Norma Garcia, Consumer Reports Magazine: Stupid is as Stupid Does
I grew up with Consumer Reports magazine.Â 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.Â I donâ€™t think there was ever anything purchased in my parent’s home that didnâ€™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.Â 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 familyâ€™s Supreme Court, where my dad sat as Chief Justice.Â 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 â€śSenior Attorneyâ€ť from the Consumers Union, according to the words appearing under her signature, wrote a letter to Governor Arnold Schwarzenegger.Â Norma apparently felt compelled to write a letter to the Governor of California asking him to sign into law Assembly Bill 764 (â€śAB 764â€ť), one of the two bills that claim to be motivated by the need to protect consumers from â€śscammersâ€ť 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.Â What a surprise to find that last part out, huh?Â 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 canâ€™t accept payment of any kind from that homeowner until the bank has approved the loan modification.
Nowâ€¦ getting a bank to approve a loan modification commonly takes six months or more, and itâ€™s not at all uncommon for it to take almost a year.Â Anyone thatâ€™s tried to get a loan modification knows this to be the caseâ€¦ and I do mean anyone.Â 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.Â Does anyone think that lawyers will represent clients under that scenario?Â I would certainly hope not, but if thereâ€™s any confusion, feel free to run the question by any attorney you happen upon.
Now, make no mistake about it, thereâ€™s absolutely no question in my mind that Norma has never personally attempted to obtain a loan modification, nor has she known anyone thatâ€™s attempted to obtain a loan modification.Â And if thatâ€™s not irresponsible enough, Iâ€™d have to say that sheâ€™s never even Googled â€śloan modification,â€ť howâ€™s that.Â She doesnâ€™t say any of this in her letter to the governor, but how else could she make the inane statements she made?
Thatâ€™s what makes Norma the most dangerous kind of attorneyâ€¦ the kind who doesnâ€™t feel the need for personal knowledge or confirmed facts before voicing an opinion.Â What sheâ€™s advocating would be harmful to homeowners in California to the point of being unconscionable.Â Why would sheÂ say the things she said in her letter if she knew any better?Â 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.
Hereâ€™s what Norma says about why Consumers Union supports AB 764:
â€śConsumers 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.Â 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.â€ť
Okay, Normaâ€¦ can I call you Norma?Â Iâ€™d like to pose a couple of questions that Iâ€™m fairly sure youâ€™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?Â Itâ€™s an obvious question, perhaps, but Iâ€™m just wondering.Â 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 Administrationâ€™s â€śreport cardsâ€ť?Â The ones first published on August 9th, I believe?Â The ones that show that Bank of America, the countryâ€™s largest mortgage holder, has modified just 4% of its eligible loans?Â Wells Fargoâ€¦ 6%?Â Am I ringing any bells for you, Norma?Â 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?Â Who failed in that scenario, Norma?Â Work with me here.
3. Do you understand why people get scammed?Â It starts with the government telling everyone that they can just call their bank directly when they canâ€™t. Â Then they tell everyone that every firm offering to help is a scam, which is just silly and no one believes.Â So, they try it themselves, and it doesnâ€™t work.Â And they call a nonprofit and it doesnâ€™t get them anywhere either.Â So, they start to panic, and because everyoneâ€™s a scam, they donâ€™t know what to do or who to believe.Â 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 donâ€™t reduce the number of legitimate helpers, you increase the number.Â Want to get rid of bootleggers?Â Put a liquor store on every corner.Â No more bootleggers.Â There are millions of homeowners that need help todayâ€¦ they canâ€™t call their lender directlyâ€¦ and there arenâ€™t enough nonprofits on the planet to help, even if they were effective, which theyâ€™re not.
Now you, and the Consumers Unionâ€¦ the people who are supposed to be looking out for the consumersâ€¦ you want to support a bill that would make it impossible for a homeowner in distress to hire a lawyerâ€¦ and you yourself are a lawyer?Â Which province are you from, Comrade?Â Are you high?Â On crack?Â Are you sure youâ€™ve thought this through?
4. Are you aware that within the Treasuryâ€™s program there are numerous lenders or servicers that have been cited by judges or regulators for having engaged in improper behavior with customers?Â 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?Â Improper behavior, Norma.Â Theyâ€™ve screwed homeowners over in major, life-changing ways.Â Is any of this starting to sound like lawyer-land, Norma? Â Who do you recommend someone call when they get screwed over in a life changing way? Â A plumber? Â Youâ€™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 Treasuryâ€™s participating companies: â€śWe didnâ€™t treat the people very well, but the money was pretty good,â€ť stated Davis. Â The motive, he said, was simple: force people into foreclosure as a way to earn higher bonuses.Â â€śWe would call the customers and ask them what bridge they were going to live under,â€ť Davis testified.
And are you aware that Ocwen lost that lawsuit?Â A Texas jury found that the company engaged in â€śfraudulent, deceptive, or misleading tactics” that it called â€śunconscionable.â€ťÂ 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.Â And Iâ€™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? Â She testified that: â€śAdvocates for homeowners continue to report problems with implementation of the program. Â Servicers are all too often refusing to do HAMP modifications, soliciting a waiver of homeownersâ€™ rights to a HAMP review, and structuring offered modifications in ways that violate HAMP.”
Iâ€™m sure most homeowners would have no problem identifying the ways in which HAMP modifications should not be structured and Iâ€™m equally confident that most homeowners would scream bloody murder if someone solicited a waiver of their rights to a HAMP modification.Â I couldnâ€™t do any of those things, but Iâ€™m probably not a representative example. Â 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 mailÂ warns: â€śIf you leave more than one message, you will be put at the end of the list of people we callÂ back.â€ťÂ Charming, absolutely charming.Â A servicer who gets snarky with their voice mail greetings.Â Fabulous.Â That probably doesnâ€™t frustrate hardly anyone.Â (And yes, thatâ€™s how I wanted to phrase that.)
8. Are you aware that Diane Thompson also testified that â€śservicers serve investors, not borrowers,â€ť and that â€śhomeowners have few market mechanisms to employ to ensure that their needs are met.Â 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.â€ťÂ Maybe having a lawyer would helpâ€¦ yaâ€™ 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 homeownerâ€™s counsel that if the homeowners paid $2,200.00 to Bank of America, then Bank of America would â€śconsiderâ€ť a loan modification? Â That Americaâ€™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? Â And that a Select Portfolio Servicing representative demanded a payment in the amount of the original mortgage payment in order to demonstrate the borrowerâ€™s â€śgood 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?Â And are you aware that it wasnâ€™t the borrowers that caused our economic downturnâ€¦ it was the banks?Â 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?Â Are you aware that todayâ€™s homeowners are watching our government pump trillions into the banks that caused the problems, while they are left to fend for themselves?
Norma, Iâ€™m going to assume that you havenâ€™t been influenced by anyone connected to the banking industry.Â Itâ€™s a benefit of the doubt sort of thing.Â If you have, then shame on you.Â If you havenâ€™tâ€¦ well, then youâ€™re an idiot.Â And a dangerous one at that. Â I donâ€™t think thereâ€™s a chance that the Governator will sign it, but thereâ€™s always a chance he will, and your letter could have been the thing that pushed him over the edge.
â€¦ And then people would panic and could not hire an attorney.Â And there would be floods of bankruptciesâ€¦ and more suicides.Â And the courts wouldnâ€™t uphold the billâ€¦ and thereâ€™d be nothing in placeâ€¦ and more people would get scammedâ€¦ only this time, Norma dearâ€¦ it would be your fault.Â Because you wrote a letter having not even the foggiest clue of what you were saying.
â€¦ And tomorrow youâ€™ll get up and walk around sipping some sort of latte thing and read the paper and youâ€™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 youâ€™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?Â Did you write the governor and express your outrage over that, Norma?Â Or do you only get outraged over the low dollar sh#t, and leave the real tragedies to someone else?
â€¦ And I know youâ€™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 thereâ€™s not a single adult in the country that hasnâ€™t heard that lie a thousand times.
â€¦ 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.â€ťÂ You really think other people are morons, donâ€™t you Norma?Â Did you major in Elitist Snob at Barnard?
â€¦ And Normaâ€¦ scammers donâ€™t care about lawsâ€¦ thatâ€™s largely why we refer to them as scammers.Â For the record, this law doesnâ€™t make ripping someone off for three grand illegalâ€¦ ripping someone off for three grand, Iâ€™m pretty sure, is already illegal.Â Of course, youâ€™re the attorney, soâ€¦
Norma, thereâ€™s no question that youâ€™ve completely blown it on this issue, and Iâ€™ll tell you what Iâ€™m going to doâ€¦ Iâ€™m going to send your letter to every homeowner I talk toâ€¦ and there are hundredsâ€¦ and if I find even one that agrees with your positionâ€¦ Iâ€™ll sound the alarm and write a whole column about itâ€¦ sing your praises.Â Â 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?Â Are you stupid?Â Or is this just a case of stupid is as stupid does?
Either way, I’m tired of it. Â There’s no excuse to still be that ignorant about what’s happening all around you. Â It’s been going on three years, for God’s sake. Â 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.