Neil Barofsky and American Banker Finally Catch Up to Mandelman Matters

I really don’t care how that headline sounds.  I’m going to make my point regardless, and I think it needs to be made bluntly.  I’m far too angry and way too upset to do anything else.  This is it for me.

I started this blog three years ago for ONE reason: Because the government and banking PR machine was blaming the crisis on “irresponsible borrowers,” and I KNEW then that would prove to be an ultimately destructive thing because, as I wrote back then… when they realize what’s really happened, that it’s not “irresponsible borrowers,” they will have destroyed  the political will to do what’s needed to fix it.  No one was going to support a bailout of the “irresponsible.”

I wrote all of what I’m about to say hundreds of times and in so many ways I couldn’t even count them all.  Recently, I wrote an article titled, “Our future depends on just one thing.”  Abigail Field worked on it with me.  I don’t know… maybe it was 15,000 words.  I was shocked at how many people actually read it… maybe 5,000, which is a lot when you consider how much time it required.

I knew what would come, but I also voted for Barack Obama and I believed that his administration would do something about the foreclosure crisis.  And as I’ve sat and watched this administration’s policies and performance, I have to admit that up until recently, I didn’t know why they were doing the abysmal, seemingly unfeeling and irresponsible job they so obviously have done.  The kind of job that led Neil Barofsky to make the comments he made this week… his comments you’ll read below.

Now, however, I know what’s happened and why it happened.  It happened because the Obama Administration continues to be afraid of being seen as bailing out irresponsible borrowers… quite a coincidence, right?  Actually, not so much.  (Here’s another of my past attempts to explain this situation in writing: “Why Americans Are Allowing the Foreclosure Crisis to Continue.”)

But, you’ve heard what I have to say, so try this on for size and see what you think.  The book, “Confidence Men,” by Ron Suskind, tells the inside story of the first three years of the Obama Administration, based on hundreds of interviews with insiders… including interviews with President Obama himself. It’s not pro or con… it just is.  Jon Stewart interviewed Suskind a couple of months ago… it’s fascinating and I’ve included part one and two of that interview below.  Watch it.  Please.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Exclusive – Ron Suskind Extended Interview Pt. 1
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook
The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Exclusive – Ron Suskind Extended Interview Pt. 2
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

Is it becoming clear?

I’ve written 600 articles now, and I suppose if I could get anyone to read a few hundred of them it might change their mind… but that would take some time.  This is an election year, as I’ve pointed out many times lately, and we need to shatter the “irresponsible borrower” misperception now if we expect anything to change for the better any time soon.

Last summer, when I returned from a week working with people at the Hawaii legislature, I knew there was only one thing to do… produce an open and shut case in a broadcast quality documentary-style program… and make it entertaining enough that it would go viral on the Internet…. maybe raise a hundred grand and get it on cable television.  Anything else would take too long to influence the number of people that had to be reached.  Nothing is absorbed as fast as high-quality video programming.

I didn’t want to produce a documentary program… I’ve done it many times in my career and it’s a lot of work.  But there was no choice, I’d been trying to get everybody on board for two and a half years at that point, and it was simply taking too long.  And I knew I was probably the only person who could do it.  I spent 20 years in corporate America as a creative director and communications strategist and I know I’m the only person in that world that could do it, because I’ve successfully shattered similarly erroneous views many times.

But… and it’s certainly all my own fault… I just haven’t been able to promote it effectively enough to get others to fund it to any real degree.  And I didn’t want to seek an investor that would want to make it into a money-making proposition and not a viral Internet campaign.

The truth is, I’m not all that comfortable with self-promotion to begin with, and this space is packed with scammers and fast talkers, which makes it that much harder to get people to write checks no matter the purpose.  They don’t know who to trust, and I don’t blame them.  So, I resigned myself to the fact that I would have to fund it myself, and that would mean that it would take a lot longer to get it done… but, it was what it was.

I’ll probably do a book at some point too, but not now because it’s too time consuming and we have an election year in front of us.  If we’re going to succeed at influencing politicians on this key point… this would be the year.  If we fail… it’s over.  What will happen… will just happen… and it will be a tragic failure for me, and an awful period in our nation’s history.

Just last night, I was talking to a homeowner in Pennsylvania and he asked me what was stopping the administration from doing anything effective about the crisis and I said right away, “Oh, it’s Rick Santelli… it’s only one thing… the ‘irresponsible borrower.’  There’s simply NO SUPPORT to help people that the country largely perceives as having been irresponsible borrowers.”  I don’t really know if he believed that I was 100% right…. maybe he thought I was partially right, but not all the way, I really don’t know.

People want it to be more complicated that that.  They don’t want to think of our government as just a bunch of guys making decisions.  People want to imagine that there’s a puppet master pulling strings and that they just aren’t privy to the information.  It’s reassuring to think that way.  Last year, I remember saying about the Obama Administration:

“Tell me there’s a plan… I don’t care if it’s an evil plan… as long as there’s A plan, I’ll be fine.  Because this looks like a bunch of people not knowing what to do and doing at terrible job at whatever they try… and that is scaring me to death.”

I started calling bankers and servicers and those on the other side because I realized that no one was winning, and with so many people losing… someone SHOULD be winning.  But no one was or is… everyone’s losing… we’re literally circling the drain.  Oh, I know… there’s a handful of bankers still getting obnoxious bonuses, and that’s wrong… but in the big scheme of things… it’s nothing really.  In a world where losses are measured in trillions, even a $100 million bonus is a rounding error.

Very quickly I realized two things… that those on the other side of this fight weren’t all that concerned with us one way or the other… and that they had no idea what to do to improve things either.  Our politicians are obviously clueless… they’re not even afraid of people not voting them back into office.  My guess would be that most of the elected representatives in the Hawaii legislature didn’t even view what’s happening as a “crisis.”  And the jackass in Arizona, Harper, think the problem is people walking away that can otherwise afford the payments no problem.

No… we’re not winning.

By the way, it’s not like I’m not used to being right way ahead of everyone else when it comes to things like this… I’ve got a 20-year track record of being exactly that.  But I never wanted to come off like that to people as a homeowner advocate and blogger, and I knew no one knew of my professional career in this world of homeowners and their lawyers.

Now, it just doesn’t matter.  I don’t really care how I “come off.” It is what it is… and I’m not a person capable of deluding myself or others into believing something that’s not true.

Here’s the story from American Banker… it’s short, so I’m posting the whole thing… read it, please.

Barofsky Blasts Treasury, Obama for Housing Mess

Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, hammered the Obama Administration and Treasury Department Tuesday night at a panel discussion on the foreclosure crisis, saying fears of a political backlash led to the administration’s tepid response to the housing crisis and refusal to back principal reductions.

Barofsfky, a former assistant U.S. attorney who is now a senior fellow at New York University’s School of Law, said the administration’s Home Affordable Modification Program was “a failure” because the Obama White House feared being labeled as helping “undeserving homeowners.”

Asked if there was any hope for homeowners at risk of foreclosure, Barofsky said: “Um, no.”

The panel was organized by the non-profit news organization ProPublica. The other participants included ProPublica reporter Paul Kiel, Alyssa Katz, editor of Columbia Journalism School’s New York World, and this reporter.

“The crisis is an example of how people lose their faith in government, which has costs that are hard to quantify,” Barofsky said during the two-hour event at the Tenement Museum in New York’s Lower East Side. “Everything that has happened since [Tarp] has been something of a mess.”

When the administration introduced the Hamp program in 2009, Rick Santelli, an editor at CNBC Business News, went on a rant” calling defaulted homeowners “losers” and accusing the government of “promoting bad behavior.” Santelli is credited with sparking (and naming) the Tea Party Movement by suggesting that people opposed to the government form a “Chicago Tea Party.”

Barosky said the White House, out of concern that aiding homeowners would cause a political backlash, quickly backed away from its goal of helping 3 million to 4 million homeowners avoid foreclosure.

There was a fear of “moral hazard,” the idea that homeowners who were not financially strapped would default to get a principal reduction, Barofsky said.

He argued that the $28 billion left in the Tarp program should be used to modify loans, but he faulted the Treasury for never spending the money, calling it a “lost opportunity.”


Homeowners, lawyers and fellow bloggers… we ARE NOT winning.  And we won’t win.  I’ve tried to say this numerous times in more politically correct ways, but it obviously needs to be said in less uncertain terms.

The foreclosure crisis is has only affected less than 15 percent of America’s homeowners.  More than 85 percent aren’t having the problem… yet.  Ninety-five percent of homeowners just go through foreclosure without any representation.  And with at least 3,000 homeowners evicted every single day, seven days a week… we get all hip-hop-happy because a literal handful have some very moderate levels of success… we tell ourselves we are gaining on it… but we’re not.

We’re not gaining on it because there is no WE… so, WE can’t be fighting it.  At best we represent a speed bump to the banking industry, and that won’t change for several years when there will be so many more people swept under that there will be societal pain to a degree we’ve never even imagined.

Lawyers… fighting your cases one by one… in your own small universes, without any sort of data being reported… without any sort of association… you’ve had some great cases, but their impact is akin to a Bandaid on a severed limb.  Loan modifications are the only way people are staying in their homes in any number, but the banking industry has turned those helping homeowners get loans modified into something close to drug dealers, as they echo the familiar refrain… “Call your bank directly or call a (bank funded) HUD Counselor.”

And my fellow bloggers… we continue to limp along writing perhaps bravely and perhaps helpfully, but we’re trying to outrun a tsunami in our individual small canoes.  It’s never boring… it’s stimulating even.  But it’s just nowhere near enough.

I’m not saying we should stop what’s going on… in fact, we need to do more… we need about 10,000 more lawyers and that wouldn’t be near enough.  Maybe it’s all we can hope to do as the collection of individuals that we are, but I can’t not call it as it unquestionably is.  And I can’t just sit back, write my articles and pretend that I’m changing the world.

So… here’s the deal… I need to know how many DOERS are out there.

If you’re a DOER I need to hear from you by email.  If you’re a DOER, willing to support a campaign to strategically target and then attack chosen opportunities, I need to hear from you now.  My DOERS have saved three homes in a row by sending emails in a coordinated way.  Raise your hand now and tell me your on board, because I’ll need to be able to reach you to tell us what WE are doing via email, so as not to tip our hand.

We’re going to “OCCUPY,” but in a very different way than OWS… we’re going to OCCUPY without leaving our homes. It’s going to be a game of inches… it’s going to take 3-4 months before we reach the critical mass that moves the proverbial needle.  It’s not just about reading, it’s about doing.  But, we will gain momentum and WE WILL shatter the “irresponsible borrower,” stereotype.

We’ve already proven that we can inspire a bank to take immediate action by sending some number of emails in a coordinated and targeted way.  Imagine when I can write something that results in 1,000 or 10,000… or even 100,000… or maybe someday 1,000,000 people sending a letter and a bag of pretzels to a specific individual’s office.

  • What do you suppose would happen if a senator or a governor were to walk into work one morning and find 30,000 bags of pretzels carrying one message?  And not once, but every month… or more often that that if need be.  Would it make the news?  Damn right it would… and others would join our ranks.
  • Why couldn’t a group like that raise a fund to help with eviction defense for senior citizens or single moms?  Wouldn’t the existence of such a fund also make the news?  Yes it would.
  • Why don’t we have one highly visible site with trusted lawyers listed on it, so no one ends up retaining sub-par legal representation?  Would that be newsworthy?  Yes.  My trusted attorneys tab gets more traffic than 90 percent of my articles each month.
  • Why couldn’t such a group become its own PR machine, publishing viewpoints as part of a strategy, instead of the current passionate but disjointed efforts?  If we can’t get a documentary done, why couldn’t we produce a series of viral vignettes that we all help to distribute to the media, to politicians… to servicers… to other homeowners and that destroy the irresponsible borrowers stereotype?
  • Why couldn’t we have our own bills being proposed in various state legislatures that provides solutions?
  • Why don’t we make better use of headline risk by publishing the stories of injustice that go on each day?
  • And much more…

We’re not wining the way we’re going.  I’m sorry to say it that way, but then again maybe I’m not.  We have to fight as a WE.  I’m not trying to be a king… in fact, I’ve never wanted to be a king.  I want to be a member of a team… but I just don’t see anyone else with any plan to inspire real change.  And yet the banking lobby is well-funded and relentless.

Raise your hand and be counted… and counted on.  Email me at now.

No one helps those who don’t help themselves.  We need to be WE… and now.  Because as long as the country believes that irresponsible borrowers are the problem, nothing will change for borrowers… not enough lawyers will join the fight and as they say… we’ll see you in the soup line.

I need a core group from which we can build.  It shouldn’t be painful, there are many of us.

The country hasn’t changed.  The power of the people remains intact.



Any answer is fine… but I do need to know now.

Mandelman out.

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