PREFACE
& UPDATE, 2015
So
why do I write, torturing myself to put it down? Because in spite of
myself I've learned some things. Without the possibility of action,
all knowledge comes to one labeled "file and forget," and I
can neither file nor forget. Nor will certain ideas forget me; they
keep filing away at my lethargy, my complacency. Why should I be the
one to dream this nightmare?
--Ralph
Ellison
I'm
a man without a corporation.
--Paddy
Chayefsky
The
fall of 2008 marks a line in the sand for America and the world.
Those fateful days harbored the most radical welfare payments to
criminals in history and produced the masters' new whip. I call it
“EM08” – the economic meltdown of 2008 – but it has taken on
a much larger meaning. It stands for criminals and bureaucrooks run
amok in the halls of our government and corporations on a scale that
would make Max Weber blush. EM08 is a pile driving reminder that we
are subject to the violence of a segment of society unbound legally
and politically.
Make
no mistake, the evil empire is shoring up like at no time, making
hoarders look like beginners. As of next year, Oxfam projections have
it that the richest 1% will own over half of the wealth.(1)
If leading up to the fall of 2008 was phase one of EM08, then we're
currently (January, 2015) in phase two: “maximum extraction,” and
its fuel is the inflating of massive bubbles; equities, bonds,
student loans, credit cards, car loans (which have now been extended
to seven years!), unfunded liabilities (pensions & healthcare),
federal debt, state debts, muni debts... all in the face of wages
that have basically remained flat and a job landscape whose real
unemployment rate is never revealed by the mainstream media.(2)
Meanwhile,
the Federal Reserve has, since the fall of 2008, been on an
unprecedented tear, printing money to the tune of over four trillion
dollars out of thin air, while keeping zirp (zero interest) in play
for an equally unprecedented amount of time.
On
the fundamental level, zirp punishes savers, and therefore encourages
gambling, the very behavior you do not want to encourage in such a
risky environment. After all, if you can't earn interest in a bank,
the economic imperative is to play the market. Take a look at what
stocks have been doing for the proof; in the second week of November,
2014, equities hit a new record. Real estate prices have swollen,
particularly in desirable areas such as LA, while ominous debt
bubbles have inflated everywhere to create a new American record,
some sixty trillion in aggregate debt.
Think
about unfunded liabilities which are now rearing their heads
everywhere. The key thing about them is the Baby Boomers, one of the
largest demographics in history, that is now beginning to retire.
That means every year, millions are joining the benefits call,
stressing those debts. But there's another factor when it comes to
the Boomers; they're living longer, which only adds more pressure.
Take
my city; LA's annual budget is about $7 billion. As of 2013 the
city's unfunded liabilities totaled some $10 billion. But there's
more; LA is one of California's most important cities, and California
is the most important state in the world's first true global empire.
About a year ago, analysts were wringing their hands over Italy,
which was in the dump economically (and still is). That's because
Italy is the world's eighth largest economy.
But
California is also the world's eighth largest economy, we're as large
as Italy. And I ask anyone that will listen, what happens when the
most important state, in the most powerful nation is in debt to its
eyeballs?(3)
This
is why Detroit's bankruptcy was watched by so many; the restructuring
of its obligation, its unfunded liabilities. Unlike the bond holders
in EM08 who were given unprecedented amounts of undeserved welfare
money totaling in the tens of billions in taxpayer money, Detroit
retirees had to take a haircut. Our bureaucrooks say a lot of things,
hold officious hearings like the Phil Angelides led “Financial
Crisis Inquiry Commission”(4)
and erect bureaucratic epistle torrents like the Dodd-Frank Bill in
the wake of EM08. But watch what they do, or rather, what they don't
do, in this case, jail the criminals. By the actions/in-actions of
these bureaucrooks, evidently some Americans, it seems, are just more
important than others. The takeaway here is: Laws without enforcement
are nothing.
Isn't
this a remarkable situation? We now have one foot in the past for our
crack addled gambling, borrowing and spending, and one in the future,
with unfunded liabilities (and derivatives, which some value at over
$700 trillion). Empires past – the Mongols, the Romans, England,
Spain... – all ruled limited conquests due to the crudity of their
technologies. Today is different; we live in the first true global
empire, with a military base in every nook, drones on remote and the
world pegging to the dollar for trading. But EM08 has revealed
something far more sinister; a system of finance that has infected
everything. This is in fact why most Americans would be astounded to
know that the welfare bailouts of 2008 didn't only go to American
banks (via insurance, like AIG, which then flowed to Goldman, et al),
but also to foreign banks. That's right, American taxpayer money was
stolen and used to welfare foreigners in order to protect certain
interests.(5)
Then
there's the infection of other systems via our mortgage backed
securities, sold like crack to addicts. High as a kite, this is the
odd system of finance we have borne, and the fingerprints of the US
banks are all over the EU. As no less than Matt Taibbi and Michael
Lewis revealed, Goldman helped rig Greece's books in order to gain
entrance into the EU, but – shockingly -- no one cares enough to
throw these psychopaths in jail.(6)
Meanwhile, the US prison system is disproportionately swollen with
black and brown inmates for smoking marijuana. I wonder what those
prisoners think, watching the Godzillas of crime stomp around, free
to plunder at will?
Government's
role was major in the run-up to EM08, and continues in its utter lack
of criminal prosecution. It doesn't matter whether Democrat or
Republican, executive branch, Congress, the Judiciary, Department of
Justice, FBI, nor the alphabet soup regulatory and oversight
agencies: SEC, CFTC, CFPB, OTC, nor the governmental oversight
committees, particularly the Senate Banking and House Financial
Services Committees. Even laws mean nothing when it comes to banks;
Sarbanes-Oxley is in place now and was during EM08. This law binds
executives to the financial statements and fiduciary claims by their
companies in their quarterly reports. That no one has even mentioned
“Sarbox” is incredible.(7)
Meanwhile,
those execs who were at the helm during the fall of 2008 have mostly
sailed off into a life of luxury or, for those still active, are
still amassing fortunes:
•
Jimmy Cayne, then at Bear
Stearns (over a five year period his compensation
was
$132.14 mil),(8)
•
Kerry Killinger, then at
Washington Mutual (compensation in 2008: $25.1 mil),(9)
•
Stan O'Neal, then at Merril
Lynch (his exit compensation: $161.5 mil),(10)
•
John Thain who took over
from O'Neal at Merril Lynch (in 2007, his compensation was a
staggering $83.1 mil),(11)
•
Chuck Prince then at Citi
(5 year compensation: $49.25
mil),(12)
•
Dick Fuld, then at Lehman
Brothers (over half a billion dollars in his tenure),(13)
•
Ken Lewis at B of A (5 year
compensation: $165.49 mil), (14)
•
John Mack then at Morgan
Stanley (net worth approximately $100 mil),(15)
•
John Stumpf at Wells Fargo
(Still active: $13.8 mil in 2008 compensation),(16)
•
Lloyd Blankfein of Goldman
Sachs (still active, he received a 9.5% increase for
2013,
bringing his compensation to $23 mil),(17)
•
and Jamie Dimon at JP
Morgan Chase (still active; he just received a 74% raise
for
2013, to $20 mil and has made $90 million since 2008.(18)
But
a special eye should be cast toward Fannie Mae, the might-as-well-be
Shelley creation of our worst nightmares, a bureaucrook Godzilla so
rife with corruption that it deserves a special treatise outside the
scope of this platform.(19)
Then
there's our supposed crusader, Liz Warren, who rode in on her white
horse, chiming that we needed to erect yet another alphabet soup
agency – the Consumer Financial Protection Bureau -- to regulate
finance on behalf of “the people.” What's so perplexing is that
we already have a bounty of regulatory bodies... all failed us then
and continue to do so. So that means we need to grow our government
and install another agency rather than look in the mirror and fix
what we have??? If you run a red light and don't get caught, does
that mean we need to create another highway patrol?
Make
no mistake: THAT is what bureaucrooks do.
To
the point, just what are our tax dollars being used for if not one
single regulatory and oversight agency can do their jobs amidst the
largest crime scenes in history? Incredibly, SEC staffers were caught
in a porn scandal as the meltdown was well under way. Welcome to the
insanity of EM08.(20)
Which,
in light of the utter lack of will to prosecute EM08 criminals and
weed out corrupt government officials, leads to the crucial role of
the whistleblower. Former Lehman lawyer, Oliver Budde has argued
against his former boss' testimony to congress (see citation #13),
and recently, two have had their stories come to light in relatively
prominent ways: Carmen Segarra and Alayne Fleischmann. Segarra
stepped forward as an ex-insider with the NY Fed, regulating one of
the poster children of EM08, Goldman Sachs. Her revelations regarding
regulatory capture are shocking, caught on audio tape and point to
how having agencies and laws mean nothing if there is no will to
prosecute and do what's right. Fleischmann was on the other side,
rather, inside, in the belly of the beast, as a compliance lawyer
with JPMC. No less
shocking,
her revelations about the culture of criminality within our at
present largest American bank should give pause in the least and
banishment to outer Siberia at most.
Budde,
Segarra and Fleischmann paint a picture of just how corrupt and
rigged our system of finance and governance is, and how, in the case
of Segarra, despite appearances and mumbo jumbo to the contrary, they
work together. While I think Marx got some criticisms of capitalism
down, ultimately I disagree with his conclusion of “all roads
lead[ing] to Communism.” But I particularly disagree with his
famous quip of religion being “the opiate of the masses.”
When
I was in college back in the Stone Age, I happened to be walking down
the thoroughfare back to my dorm. Aligning the path were special
interest groups of all kinds; “Koreans for Christ,” “Journalism
Now,” “Asian American Students Group,” “Black
Student Union”... and then there was a small, but very powerful
conglomeration of booths: Visa, Mastercard, AMEX. Within the span of
about 45 minutes, I had cards from all three. So did all of the
students I knew.
Today,
with credit card debt one of the myriad bubbles roiling our world,
one need only look at the trend line from the late 70's and early
80's to see the startling rise in credit card debt. And Marx? Well,
it's not religion that's the opiate of the masses, it's the ability
to whip out a 3”x2” piece of plastic and tell the clerk, “I
want that new flat screen, now.” But here's where it gets even more
interesting; “they” even have the nomenclature down. For it's not
a “credit” card, but a debt card.
Continue
this to the modern American phenomenon of buying as sport and the
rise of the public storage space as a viable business model. Full of
our commercial conquests, Americans can't even park their cars in
their own garages anymore. “Hoarders” isn't just a fringe
phenomenon, it's an epidemic, a symptom of larger wheels turning.
A
while back people began asking me when I thought the next meltdown
would happen. Of course, there's really no way to forecast that, but
the only date that makes sense is the 2016 presidential election.
Meaning, that the system will be propped up until then in order to
install the next regime. After that, all bets are off.
But
who knows? This system, as willful as any in history, has all of the
ingredients to keep going, particularly the ability to extract money
via taxes, fines and surcharges, print money at will, manipulate
interest rates, control public perception, catch you in the
bureaucrook web... steal. Most of all, to point a gun and start wars.
It holds all of the aces and its mandate is not our collective
livelihood, but its own propagation.
And
yet if it's one thing history says, it's that there's hope. For if
some ragtag colonials can pick up muskets against the mighty British
empire, or L'Ouverture can rally his fellow slaves and if ordinary
French people can storm the Bastille, we can change. It's possible.
But we need pragmatic strategies and good leaders who are not in love
with themselves, let alone the will of the people that moves to
action that matters.
One
of the most cogent pieces of advice when it comes to history was
uttered by Mark “Deep Throat” Felt: Follow the money; it's a
bedrock. But Felt said something later, when Bob Woodward, frustrated
at making progress on “The Story of the Century,” pressed Felt to
come clean, to tell him what he knows. Felt hesitates, and then says
some of the most chilling words in history:
...the
list of the people involved is longer than anyone can imagine. It
involves the entire U.S. Intelligence Community. FBI... CIA...
Justice... it's incredible.
EM08's
scope is so vast, macro-dominated by Forex, Libor, mortgages, and
derivatives ... spanning the globe irrespective of so-called “right”
and “left” or even extremist politics, it makes Watergate, the S
& L crisis and the Mafia combined look like kindergarten. We're
now sitting on top of the biggest pile of bubble mega-bombs in
history. At this moment, the eyes of the world are on Greece, and
rightly so. But here's the rub: Greece is just the tip of the
iceberg. With lit fuses everywhere, the question is, which one will
it be and what can we do to protect ourselves?
Watergate
was indeed “The Story of the Century.” But that was last century.
JP
Kaneshida
Los
Angeles
March,
2015
FORWARD
When
the economic meltdown of 2008 (EM08) sent its shot heard round the
world, few were thinking that four years down the road we'd still be
in the thick of it. Yet, here we are, with the Fed having recently
(September, 2012) announced not only more “quantitative easing”
(“QE,” or, creating money from nothing), but a particularly nasty
strain of it; “QE3” specifically targets the buying of toxic
mortgages to the tune of $40 billion per month with no end date
given.(21)
Thus, innocent taxpayers, far removed from the high-flying investment
banking world, have -- once again – been unfairly saddled with Wall
Street's, mortgage brokers' and insurance companies' crimes. It's all
held together by the glue of a regulatory and justice system that did
nothing to police them then and evidently has no interest in
criminally prosecuting any of the major players now.
Toxicity.
Subprime. Mortgage backed securities. Credit default swaps. It's all
so dizzying, convoluted and ... arcane. The average person has no
more idea of EM08's inner workings than the Hadron Collider. This
knowledge gap has led to what con men, magicians and hustlers
exploit, only now, the cons wear Dunhill and come from more angles
than a protractor.
There
is plenty of information on the large players and the big plays that
led us to the meltdown's doorstep. This is a different view; it tells
the tale of a single homeowner caught in EM08's hyper-byzantine web.
As such, it serves as a lens through which to look at a world that
teetered upon an historic precipice whose judgment day still looms.
Jerry
Baylor(22)
is not the typical subprime borrower. He'd purchased his home over
twenty years ago on LA's coveted westside and lived the quiet and
successful life of the American Dream; entrepreneur, technologist,
job creator, stable.
A
native Angeleno, product of both UCLA and Cal and owner of a
successful business, Jerry married Vivian(23)
and, in the late 80's, bought in to homeownership. The couple settled
into that nice section of LA that serves up plenty of beach, the
postcard LA that draws people from around the world for its lifestyle
and entertainment capitol status.
But
LA was also the belly of the EM08 Beast, spewing out construction
round the clock and, of course, the financing and post-sale hijinks
that led to the fall of 2008. And if LA was the belly, LA's notorious
Countrywide Financial, the single largest producer of toxic
mortgages, was EM08's beating heart.
Jerry's
business grew and, for the duration of the couple's homeownership,
he'd been the sole income earner and had never missed a payment. He
bought another property in the coveted Malibu area. Life was good.
Their
lives proceeded in fashion when fate stepped in; Vivian had been
traumatized by a robbery during their marriage, and the subsequent
treatment consisted of a heavy regimen of painkillers. In a short
time, Jerry was living up close and personal with an addict whose
habit would be one of the bricks in a house about to fall. Strung out
on a smorgasbord of prescription meds that had her coming and going,
the couple separated because of the strain. Jerry moved out while
Vivian remained in the house.
That's
when things got crazy and a chain of events occurred that set the
wheels in motion for his roller coaster ride.
The
news came maybe not fast and furiously, but steadily and in
escalating fashion; a DUI here, another there. Vivian hired an
attorney who knew the ropes, and soon she'd be back behind the wheel,
often high as a kite, a ticking time bomb without Jerry there to nix
the fuse.
That
fuse soon lit the bomb that led to Vivian being involved in a serious
hit and run accident and the target of a lawsuit. Since she had
separated from Jerry, Vivian had won ownership of the couple's house,
a house she'd never made a payment on because she'd never had any
income. That happens when you haven't worked in over ten years and
relied on your husband to bring home the bacon.
Vivian
was desperate now, backed into a legal and financial corner whose
angle was getting smaller. But she had an out; this was 2006. Real
estate was booming, she was in LA's coveted westside and she had the
ace up her sleeve; a home with over a decade of equity.
Enter
the re-fi business, the little discussed sub-industry (relative to
other EM08 factors), that had been a booming business, creating real
millionaires from smoke and mirrors. Think about it; liar's loan
mortgages were predatorially doled out like crack(24)
and then re-financed based upon bubble inflated prices and market
demand. Along the supply chain, the servicers at every bus stop
extracted their fees – they made real money, despite their fees
having been produced from thin air, but with the meltdown and
discovery that these loans were predatory garbage,
the supply chain servicers' bank accounts went untouched. Now,
consider if a bunch of crooks steal a shipment of flat screen tvs. So
they sell them off and you purchase one. Then the crooks get busted
and the police find that they can trace and locate these tvs. Do the
crooks get to keep the money you gave them? Do you get to keep “your”
tv?
Ethics,
legality and morality aside, 2006 saw refis booming and Vivian had
her out. She pulled the trigger, betting over ten years of equity
would produce the cash she needed to make the Sword of Damocles
swinging above her head go away. She gambled and won when Downey
Savings, a small LA bank, gave her the cash which she used to make
her problem disappear. That, despite Vivian having not been gainfully
employed in over twenty years. The terms were what we now know as a
predatory liar's loan; stated income, a low rate (for starters) and
the booby prize buried in the cereal back end balloon payment. All of
this nitro was then set down upon the fragile casing of one of the
largest bubbles in history. But if it's two laws we know about the
universe, it's Newton's Law and all bubbles burst. And Vivian's re-fi
was cruising Bubble Boulevard at high speed.
Downey
Savings and Loan's loan officers made some of that real money from
nothing, and Vivian's re-fi was part of their portfolio. In another
twist, the EM08 black hole opened up, swallowed Downey and upchucked
it on to the largest bank failures list(25)
whereupon US Bank picked up Downey's paper. Meanwhile, EM08 made its
presence felt in a bigger way with the implosion of Bear Stearns and
only months later, Lehman Brothers. Then Treasury Secretary Hank
Paulson served as point man for the largest welfare payments in
history, and Congress, despite first declining the bailouts, a mere
four days later, passed it, and America crossed an historic line.
Their excuse? They had to; Merrill Lynch (as with Bear and Lehman)
was
for all intents and purposes gone as well,(26)
leveraged to the hilt at about 40 – 1.
Bottom
line: tens of millions of innocent Americans got stuck with the
check, while Jimmy Cayne (former Bear Chair/CEO), Dick Fuld (former
Lehman Chair/CEO) and Stan O'Neal (former Merrill
president/CEO/Chair) sailed off into the sunset, golden parachutes
softly cushioning their landings upon massive piles of money in the
form of compensatory packages, despite having been key players in
dropping WMDs on the global economy.
By
2008, Vivian had fallen prey health-wise to a combination of drugs
and stress, and the prognosis was dim. She and Jerry had been
divorced for close to two years, but in spite of this, Jerry tended
to her needs, visiting her regularly since she had also been
estranged from her family of three siblings who never once visited
her.
Then
Vivian died in late 2008, but not before willing the house back to
Jerry. He moved back in to the home he'd bought and made payments on
for over a decade and a half. His payment was less than $1,800, and
his life was finally stabilizing. Vivian's two dogs were the living
bookmarks of a chapter of Jerry's life that had closed. Or so he
thought.
In
the spring of 2010, US Bank updated their computer system, and the
bank began rejecting Jerry's payments. In a mis-alignment of the
stars, Jerry had made one of his payments late, causing the bank's
system to assess late fees and begin rejecting his payments. So the
bank began sending Jerry notices to this effect, however, Jerry never
received these notices; during US Bank's update, they had recorded
Jerry's address incorrectly, were sending his late notices to the
wrong address and thus having them returned as “undeliverable.”
US
Bank then initiated unilateral escalation; instead of contacting
Jerry and speaking with him, they took his payments and began
applying them to the principal. They sent him another notice that he
needed to make another payment which, of course, went undelivered.
When they received no response, they escalated foreclosure
proceedings, the clock began ticking (unknown to Jerry), and perhaps
most importantly, after they (and the rest of the banks) had already
been made whole (and then some) with welfare from taxpayer money.
With
the EM08 clock ticking, Jerry went to the bank to make a payment and
got a shock; it was rejected. When he inquired as to the reason, the
teller gave him one of those suspicious looks and fatefully said;
“The house is in foreclosure.”
With
that sickening feeling millions of Americans were experiencing, Jerry
contacted US Bank. He paid all of the penalties and brought his loan
up to what he thought was good standing.
Then
came his July, 2010 payment. What was once a reasonable $1,800 note
had ballooned to over $5,000. In a panic, Jerry immediately called US
Bank and stated the facts; he'd been a customer for nearly 20 years,
had never missed a payment – the missed payments, as both parties
discovered, were the fault of the bank inputting his wrong address.
Jerry wanted a loan that made sense, no more, no less. They hung up
on him. Despite the absurdity of having already been paid for
committing blunders the size of mountains and helping to create an
atmosphere of uncertainty that froze credit markets worldwide, by
refusing to communicate with
Jerry, US Bank had spoken volumes; now they wanted Jerry's house.
With
the stress meter red-lining, Jerry pivoted to plan B; file for a loan
mod. If it isn't hard to imagine the average American's eyes glazing
over the minute “collateralized debt obligations” are mentioned,
imagine taking that same person and throwing them into the deep end
of the EM08 loan mod pool, rife with sharks, killer whales and mines
at every turn. “Collecting documents, filling out forms, asking
questions when I could finally find someone to provide a straight
answer… it was the most stressful and confusing thing I've ever
been involved with. I'm an engineer, I write complex code for complex
software for complex business situations,” says Jerry, his voice
reflecting the remembered frustration. “This loan modification
process makes my programming work look like a day at the beach.”
Then
in January of 2011, a US Bank rep called and told Jerry that if he
just made more money.…
One
of the fundamental principles good poker players know is that you
can't make good decisions without good information. In the aftermath
of EM08 it wasn't so much about the quality of information, good or
bad, it was also one of quantity. Go back to the essential facts;
Bear, Lehman and Merrill were over-leveraged 40-1, meaning that for
every dollar they had, there was 40 owed. Now consider the Lehman
bankruptcy, known, fairly or not, as the EM08 poster-child. Lehman
was and remains the largest bankruptcy in history that took
approximately four years to process and the bankruptcy law firms
billed in excess of a billion dollars.(27)
“I
have a stack of paper a good 3 inches thick containing all of the
shenanigans that my property was involved in,” says Jerry.
“Basically, my house was used to generate real income for loan
originators, who then sold it off to a bank, who bundled it up, and
it got sold and re-sold... up to 40 times. This is insanity.”
That
tsunami of information that Jerry's creditors produced was only the
beginning. With the foreclosure time bomb ticking, he became
desperate. Thus began another chapter in Jerry's EM08 debacle;
finding help. Right on time, a whole side-industry of “experts”
sprang up, purporting to help the underwatered, foreclosed upon and
just plain shellshocked masses. Retainers were signed, fees paid, and
results were fuzzy, at best.
There
was the young Asian hot-shot whose offices in central LA smacked of a
boiler room set up; The non-profit NACA (Neighborhood Assistance
Corporation of America); a loan broker acquaintance referred him to a
mass joinder suit; another law firm that supposedly had expertise and
traction against foreclosure; a real estate broker who'd been
speaking on the subject heard on the radio.…
Not
only was the information wide and varied, it was dizzying to try and
sort out for lawyers with real estate expertise, but for the lay
person it was the headlights catching the deer. And so, Jerry now had
two jobs; his own company, and the job of assembling a team to help
him in a fight he knew nothing about. In several instances, Jerry
signed on, paid a retainer and crossed his fingers. It amounted to
him not only being engulfed psychologically, but with thousands of
dollars in fees paid out, financially.
What
the EM08 landscape meant in the early stages of 2009 through 2011 was
that the methods to defend one's case were being discovered. Yet,
despite having been made whole by massive injections of welfare
capital by the taxpayers, the banks had their own tried and true
methods of making money. Namely, foreclosure.
The
problem with foreclosure during that time was, much like the surfeit
of information because of the re-sell market that has created the
largest derivatives debt bubble in history, the sheer numbers on the
banks' ledgers was overwhelming. The banks' answer? Robo-signing.
(see note 31)
It shouldn't be lost that despite the banks having been made whole on
their riskiest in history bets and stipulations to re-negotiate,(28)
the door was wide open for them to not work with home borrowers.
Thus, there can only be incredulity when Assistant Attorney General
Lanny Breuer says what the banks did wasn't necessarily criminal.
Aside from the stipulation that banks had to re-negotiate with
homeowners, robo-signing, (see note 31)
for one, is about as open and shut a case for massive fraud beyond
Bernie Madoff and Enron. So is selling junk securities based upon
predatory liars loans that are touted as AAA,(29)
withholding vital information and then betting against them behind
the buyer's back, a modern day text book definition of a con.
Having
little wiggle room, Jerry soldiered on. For a retainer of $5,000, he
signed on to a mass-joinder suit. His attorney filed a demand letter
against US Bank, and Jerry felt he at long last had a dog in the
fight with some bite. The feeling was short-lived; in September of
2011, California State Attorney General Kamala Harris shut down
Jerry's hired law firm amid complaints of fraud. If you've made it
this far, the situation of massive fraud by the banks by selling
securities based upon lies and then robo-signing foreclosures (see
note 31) and yet being allowed to continue with business as usual,
but closing down law firms gaining traction on behalf of home
borrowers because of “whatever” allegations is not only shocking,
but mocks justice.
In
mid-2011 Jerry had also contacted and was working with NACA on a loan
modification. Seminars and tutoring over the course of many days
produced a package that was submitted but never acknowledged. Despite
repeated attempts to contact US Bank regarding his application, he
was ignored.
Then,
suddenly, he entered into discussions with US Bank. They requested
more documentation. More calls by Jerry to ask for status resulted in
more requests for further documentation. Lather, rinse and repeat,
left a feeling of “working sideways” and resulted in an even
bigger question mark in Jerry's mind.
Heading
into the latter half of 2011 there followed more talks, with more
lawyers
and
more experts, fourteen by Jerry's count.
In
November he signed with another group representing foreclosed home
borrowers, and for $800 submitted a new loan app based in part upon
the HAMP(30) rules.
The group told him that compliance under HAMP was difficult, but that
they'd help “guide him through the process.”
US
Bank's riposte? None. They simply refused to speak with Jerry's
representative. The end result was that the foreclosure time bomb's
clock had continued to tick during months of entreaties by Jerry and
various of his representatives to no avail. The situation for Jerry
was whether US Bank intended to stonewall him or not, the end result
was the same; he lost precious time and money and was more stressed
and confused than ever.
In
January of 2012, US Bank foreclosed on Jerry with intent to sell by
the end of the month. Jerry signed on with yet another attorney who
filed suit against the bank. The ask by Jerry's attorney? Restrain
the foreclosure and sale of the property.
The
request was denied by the court, the house went on the market, there
was one lone (under) bidder, and US Bank took back the house, despite
having been made whole by welfare money and having made money from
Jerry's payments. Jerry's story is still unfolding; he's gearing up
for another action and as such is keeping mum, and yet it's with more
than a touch of resignation when he says,
“This
isn't death by firing squad, it's by a million cuts, and no one has
my back. A nick here, another there... pretty soon you're bleeding to
death. This shit is soul crushing.”
There've
been a spate of bank settlement payments since the fall of 2008; most
recently, US Bank, along with the other too big to fail banks, agreed
to settle for the robo-signing crime spree.(31)
It's
alarming to watch what's happening, but here's a bit of recent
history; George H. Bush is arguably a far better president than his
son George W. or Barack Obama if for nothing else than during the
Savings and Loan crisis, he prosecuted over a thousand bankers and
jailed over 800. Bush I's accomplishment is a signpost; it touched
the upper echelons of power, to the Senate and John McCain, his
fellow Republican.
Bush
I's fair play during the Savings and Loan scandal seems like light
years away now, having been obliterated by the crack-smoking stupor
of the Internet and EM08 housing bubbles.
“I
tried watching part of Lance Armstrong's confession, but couldn't. It
was sickening,” says Jerry. “Not because I believed in him – I
didn't. But he's just like these shithead bankers; lie, cheat, steal,
hurt innocent people, and yeah, maybe they get called a few names,
but at the end of the day, they're super rich and haven't even seen a
jail cell. But, look man, [Olympic athlete] Marion Jones went to jail
for roids. I run a red light and don't show up, the book gets thrown
at me. But Armstrong and bankers get to keep all of that stolen
money? He and bankers don't have to go to jail?”
“And
we wonder what's wrong with our country.”
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