, who chairs the Committee on Banking and Finance.  What a surprise to find that last part out, huh?  Among other things, the bill says that an attorney who represents a homeowner trying to obtain a loan modification from his or her lender or servicer can’t accept payment of any kind from that homeowner until the bank has approved the loan modification.

Now… getting a bank to approve a loan modification commonly takes six months or more, and it’s not at all uncommon for it to take almost a year.  Anyone that’s tried to get a loan modification knows this to be the case… and I do mean anyone.  So, AB 764 would mean that an attorney would have to work for six months to a year and then not be paid if the bank says no.  Does anyone think that lawyers will represent clients under that scenario?  I would certainly hope not, but if there’s any confusion, feel free to run the question by any attorney you happen upon.


Now, make no mistake about it, there’s absolutely no question in my mind that Norma has never personally attempted to obtain a loan modification, nor has she known anyone that’s attempted to obtain a loan modification.  And if that’s not irresponsible enough, I’d have to say that she’s never even Googled “loan modification,” how’s that.  She doesn’t say any of this in her letter to the governor, but how else could she make the inane statements she made?

That’s what makes Norma the most dangerous kind of attorney… the kind who doesn’t feel the need for personal knowledge or confirmed facts before voicing an opinion.  What she’s advocating would be harmful to homeowners in California to the point of being unconscionable.  Why would she say the things she said in her letter if she knew any better?  If Consumer Reports magazine is following her lead, DO NOT pay any attention when they review dishwashers, or the one you choose is likely to blow up your kitchen.


Here’s what Norma says about why Consumers Union supports AB 764:

“Consumers Union supports AB 764 because it will prohibit anyone from collecting any fee for modifying a mortgage loan until the terms of the loan have been modified.  This insures that legitimate providers can continue to offer their services and be compensated by those they can truly help, but that those who are simply offering loan modification services to collect fees with no hope of delivering are stopped.”

Okay, Norma… can I call you Norma?  I’d like to pose a couple of questions that I’m fairly sure you’ll decline to answer:

1. Do you know attorneys that can take on clients, work for six months or longer with no assurance of being paid?  It’s an obvious question, perhaps, but I’m just wondering.  If your answer is yes, please forward a listing of those licensed to practice in California, so I can publish their names on my blog and homeowners can start benefiting from their counsel immediately.

2. Are you familiar with the Obama Administration’s “report cards”?  The ones first published on August 9th, I believe?  The ones that show that Bank of America, the country’s largest mortgage holder, has modified just 4% of its eligible loans?  Wells Fargo… 6%?  Am I ringing any bells for you, Norma?  Assuming you are familiar with the report cards, have you made any connection with those statistics and the number of people who claim that an attorney failed to get their loan modified?  Who failed in that scenario, Norma?  Work with me here.

3. Do you understand why people get scammed?  It starts with the government telling everyone that they can just call their bank directly when they can’t.  Then they tell everyone that every firm offering to help is a scam, which is just silly and no one believes.  So, they try it themselves, and it doesn’t work.  And they call a nonprofit and it doesn’t get them anywhere either.  So, they start to panic, and because everyone’s a scam, they don’t know what to do or who to believe.  And when the panic gets intense enough, they write a check to whoever comes to the door.

If you want to get rid of scammers, you don’t reduce the number of legitimate helpers, you increase the number.  Want to get rid of bootleggers?  Put a liquor store on every corner.  No more bootleggers.  There are millions of homeowners that need help today… they can’t call their lender directly… and there aren’t enough nonprofits on the planet to help, even if they were effective, which they’re not.

Now you, and the Consumers Union… the people who are supposed to be looking out for the consumers… you want to support a bill that would make it impossible for a homeowner in distress to hire a lawyer… and you yourself are a lawyer?  Which province are you from, Comrade?  Are you high?  On crack?  Are you sure you’ve thought this through?


4. Are you aware that within the Treasury’s program there are numerous lenders or servicers that have been cited by judges or regulators for having engaged in improper behavior with customers?  And are you aware that the list includes: Select Portfolio Servicing Inc., a Utah-based company formerly known as Fairbanks Capital Corp.; Countrywide Home Loans Inc., now a unit of Bank of America Corp.; Carrington Mortgage Services LLC, based in California; Saxon Mortgage Services Inc., a unit of Morgan Stanley; EMC Mortgage Corp., now a subsidiary of J.P. Morgan Chase & Co.; and Green Tree Servicing, a Minnesota company?  Improper behavior, Norma.  They’ve screwed homeowners over in major, life-changing ways.  Is any of this starting to sound like lawyer-land, Norma?  Who do you recommend someone call when they get screwed over in a life changing way?  A plumber?  You’re killing me, over here.

5. Are you aware of the following quote made by Ocwen’s former account officer Ron Davis when testifying in a suit against Ocwen, one of Treasury’s participating companies: “We didn’t treat the people very well, but the money was pretty good,” stated Davis.  The motive, he said, was simple: force people into foreclosure as a way to earn higher bonuses.  “We would call the customers and ask them what bridge they were going to live under,” Davis testified.

And are you aware that Ocwen lost that lawsuit?  A Texas jury found that the company engaged in “fraudulent, deceptive, or misleading tactics” that it called “unconscionable.”  The case involved an elderly Texas woman the bank tried to evict from her home even after a local judge had ordered it not to. The jury awarded her $11.5 million.  And I’d venture to guess that she had a lawyer involved.


6. Are you familiar with the testimony of attorney Diane Thompson in front of the United States Senate?  She testified that: “Advocates for homeowners continue to report problems with implementation of the program.  Servicers are all too often refusing to do HAMP modifications, soliciting a waiver of homeowners’ rights to a HAMP review, and structuring offered modifications in ways that violate HAMP.”

I’m sure most homeowners would have no problem identifying the ways in which HAMP modifications should not be structured and I’m equally confident that most homeowners would scream bloody murder if someone solicited a waiver of their rights to a HAMP modification.  I couldn’t do any of those things, but I’m probably not a representative example.  I’m sure the average homeowner would do much better.

7. Are you familiar with the attorney in Michigan attempting to arrange a short sale with Litton who reported that the voice mail warns: “If you leave more than one message, you will be put at the end of the list of people we call back.”  Charming, absolutely charming.  A servicer who gets snarky with their voice mail greetings.  Fabulous.  That probably doesn’t frustrate hardly anyone.  (And yes, that’s how I wanted to phrase that.)

8. Are you aware that Diane Thompson also testified that “servicers serve investors, not borrowers,” and that “homeowners have few market mechanisms to employ to ensure that their needs are met.  Rather, in the interest of maximizing profits, servicers have engaged in a laundry list of bad behaviors, which have considerably exacerbated foreclosure rates, to the detriment of both investors and homeowners.”  Maybe having a lawyer would help… ya’ think?


9. Are you aware that servicers, although not permitted to do so, charge fees to homeowners for loan modifications, that sometimes these payments take the form of a special forbearance agreement or lump-sum payment of arrearages; other times it is less clear what the payment is for?

That a Bank of America loss mitigation representative informed a Pennsylvania homeowner’s counsel that if the homeowners paid $2,200.00 to Bank of America, then Bank of America would “consider” a loan modification?  That America’s Servicing Company, a division of Wells Fargo Home Mortgage, told a New York borrower that only upon completion of a three-month repayment plan, followed by a balloon payment of $18,000, could the borrower be considered for HAMP?  And that a Select Portfolio Servicing representative demanded a payment in the amount of the original mortgage payment in order to demonstrate the borrower’s “good faith” before entering the trial period?

10. Are you aware that the foreclosure crisis is nowhere near over, in fact in many ways it has just begun?  And are you aware that it wasn’t the borrowers that caused our economic downturn… it was the banks?  The banks fraudulently packaged asset backed securities, shattered the capital markets, and lowered their reserves for future losses in order pay themselves countless billions in undeserved bonuses?  Are you aware that today’s homeowners are watching our government pump trillions into the banks that caused the problems, while they are left to fend for themselves?

Norma, I’m going to assume that you haven’t been influenced by anyone connected to the banking industry.  It’s a benefit of the doubt sort of thing.  If you have, then shame on you.  If you haven’t… well, then you’re an idiot.  And a dangerous one at that.  I don’t think there’s a chance that the Governator will sign it, but there’s always a chance he will, and your letter could have been the thing that pushed him over the edge.

… And then people would panic and could not hire an attorney.  And there would be floods of bankruptcies… and more suicides.  And the courts wouldn’t uphold the bill… and there’d be nothing in place… and more people would get scammed… only this time, Norma dear… it would be your fault.  Because you wrote a letter having not even the foggiest clue of what you were saying.

… And tomorrow you’ll get up and walk around sipping some sort of latte thing and read the paper and you’ll be more concerned with Iran and the Middle East than you will the fact that almost 50% of all mortgages are now underwater, and 12 million Americans will lose their homes over the next two years.


Does it bother you to realize how much more time you’ve dedicated to caring about who loses three grand, as compared with how much time to spend worrying about who is losing a house at this very minute?  Did you write the governor and express your outrage over that, Norma?  Or do you only get outraged over the low dollar sh#t, and leave the real tragedies to someone else?

… And I know you’re also positively enthralled at the idea that AB 764 also requires homeowners to be given a notice saying they can get their loan modified for free without any help whatsoever, but there’s not a single adult in the country that hasn’t heard that lie a thousand times.

… And you also stated that you love the fact that “AB 764 also prohibits deceptive advertising used to lure borrowers into thinking they are dealing with a governmental agency or nonprofit entity, which has been a common practice used to deceive consumers and profit by their confusion.”  You really think other people are morons, don’t you Norma?  Did you major in Elitist Snob at Barnard?

… And Norma… scammers don’t care about laws… that’s largely why we refer to them as scammers.  For the record, this law doesn’t make ripping someone off for three grand illegal… ripping someone off for three grand, I’m pretty sure, is already illegal.  Of course, you’re the attorney, so…

Norma, there’s no question that you’ve completely blown it on this issue, and I’ll tell you what I’m going to do… I’m going to send your letter to every homeowner I talk to… and there are hundreds… and if I find even one that agrees with your position… I’ll sound the alarm and write a whole column about it… sing your praises.   Because the truth is if AB 764 is signed into law, the result will be more scams and much more pain and human suffering than anything I could imagine in this country.

How can you possibly not know that?  Are you stupid?  Or is this just a case of stupid is as stupid does?


Either way, I’m tired of it.  There’s no excuse to still be that ignorant about what’s happening all around you.  It’s been going on three years, for God’s sake.  I’ve known several lawyers who’ve found themselves in trouble quite unexpectedly and finally had to hire an attorney to help them save their own homes.

If that happens to you, and you find you need to hire an attorney, I hope you’ll think of me… smiling… at a picture of hypocrisy that knows no bounds.

Norma… snap out of it.

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