Blog on the Run: Reloaded

Friday, June 15, 2012 7:42 pm

Calling Wells Fargo out

Filed under: Odds 'n' ends — Lex @ 7:42 pm
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I don’t think I’ve ever met George Hartzman in real life — and I apologize to him if I have and don’t remember. In the local blogosphere, he runs the Triad Watch blog, with a related Facebook group of which I am a member for reasons that date back to my social-media work at the News & Record. He also has a personal blog.

George has filed a complaint with the N.C. Securities Division against Wells Fargo, alleging violations of Sarbanes-Oxley. That would be the same Wells Fargo for which he currently works.

I’ll let you read it for yourself. But my gut reaction is that there are two and only two possible explanations for his doing so.

1) He is delusional.

2) He is, whether right or wrong, stone-cold certain he has caught his employer violating the law, has tried to work within the company to have the violations corrected and has failed to do so, and is pursuing the only avenue he sees left to protect his clients’ interests.

If the correct answer turns out to be No. 2, I’m not sure how he even gets in his car every morning, what with those big, brass balls clanking around and all.

(h/t: Ed)

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Tuesday, November 29, 2011 8:25 pm

Theft baked in

Fraud and conspiracy were written into the computer code that handled mortgage foreclosures, reports Matt Stoller at New Deal 2.0 (h/t Fec):

The same banks that ran the corrupt home mortgage securitization chain are now committing rampant fraud in the foreclosure crisis. Here’s New Orleans Bankruptcy Judge Elizabeth Magner discussing problems at Lender Processing Services, the company that handles 80 percent of foreclosures on behalf of large banks (emphasis added):

In Jones v. Wells Fargo, this Court discovered that a highly automated software package owned by LPS and identified as MSP administered loans for servicers and note holders but was programed to apply payments contrary to the terms of the notes and mortgages.

The bad behavior is so rampant that banks think nothing of a contractor programming fraud into the software. This is shocking behavior and has led to untold numbers of foreclosures, as well as the theft of huge sums of money from mortgage-backed securities investors.

Here’s how the fraud works: Mortgage loan notes are very clear on the schedule of how payments are to be applied. First, the money goes to interest, then principal, then all other fees. That means that investors get paid first and servicers, who collect late fees for themselves, get paid either when they collect the late fee from the debtor or from the liquidation of the foreclosure. And fees are supposed to be capitalized into the overall mortgage amount. If you are late one month, it isn’t supposed to push you into being late on all subsequent months.

The software, however, prioritizes servicer fees above the contractually required interest and principal to investors. This isn’t a one-off; it’s programmed. It’s the very definition of a conspiracy! Who knows how many people paid late and then were pushed into a spiral of fees that led into a foreclosure? It’s the perfect crime, and many of the victims had paid every single mortgage payment.

(That would be the same Wells Fargo that just took over all the branches of Wachovia, which had been a venerable institution in this state for decades.)

A prediction: No one will go to prison for this. That’s because a federal bankruptcy judge is waving a red flag, banging on a fire alarm and yelling, “Fraud! Fraud!” and the Justice Department is doing exactly jack squat. IANAL, but I could run the Justice Department better than Eric Holder. In fact, my kitchen table could run the Justice Department better than Eric Holder.

Friday, June 3, 2011 11:46 am

But deficits are shiny!

Your liberal media:

Major U.S. newspapers have increasingly shifted their attention away from coverage of unemployment in recent months while greatly intensifying their focus on the deficit, a National Journal analysis shows.

The analysis — based on a measure of how often the words “unemployment” and “deficit” appear in major publications — portrays a dramatically shifting landscape of coverage over the past two years, as the debate over how to fix the federal deficit has risen to prominence and the question of how to handle still-high unemployment has faded from the media’s consciousness.

Yes, large deficits are a serious problem. But they’re a serious problem in the longer-term. Yes, they could cause inflation. But the interest rate on 10-year Treasuries has fallen a full half a point recently, indicating that the markets see no evidence of inflation coming anytime soon.

Meanwhile, tens of millions of Americans are out of work or badly underemployed. They’re experiencing real human misery right now, today. And the Serious Journalists, economically illiterate and morally bankrupt, couldn’t give less of a damn.

One last thing: This isn’t a failure of reporters. Failures this big require the complicity, if not the direction, of editors and publishers.

UPDATE: Wells Fargo thinks Americans just need to get used to 9% unemployment. I think it’s about time Americans told Wells Fargo to get used to doing business without FDIC insurance. Bitches.

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