Obama Admin Knew About Bank Foreclosure Fraud, Did Nothing About It

If true, this is awful:

Consumer advocates and lawyers warned federal officials in recent years that the U.S. foreclosure system was designed to seize people's homes as fast as possible, often without regard to the rights of homeowners.

In recent days, amid reports that major lenders have used improper procedures and fraudulent paperwork to seize properties, some Obama administration officials have acknowledged they had been aware of flaws in how the mortgage industry pursues foreclosures.

But the officials said they could take only limited action to address the danger. In part, this was because they wanted lenders' help carrying out federal programs to modify mortgages that had fallen into default or were poised to do so.

New concerns about improper practices - such as those involving faked documents or "robo-signers" who signed tens of thousands of documents without reviewing them - have prompted the mortgage servicing arms of the country's largest banks to freeze millions of foreclosures. As momentum builds for a national moratorium, the administration has begun assessing the potential impact, examining the threat it could pose for the ailing housing market and the wider financial system.

There is no evidence so far that the specific abuses made public in the past few weeks were known to government officials. Nor is it clear whether they were aware that the process of the selling and reselling of mortgages among financial firms - which became extremely common and highly profitable during the housing boom - was raising legal questions about who actually owned the loans and had the right to foreclose if they went bad.

But government officials were told repeatedly that the mortgage servicing industry was deeply troubled, according to administration officials, consumer advocates, housing lawyers and congressional aides.

"Have we talked to them about servicer incompetence? Repeatedly. Have we talked to them how the servicer system is broken? Yes," said Ira Rheingold, executive director of the National Association of Consumer Advocates. "Have we talked to them about the costly stream of errors made by servicers? Yes."

In meetings and letters to the government, consumer advocates and lawyers accused the servicer industry of violating its agreements with the government to help slow foreclosures, saying it instead was structured to accelerate the foreclosure process.

"The message was that servicing needs to be regulated, and that the existing regulators of the servicers need to be on the job and needed to look at what has happened in the servicing industry," said Julia Gordon, a lawyer with the Center for Responsible Lending. "If it had been mandatory for servicers to engage in some kind of evaluation of the loan prior to foreclosure, you'd have seen a much different outcome for many borrowers."

Just more Change We Can Believe In from the man who wrote "The Audacity of Hope."

Given the record of the man and his administration, however, there is nothing to be hopeful about.

Not regarding him, at any rate.

Bloomberg and Klein Claim RttT Award "Vindicates" Their Education Policies

Seriously, that's what they said in a statement:

Mayor Michael R. Bloomberg and Schools Chancellor Joel I. Klein said in a statement that the awarding of the money was a vindication of their efforts.

“This win is a testament to what we’ve accomplished in the New York City schools over the last eight years, and we are going to work with our teachers and schools to raise the bar once again,” Mr. Bloomberg said in a statement.

Chancellor Klein said: “Race to the Top has been a tremendous catalyst for precisely the kind of education reform we’ve supported and implemented in New York City; now it is up to all of us to live up to this commitment and continue the important work that got us here.”

They used phonied test scores to rave about how they had closed the achievement gap between white and Asian students and black and Hispanic students.

That gap stands larger now than before they took over.

Same for the gap between students in schools with higher income populations and students in schools with lower income populations.

Meantime they close hundreds of schools, reopen them as charters but only take the cream of the crop into those schools while shunting the rest off to neighborhood schools which themselves are eventually declared "failing" and closed.

And the three card monte game of school closures continues ad infinitum, though somehow Bloomberg and Klein, now running the system for almost ten years, never take the blame for any of it.

And Bloomberg and Klein say the failed policies they have been pushing have been vindicated by their education deform cronies from the Gates and the Broad Foundations in the Obama administration handing them money for more of the same failed reforms?

Please.

The RttT boondoggle will be about as successful in education as Obama's HAMP mortgage plan has been at saving people from foreclosure.

Or his stimulus package has been at reducing the unemployment and underemployment rates.

Or his economic team has been at getting the economy revving again.

Or his foreign policy team has been at winding down the war in Afghanistan (now the longest war in U.S. history - even longer than Vietnam.)

Seriously, when the president has failed at almost everything else he has touched policy-wise, why should it be any different in education?

But the shills in the papers and on TV and at the ed deform blogs will wave their pom-poms and parrot the Bloomberg/Klein press releases.

Just wait until all of the children unfortunate enough to be in school during the Bush/Obama/Bloomberg years come of age.

Obama Is Sticking With The Failed Mortgage Program

Jesus, Obama really is as stupid and stubborn as George W. Bush:

Policymakers will likely keep mortgage rates low for the next several years because it's the best and cheapest way to heal the housing market, a senior Obama administration official hinted on Wednesday.

In a nearly hour-long, wide-ranging interview with a small group of reporters from various publications, the senior official, who spoke frankly on the condition of anonymity:

* Defended the administration's lackluster foreclosure-prevention initiatives, arguing that a million struggling homeowners benefited from a temporary period of lower monthly payments even though they may ultimately lose their homes;

* Acknowledged that one success for the administration has been its role in lengthening the foreclosure process, despite the risks it poses to the stability of the housing market;

* Said that home prices will likely decline in the near future; dismissed concerns that low interest rates may lead to another asset bubble as investors chase ever-higher returns, and instead encouraged such risk-taking because it will benefit the economy;

...

# Said that most of the unemployed are jobless because of the boom-bust nature of the business cycle, but that the jobless rate could remain high for the foreseeable future if the unemployed lose critical skills due to long spells of joblessness;

Wow. Wow. I mean wow.

The Obama administration DOESN'T care that the mortgage relief program ISN'T helping homeowners, all they want to do is stretch out the rate of foreclosures to keep housing prices from falling even more when a bunch of foreclosed properties hit the market all at once.

Is that the change we can believe these people sold on the campaign trail?

Vote for Obama, he'll extend the foreclosures out while sticking hundreds of thousands of troubled mortgage holders with a few more months of extra payments before they ultimately lose their homes!

Gee, I don't remember hearing that on the campaign trail?

But that's exactly the plan.

And the worst part is, IT'S NOT ACTUALLY WORKING.Here is another participant at that briefing, Mike Konczal on that:

- They are sticking by HAMP. The narrative seemed to change from helping homeowners to spacing out the foreclosures. I asked them to repeat it, because the idea that billions of taxpayer dollars are being spent to smooth out foreclosures for banks struck me as new narrative – it’s explicitly extend-and-pretend, and also fairly cynical.

- There was talk about how fiscal policy can’t move through Congress. I asked them about only 0.5% of HAMP being spent and how that could be used without Congress’ permission. Before I suggested that the remainder of the $50bn be divided into two funds, the Digging Holes Across States (DHAS) fund and the Filling Holes Across States (FHAS) fund, two far more socially productive means of spending the HAMP money than what is currently being done with it, I was told that the entire $50bn is expected to be spent by the time the program is over. I didn’t believe it; we will see.

- Overall, there seemed to be a sense of “we are done here” from the meeting. Maybe it was the fact that it is August, the informal manner of the meeting and a news cycle is driven by insane things, but there was a sense with the financial reform bill passed, deadlock in Congress and a Federal Reserve tip-toeing around its mandate things were going to slow down and options are more or less removed from the table. Which is a very scary thought with the economy the way it is.

They REALLY, REALLY have NO FUCKING CLUE how to deal with either economy or the housing problem.

Here's Atrios' reaction to the Obama "plan":

Really fucking unbelievable. As I think I said to Mike at Netroots Nation, if HAMP is actually a program designed to boost the housing market and funnel money several billion more dollars to banks, it's also a really fucking horrible and stupid and inefficient way to do that even without the "screwing people over" part.

Indeed.

These are very stupid, very arrogant, very stubborn morons in the administration and the head guy seems to be the most stupid, most arrogant and most stubborn.

Where's The Accountability On The Mortgage/Foreclosure Crisis?

President Accountability has vowed to hold teachers accountable like nobody else ever has.

Fair enough.

But as a teacher, I have decided to turn the tables and hold HIM accountable like few have.

Yesterday I looked at the economic mess we currently have with unemployment wavering between 9.5%-10%, underemployment at almost 19%, GDP for Q2 now expected to be revised down to 1.2% or lower, and jobless claims rising while economic activity is falling.

For an administration that vowed to have unemployment down to 8% and the economy revving by 2010, this record they have on the economy seems like a MISERABLE failure.

Yet rather than take any of the blame upon himself, or God forbid, actually change course and do something DIFFERENT (i.e., not listen to the two buffoons who got us here - Larry Summers and Treasury Timmeh Geithner), he has doubled down on the failed strategies, blamed Bush for the continuing mess (even though he's been gone for almost two years) and when that hasn't worked, blamed teachers and schools for the economic crisis.

Today I would like to take a look at the housing foreclosure/mortgage crisis and see how he is performing there.

Here's the latest news on foreclosures:

If you're waiting for relief on the foreclosure front, keep waiting. RealtyTrac says foreclosure notices rose 4% last month, the 17th straight month filings have exceeded 300,000. And RealtyTrac's Rick Sharga tells MarketWatch News Break that foreclosures may not peak until 2011.

Foreclosures not peaking until 2011.

Foreclosures exceeding 300,000 for 17 straight months.

Hmm - that would be the entire time President Accountability has been in office.

300,000 multiplied by 17...let's see, that would equal 5,100,000 foreclosures in the time President Accountability has been in office.

Now how long has the Obama mortgage relief program been in action and how has it been faring?

Well, the plan was unveiled in March of 2009 by President Accountability himself:

PHOENIX — Seeking to tackle “a crisis unlike any we’ve ever known,” President Barack Obama unveiled an ambitious $75 billion plan Wednesday to keep as many as 9 million Americans from losing their homes to foreclosure.

Announcing the plan in Arizona — a state especially hard hit by the housing crunch — Obama said that turning around the battered economy requires stemming the continuing tide of foreclosures. The housing crisis that began last year set many other factors in motion and helped lead to the current, widening recession.

“In the end, all of us are paying a price for this home mortgage crisis,” Obama said at a high school outside Phoenix. “And all of us will pay an even steeper price if we allow this crisis to deepen.”

...

Obama’s plan aims to keep between 7 million and 9 million people from foreclosure. Of the nearly 52 million U.S. homeowners with a mortgage, about 13.8 million, or nearly 27 percent, owe more on their mortgage than their house is now worth, according to Moody’s Economy.com.

Headlining Obama’s plan is a $75 billion Homeowner Stability Initiative, which would provide a set of incentives to mortgage lenders in an effort to convince them to help up to 4 million borrowers on the verge of foreclosure. The goal: cut monthly mortgage payments to sustainable levels, defined as no more than 31 percent of a homeowners income. Funding would come from the $700 billion financial industry bailout passed by Congress last fall.

Another key component would specifically help those said to be “under water” — with dwellings whose market value have sunk below the principal still owed on the mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 million to 5 million families do just that — if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac.

OK, that was the plan. Announced in March, help 7 to 9 million people to stave off foreclosure. Sounds good.

Now how has it fared?

President Obama's plan to help the 11 million Americans whose homes are underwater isn't working, according to a new report that will be released tomorrow on Capitol Hill by the Congressional Oversight Panel. The plan called for banks to adjust mortgages for homeowners paying more for their homes than they're worth, but most aren't receiving the help they requested. Legislators are already demanding that the big banks to do more, but today, four of the nation's largest banks pushed back.

Citigroup, Bank of America, Wells Fargo, and JP Morgan questioned why they should reduce mortgages for those in over their heads. A JP Morgan representative pointed to the pricetag, saying it would cost $900 billion to help every underwater homeowner.

Middle class advocates say the banks could afford to help more Americans, whose tax dollars helped save the financial industry during the economic collapse. Advocates say no one is asking the banks to adjust every mortgage, and so far, evidence shows that banks haven't adjusted many mortgages at all.

Of the more than 1.1 million homeowners who signed up for mortgage help through the president's adjustment plan, only 170,000 have had their mortgages permanently adjusted. Experts say that's a dismal performance.

Gee - it's not working at all, is it? Just 170,000 mortgages permanently adjusted out of the 1.1 million who signed up for the program.

That's not a very good record at all.

But what happened to those who signed up for the Obama program but ultimately got no relief?

President Barack Obama's signature plan to combat the housing crisis has fallen short of its goals -- rather than significantly and permanently reducing home foreclosures, it is only delaying them.

The administration unveiled its Making Home Affordable plan in February 2009. Obama vowed in front of an audience gathered at Dobson High School in Mesa, Ariz., that MHA's signature effort, the Home Affordable Modification Program, would "enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure."

The $75 billion initiative -- $50 billion from the bank bailout, $25 billion from government-owned mortgage giants Fannie Mae and Freddie Mac -- was designed to induce lenders, servicers and investors to modify distressed mortgages through a series of cash incentives.

It's not working.

In its first year, 1.5 million people were invited to try HAMP. About 40 percent of those who tried it have been kicked out of the program; fewer than that have been given an actual shot at keeping their homes.

When President Obama took office, it took an average of 319 days to complete a foreclosure, according to Jacksonville, Fla.-based data provider Lender Processing Services. Now it takes 461 days.

Extending the process by which homes enter foreclosure allows banks to continue carrying the loans on their books at full value, delaying loss recognition. That allows unhealthy banks to appear healthy, staving off costly bank failures.

Oh, so it helps out the banks but not the homeowners!

I got it now.

Just another Change We Can Believe In Obama program that is corporate-friendly and corporate-approved.

But still I want to know what HAPPENS to those who enter the program, get their mortgages extended for a while but then wind up being foreclosed upon anyway?

A Year Into HAMP, 'We're Losing Our Home'

Bea and Terry Garwood applied to JPMorgan Chase for HAMP help in April 2009 and were approved for a "trial" modification that July because they met the core requirements: their house payments took up more than 31 percent of their monthly pre-tax income; they lived in their home; they owed less than $729,000; and they were at risk of default. Garwood says the HAMP trial reduced their monthly payment on their two-story home in Pinckney, Mich., by nearly $500 to about $1,175 -- a huge relief, she adds.

A HAMP trial is supposed to become "permanent" after three months, but Garwood's dragged on for nine. "They kept on saying a bank statement was missing, or one of the documentations wasn't signed, or they didn't have the affidavit, or the hardship letter," Garwood says. "And then on March 19, I received a letter saying, 'You do not qualify for a permanent modification. You now owe us $12,000.'"

Chase rejected the Garwoods for two reasons, according to the letter Garwood received: The bank claimed their monthly mortgage payment amounted to less than 31 percent of their income and they failed HAMP's opaque "Net Present Value" test, a complex Treasury Department formula that servicers use to determine if a modification will make investors more money than a foreclosure. Garwood says that Chase assumed they had an inflated income by looking at deposits to their bank account and ignoring the money paid out to the people who work for her husband, a roofing subcontractor. If Chase went by the Garwoods' tax forms, she claims, the bank would realize they make thousands of dollars less every month and the couple would qualify for a permanent modification. Chase declined to comment.

Garwood says that the difference between their reduced payments during the trial period and what they would have paid otherwise, plus late fees, is $12,000. She says they can't possibly afford it all at once but that they would have found a way to make full monthly payments if they hadn't been lured into HAMP. They stopped making payments in April, shortly after they were turned down for a permanent modification. Sheriff's sales have been set for June, July, and now August. Garwood says she thinks she may be able to continue to dodge the foreclosure for a little while longer, but she's not exactly grateful for the extra time.

"They told us we were a great candidate, so we went for it," she says. "And as a result we're losing our home."

Wow - so those folks might have actually kept their home had they NOT entered into the Obama administration's HAMP program, but since they did and since the program is so badly devised and badly run, they are LOSING their home instead.

This is an absolutely ABYSMAL record on fixing the foreclosure problem.

The Obama administration would have been better DOING NOTHING than starting the HAMP program and other administration efforts that have made matters WORSE for homeowners, though they certainly helped out the banks, especially the ones with lots of bad mortgages on their books.

Perhaps that was the point of the program in the first place?

In any case, on both the economy (unemployment, GDP) and the foreclosure problem, the Obama administration and President Accountability have been MISERABLE failures.

And yet, no accountability for the accountability-meisters in the accountability administration.

Just more jive, more lies, more excuses and of course more threats sent the way of teachers.

But accountability is coming soon.

Oh yes it is.

And if the GOP nominates somebody moderately sane in 2012 like Pawlenty, Romney or even Huckabee, President Accountability is going to be voted out of a job and be sent back to the ranch in Crawford to pick brush with Bush.

Where's The Accountability At HUD?

President Accountability proudly told the National Urban League that he will personally hold every single teacher across this land accountable for the test scores of their students.

He said it's the least he can do as a citizen, a president and a parent.

Of course his kids attend swanky private schools, so what his parenthood has to do with public education or public school teachers is beyond me.

Nonetheless the buzz word for the Obama education policy is ACCOUNTABILITY.

But many political observers have been calling for some accountability for the Obama administration's piss-poor housing policy that has done little to alleviate the foreclosure crisis and lots to make it worse.

So some House Democrats have decided to make their displeasure with the president's policies known:

The House will vote Thursday on a measure to strip the travel budget of President Obama’s housing secretary.

The measure is sponsored by Rep. Dennis Cardoza (D-Calif.), who weeks ago called for Housing and Urban Development Secretary Shaun Donovan’s resignation over what he and other California members believe has been the administration’s subpar response to the housing and foreclosure crisis that has crippled the state’s housing market.

Cardoza’s California district is one of the hardest hit in the country by the housing crisis.

If the measure passes, it would be a shot across the bow against the Obama administration’s handling of the foreclosure crisis.

Donovan will meet Thursday morning with Cardoza and other members of the Congressional Hispanic Caucus, where he was expected to receive a verbal berating by Democrats representing districts with disproportionately high home foreclosure rates.

And why are people pissed off at the HUD secretary and President Obama over the housing crisis?

Take a look here:

WASHINGTON — More than three years into the housing crisis that helped trigger a worldwide recession, the torrid pace of home foreclosures continues to tear at the core of the American dream.

...

In the first half of 2010, more than 1.6 million U.S. properties were hit with foreclosure filings, which include bank repossessions, default notices and auction sale notices. That's up 8 percent from the first six months of 2009 and puts the U.S. on pace to top 3 million filings this year. That includes more than a million bank repossessions, and while sub-prime borrowers and bad loans led the surge in foreclosures in 2008 and 2009, this year's wave comes from homeowners who've lost their jobs.

The numbers reflect the widespread and continued fragility of local housing markets amid what's largely a jobless recovery. They also raise questions about the effectiveness of programs designed to fight foreclosures, such as the Obama administration's Home Affordable Modification Program.

...

From the Bush administration's HOPE for Homeowners program to the TARP-funded HAMP program, community groups, consumer advocates and homeowners themselves say anti-foreclosure programs have been largely ineffective because banks don't have a strong incentive or mandate to modify loans that favor them financially.

Government officials envisioned the Home Affordable Modification Program helping 3 to 4 million homeowners avoid foreclosure by 2012. Borrowers who receive permanent modifications of their home loans under HAMP save a median of 36 percent — about $510 per month — off their original mortgage payments.

However, of more than 3.1 million eligible delinquent loans, only 389,000 have been modified permanently, according to the most recent government figures. Another 364,000 loans are in trial, or temporary, modification plans that could become permanent, but critics say that seldom occurs. More than 520,000 of these plans ended up being cancelled.

In a recent survey of 53 California mortgage counselors with caseloads of more than 14,000 homeowners, 60 percent said they had clients who lost their homes to foreclosure while they were working with a loan servicer to enroll in the HAMP program.

People try and navigate a bureaucratic mess to get into the program and get their mortgages modified.

The banks get a few more months of payments while people are trying to get into the program.

But then the banks foreclose upon them before they are approved and they lose their homes anyway.

How's that for change we can believe?

How's that for competence?

It sucks.

Totally sucks.

And instead of fixing the HAMP program and firing the people who created it, the administration tries to hide the data and run jive ass public relations briefings for housing reporters to get them to stop criticizing the program.

Now is that the kind of accountability we want to see from President Accountability and his administration?

Nope.

Certainly that's not the type of accountability he bragged about using on teachers today.

I've said for a long while now, if the Obama administration were a high school in Rhode Island, it would have been put on the SURR list and set up for "turnaround" as part of the Race to the Top program.