Fed, Rates and Sun
New York Times - August 22, 2014, by Victoria Shannon - Sun and a little fun mixed with speeches are the hallmarks of...
New York Times - August 22, 2014, by Victoria Shannon - Sun and a little fun mixed with speeches are the hallmarks of the annual retreat of central bankers in Jackson Hole, Wyo.
But today was the first time participants could remember demonstrators showing up.
Protesters with green T-shirts reading “What Recovery?” were organized by the Center for Popular Democracy, a nonprofit group, to greet the bankers at their resort hotel.
“The demonstrators want to remind Fed officials, who tend to deal in abstractions, that real people are affected by their decisions,” says our Fed correspondent, Binyamin Appelbaum.
“Their presence has been mentioned repeatedly by Fed officials and speakers, suggesting that it has made an impression.”
Notably, the Fed chairwoman, Janet L. Yellen, stopped by to express sympathy. In a speech today, she said the central bank needed more evidence of growing employment before deciding when to raise interest rates.
“Historically, particularly during the 1980s, the Fed faced a lot of public pressure as it raised interest rates,” Mr. Appelbaum says, “so this may be the first sign of things to come.”
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Los trabajadores latinos quieren que la Fed les oiga
Lo cierto es que pese a la mejora económica la tasa de desempleo de latinos (6.8%) y negros (9.1%) es más elevada que...
Lo cierto es que pese a la mejora económica la tasa de desempleo de latinos (6.8%) y negros (9.1%) es más elevada que la de los blancos (4.6%) y asiáticos (4%) y muchos de ellos trabajan por sueldos muy bajos. Muchos de ellos, como Rubio no sienten la recuperación. “Yo paso por los bares y los veo llenos incluso los lunes pero no todos podemos hacer eso, yo no”, explica.
Su inquietud por los más desfavorecidos le ha llevado a integrarse en la asociación comunitaria Make the Road para ayudar a los trabajadores, muchos de ellos latinos, de forma diferente a como lo hacía en su país. Desde hoy está en Jackson Hole, Wyoming, donde se reunen economistas de todo el mundo y representantes de bancos centrales para hablar de política monetaria. Rubio forma parte de un grupo de trabajadores y asociaciones de base de todo el país, en las que hay representación latina, que quieren convencer a la Reserva Federal de que no suba las tasas de interés. Su argumento es que si se quedan bajas como ahora “ayudarán a mejorar las condiciones laborales y crear más empleo”.
Rubio dice que la recuperación no ha llegado a los trabajadores como ella y que por eso no es momento de empezar a subir unas tasas que reconoce que están históricamente bajas(0%-0.25% desde diciembre de 2008) para estimular el crecimiento durante la reciente Gran Recesión.
“Lo que decide la Fed nos atañe a todos”, explica con convicción Rubio antes de hablar de la fuerte desigualdad laboral que hay y el hecho de que apenas hay inflación, motivo por el que no debería haber prisa por subir tasas o como dicen los economistas, normalizarlas. El programa de Jackson Hole y la lista de asistentes se hace público por el organizador de este encuentro anual, la Reserva Federal de Kansas City, hoy mismo pero ya se sabe que la presidenta de la Fed, Janet Yellen, no va a asistir. Rubio espera estar en algunas reuniones con parte de los asistentes.
“Uno piensa que no les van a ver pero ha veces que hay que pedir y abrir un caminito”, dice.
De hecho, Rubio, junto con otros trabajadores y activistas, ya se reunió este mismo mes con el presidente de la Reserva Federal de Nueva York, William Dudley. Según esta hondureña les dio la razón cuando se planteó la existencia de una desigualdad laboral y que no hay empleo para todos. Dudley dijo que dada la situación económica fuera de las fronteras la necesidad de subir las tasas es ahora “menos imperiosa”.
Ady Barkan, abogado del Centro de Democracia Popular que está impulsando la campaña “Fed Up” y estas peticiones ante la Reserva, explica que es necesario que las autoridades monetarias “presten atención a los trabajadores”.
“La economía no se ha recuperado, hay mucho desempleo entre negros y latinos, subempleo, baja participación en el mercado laboral y apenas hay subidas de salarios”, resume Barkan. Este abogado cree que la economía necesita tasas bajas para que las empresas sigan invirtiendo de forma barata y que haya préstamos asequibles que reactiven el consumo de todos.
Lo cierto es que las empresas tienen cash y algunos tipos de préstamos como los hipotecarios no han remontado lo esperado. “No obstante, si las tasas suben la situación será peor”, explica Barkan, “porque las empresas tendrán más motivos para quedarse sentadas en sus montañas de cash si tienen rendimiento de ellas y por que para invertir necesitan una inflación que no hay, ni habrá si suben tasas”.
“La economía tiene que calentarse un poco más”, dice. Barkan admite que las tasas bajas no son suficientes y que sería bueno que el Congreso hiciera algo además de subir el salario mínimo.
Representantes de la campaña de Fed Up ya se han reunido con Yellen y presidentes de otras reservas como la de Kansas, San Francisco y Atlanta entre otras, miembros de la Federal.
Dean Baker co director del Center for Economic and Policy Research de Washington publicaba recientemente que la subida “reducirá ingresos y oportunidades para quienes menos tienen”, una posición que también comparte el nobel de economía, Joseph Stiglitz.
¿Cuál es la misión de la Reserva Federal?
La Reserva Federal o Fed es uno de los reguladores de la banca y la autoridad que tiene en sus manos la política monetaria, es decir, regula la cantidad de dinero en circulación. ¿Su misión? Asegurarse de que se creen las condiciones de crédito y monetarias para conseguir el máximo empleo, precios estables (ni inflación ni deflación) y tasas de interés a largo plazo moderadas.
¿Cómo funcionan las tasas?
La Reserva Federal sube las tasas de interés a corto plazo, el dinero que se prestan los bancos entre sí, para retirar dinero del mercado y evitar las subidas de precios o inflación. Cuando las baja es porque los precios están bajos y falla el consumo. Al bajarlas se pone más dinero en circulación lo que, en teoría, animando la economía. Estas tasas a corto terminan reflejándose en las de largo plazo que son las que se usan en hipotecas y otros préstamos que se usan para comprar e invertir. Cuanto más se invierte y más crece la economía más y mejor trabajo se crea.
Source: La Raza
Protest Calls for Fed to Focus on Employment
St. Louis Public Radio - March 5, 2015, by Maria Altman - What recovery? That was the question being asked Thursday by...
St. Louis Public Radio - March 5, 2015, by Maria Altman - What recovery? That was the question being asked Thursday by a small group of activists outside the Federal Reserve Bank of St. Louis.
About a dozen protesters called on the Fed to focus on unemployment, especially among minorities, rather than on keeping inflation rates low. They said if the Federal Open Market Committee raises the interest rate this year, as anticipated, it would likely mean fewer jobs.
"We’re calling on the Fed to do the right thing by most people, because the people they’re helping by changing the policy is a very small minority people and a very influential and affluent group of people," said Derek Laney of Missourians for Reform and Empowerment.
The protest was one of several held at Federal Reserve Banks around the country to highlight a new report by the Center for Popular Democracy and the Economic Policy Institute. The report calls on the Fed to focus on “full unemployment,” and highlights disparities between white and minority unemployment levels.
In Missouri last year the unemployment rate for African-Americans was 14.4 percent, while the rate for whites was just 5.1 percent, according to the Bureau of Labor Statistics. Several of the protesters, who represented a variety of local groups, including MORE, the Organization for Black Struggle, Veterans for Peace, Pro-Vote and Young activists United STL, had personal stories of being out of work and struggling.
Reginald Rounds with MORE said he had recently gotten a bachelor’s degree but still couldn’t find work.
"There is no recovery in the community in which I live," said Rounds. "I talked to many people in different organizations and churches throughout the city as we worked on the Don’t Shoot Coalition. It’s my personal belief that a lot of things that happened in Ferguson just boiled over from all the tensions of unemployment, job creation, housing and our educational system."
The Federal Reserve Bank of St. Louis said in an emailed statement that officials reached out to protesters on Wednesday and asked them to meet to discuss the report.
"The Fed has a dual mandate to keep inflation low and stable and to foster maximum sustainable employment. It takes these responsibilities very seriously," said Karen Branding, senior vice president of public affairs, in the statement.
Washington University economist Jennifer Dlugosz said the Fed has good reason not to focus too tightly on lowering unemployment levels.
"We know from macroeconomics that if the Fed tries to push the rate of unemployment below the natural rate, which people think is 5.5 percent, that it wouldn’t work and that it would just accelerate inflation," she said.
Dlugosz, who previously worked for the Fed’s Board of Governors in Washington, D.C., said monetary policy is not the right tool to address unemployment disparity. Instead, she said, targeting labor market and education policies to create more equality would likely have better results.
The report also took aim at the Fed’s transparency, especially in choosing the board of directors for each of the 12 Federal Reserve Banks. The protesters argued too many corporate and bank executives take those positions, including in the Federal Reserve Bank of St. Louis’ board of directors.
"It’s basically bankers, and that’s in the charter, and there’s whole bunch of other folks who could be from labor and working people, but are instead from big corporations," said Jeff Ordower of MORE.
The board of directors in each of the Federal Reserve districts is responsible for choosing the president of the Reserve Banks. Those presidents rotate onto the Federal Open Market Committee, which meets eight times a year and decides the nation’s monetary policy. (Learn more about how it all works here on the Federal Reserve Bank of St. Louis' website.)
In her statement, Branding said the Fed was designed by Congress to “represent the voice of Main St."
"At the St. Louis Fed we have significant dialogue with business leaders, community development organizations, educators and the public,” she wrote. “We have a diverse board of directors who are familiar with economic and credit conditions in the district.”
Professor Dlugosz said the make-up of the boards is somewhat limited by statute. Each district’s community bank members choose three bankers to sit on the board and three non-bankers. The other three directors are chosen by the Fed’s Board of Governors in Washington, D.C, and are supposed to represent a mix of labor, agriculture, industry, and consumers.
Dlugosz said the last group, known as “Class C,” is the most likely group to represent the interests of the public, since they’re appointed by the Board of Governors.
"That’s really, I’m guessing, the main place where you’re going to see heads of labor unions or consumer advocates. If they’re getting on there, I imagine it’s the Board that’s electing them," she said. "I don’t know if that’s changed over time, but one would hope that they’re keeping an eye on it."
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Dying to Entertain Us: Celebrities Keep ODing on Opioids and No One Cares
Dying to Entertain Us: Celebrities Keep ODing on Opioids and No One Cares
Repeating the success of the Ryan White Act on the opioid front would require a massive advocacy movement in the coming...
Repeating the success of the Ryan White Act on the opioid front would require a massive advocacy movement in the coming years. Longtime activist Jennifer Flynn Walker, director of mobilization and advocacy at the Center for Popular Democracy, argues that with a continued accumulation of grassroots organizing against the epidemic, such a corps of foot soldiers could harness the publicity generated by a future celebrity overdose and channel it into considerable progress.
Read the full article here.
A Terminally Ill Progressive Activist Confronted Jeff Flake About The Tax Bill On A Flight
A Terminally Ill Progressive Activist Confronted Jeff Flake About The Tax Bill On A Flight
A leading progressive activist with Lou Gehrig’s disease appealed to Sen. Jeff Flake (R-Ariz.) to reconsider his...
A leading progressive activist with Lou Gehrig’s disease appealed to Sen. Jeff Flake (R-Ariz.) to reconsider his support for the Republican tax bill during a flight to Phoenix on Thursday.
“I need you to make your vote match your principles, senator. And for the rest of your life, you will be proud if you vote this bill down,” said Ady Barkan, founding director of the Fed Up campaign, a group backed by the Center for Popular Democracy that pushes the Federal Reserve to set monetary policy that favors workers.
Read the full article here.
U.S. job growth surges in July
U.S. job growth surges in July
The U.S. economy added 209,000 jobs in July, according to government data released Friday morning, surpassing...
The U.S. economy added 209,000 jobs in July, according to government data released Friday morning, surpassing economists' expectations and suggesting the economy continues to thrive after an extended streak of job gains in recent years.
The unemployment rate ticked down to 4.3 percent, compared with 4.4 percent in June, and wages rose by 2.5 percent from the year before to $26.36 in July.
Read the full article here.
How to Help Residents of Puerto Rico and the U.S. Virgin Islands Recover After Hurricane Maria
How to Help Residents of Puerto Rico and the U.S. Virgin Islands Recover After Hurricane Maria
These organizations are helping with immediate needs—like food—and long-term efforts, including rebuilding......
These organizations are helping with immediate needs—like food—and long-term efforts, including rebuilding...
Read the full article here.
NYC Public Advocate Urges JP Morgan to Divest From Private Prison Firms Tied to Trump Agenda
NYC Public Advocate Urges JP Morgan to Divest From Private Prison Firms Tied to Trump Agenda
Public Advocate Letitia James called on JP Morgan Chase to end its relationship with two private prison companies that...
Public Advocate Letitia James called on JP Morgan Chase to end its relationship with two private prison companies that she asserted are profiting from President Donald Trump’s aggressive immigrant enforcement agenda.
Read the full article here.
Escuelas charter en Nueva York requieren mayor escrutinio
Escuelas charter en Nueva York requieren mayor escrutinio
Las escuelas independientes (charter) han proliferado en las últimas dos décadas con repetidas promesas de mejorar la...
Las escuelas independientes (charter) han proliferado en las últimas dos décadas con repetidas promesas de mejorar la calidad de la educación. Su ascenso ha sido tan rápido que hoy en día, el número de alumnos matriculados en muchas escuelas públicas está disminuyendo vertiginosamente, y se tiene previsto que en la próxima década algunos distritos pierdan hasta un tercio de sus estudiantes con relación a principios de siglo. Muchos distritos afectados por esta tendencia se están viendo forzados a despedir maestros, enfermeros y otro personal importante que apoya a los alumnos que quedan en las escuelas públicas.
La ley federal Every Student Succeeds, promulgada a fines del año pasado, no hará sino acelerar esta tendencia. Se proyecta que la ley aumentará al doble el gasto en escuelas charter durante la próxima década.
Sin embargo, a pesar de la explosión en ese sector, la supervisión se ha quedado atrás y, hoy en día, hay cada vez más motivos de preocupación. En un estado tras otro, las investigaciones han revelado mala administración, abusos y fraude descarado en las escuelas charter, incluso en aquellas elogiadas por sus buenos resultados. Una encuesta reciente de escuelas charter en todo el país realizada por el Center for Popular Democracy, descubrió que han despilfarrado la asombrosa cantidad de $216 millones desde 1994.
La ciudad de Nueva York no ha sido inmune al problema. En la extensa red de KIPP, por ejemplo, la escuela pagó casi $70,000 para llevar al personal en viajes de varios días al Caribe para fines presuntamente educativos, pero se detectaron pocas actividades de desarrollo profesional durante la estadía, según descubrió una auditoría en el año 2006.
En 2010, Joel Klein, secretario del Departamento de Educación, ordenó que la East New York Preparatory Charter School cerrara sus puertas después de que se reveló que la fundadora y directora de la escuela se había nombrado superintendente y se había dado un aumento de $60,000.
Muchas otras escuelas charter en toda la ciudad enfrentan preguntas sobre gastos cuestionables. El informe del CPD descubrió que muchas escuelas en la ciudad no documentaban sus gastos, no divulgaban casos de conflicto de intereses ni usaban licitaciones competitivas para asegurarse de comprar productos y servicios al mejor precio.
No se puede permitir que continúe esta situación, particularmente porque se tiene previsto que las escuelas charter aumenten exponencialmente en años próximos. El informe del CPD recomienda varias maneras de asegurar que los gastos de dichas escuelas se mantengan en regla, lo que incluye auditorías para detectar y evitar el fraude, y mecanismos para aumentar la transparencia de quienes operan escuelas charter.
Los encargados de dictar la política deben redoblar sus esfuerzos para promulgar medidas de supervisión incluso más estrictas y asegurar que todas las escuelas charter gasten su dinero sensatamente. A no ser que vigilemos este sector más estrechamente, en años próximos podrían desaparecer millones, perjudicando así a estudiantes y padres de familia en toda la ciudad.
By Kyle Serrette
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As Wells Fargo is Accused of Fabricating Foreclosure Papers, Will Banks Keep Escaping Prosecution?
Democracy Now - March 21, 2014 - A new internal report says the Justice Department massively overstated its successes...
Democracy Now - March 21, 2014 - A new internal report says the Justice Department massively overstated its successes in targeting mortgage fraud while in fact ranking it as a low priority for investigation. The Justice Department’s inspector general says despite playing a central role in the nation’s financial crisis, mortgage fraud was deemed either a low priority or not a priority at all. This comes as a recently revealed internal Wells Fargo document appears to guide lawyers step by step on how to fabricate missing documents to foreclose on homeowners. Wells Fargo is the country’s largest mortgage servicer and services some nine million home loans.
Transcript
This is a rush transcript. Copy may not be in its final form.
JUAN GONZÁLEZ: A new internal report says the Justice Department massively overstated its successes in targeting mortgage fraud while in fact ranking it as a low priority for investigation. The Justice Department’s inspector general says despite playing a central role in the nation’s financial crisis, mortgage fraud was deemed either a low priority or not a priority at all. In one instance, Attorney General Eric Holder claimed to have filed lawsuits on behalf of homeowner victims for losses totaling more than $1 billion, but the actual amount was 91 percent less, around $95 million.
This comes as a recently revealed internal Wells Fargo document appears to guide lawyers step by step on how to fabricate missing documents to foreclose on homeowners. Wells Fargo is the country’s largest mortgage servicer and services some nine million home loans.
AMY GOODMAN: State and federal regulators are now focusing on the allegations in the lawsuit brought by Linda Tirelli, who joins us now. She’s an attorney representing clients being foreclosed on by Wells Fargo. Earlier this month, she discovered the Wells Fargo manual on how to produce missing documents to foreclose on homeowners. She’s a partner at the Garvey, Tirelli & Cushner law firm in White Plains, New York.
In Minneapolis, we’re joined by Kevin Whelan, campaign director for the Home Defenders League, a national movement of underwater homeowners and allies who organize to keep people in their homes and demand accountability.
Wells Fargo declined Democracy Now!'s interview request, saying they're in a, quote, "quiet period" pending the announcement of their quarterly earnings.
We welcome you both to Democracy Now! Linda Tirelli, let’s begin with you.
LINDA TIRELLI: Good morning.
AMY GOODMAN: Can you describe this manual, how you got it and what it reveals?
LINDA TIRELLI: Absolutely. The manual that I have, it’s actually entitled the "Wells Fargo Home Mortgage Foreclosure Attorney [Procedure] Manual, Version 1." And it says on it that it’s last published 2/24/2012. Mind you, the national mortgage settlement agreement was announced a week prior, on 2/19/2012.
The way I obtained it, it was actually sitting right there on the Internet, of all things. A colleague of mine, through a Max Gardner’s Bankruptcy Boot Camp, which I am a member, an active member, gave it to me and said, "Hey, I found this online, and I know you’re doing a lot of Wells Fargo cases. Maybe you can use this."
Reading it, my jaw just dropped. As I see it, it’s clearly outlining procedures, not just for the $12-an-hour robo-signers that we’ve heard about all these years, but for the lawyers, who need to be held accountable to a much higher degree. It’s the manual for the lawyers to actually fabricate documents, as I see it, and request that documents that are lacking be fabricated by Wells Fargo. It’s absolutely appalling.
JUAN GONZÁLEZ: Well, you know, we’ve had on Democracy Now! a couple of times the Brooklyn Supreme Court judge, Arthur Schack, who raised a campaign over—not only over the robo-signers in many cases that he had before his court, but also over the bank officials and the attorneys who participated in this fraud. And there have been several judges in different parts of the country who have raised these issues. How do you think this advances the whole issue of going after—of having the smoking gun to go after these companies?
LINDA TIRELLI: Well, I think that judges cannot make determinations based on suspicion. OK? This is the first and only internal document that I’m aware of that clearly outlines the fraud. And that’s how I put it in my allegations to the court. And we are very, very fortunate in New York to have a number of proactive judges who get it, but unfortunately, they’re few and far between across the country. My hope is that judges as wonderful as Arthur Schack and as great as many of our federal judges—I do appear mostly in federal courts—that they will be proactive, they will take this seriously and start to question Wells Fargo on their procedures.
AMY GOODMAN: I want to read a bit from the Wells Fargo document. In this section called Note Endorsement, it says, quote, "If the blank endorsement is in the file for an original state, execute the endorsement, send the original document to the attorney, and complete the Z02 step." Can you explain what this means?
LINDA TIRELLI: Sure. I take that to mean that if there is actually an endorsement that exists, they need to endorse it. But as the party in—
JUAN GONZÁLEZ: And by "endorsement," you mean?
LINDA TIRELLI: Sign it over.
JUAN GONZÁLEZ: Oh.
LINDA TIRELLI: OK. But the question is: Do they have the authority to sign it over? Is it an authorized endorsement? Who’s signing it over? As the lawyer, I would need to know that before proceeding with a foreclosure. If it’s a document that needs to—if it was a note that needed to be endorsed, under a pooling and servicing agreement, which is followed by every securitized trust—and most of these loans, let’s face it, are owned by securitized trusts in some form or another—they should have been endorsed long before the foreclosure was ever started, at the time that it was actually acquired by the trust, or allegedly acquired by the trust.
AMY GOODMAN: So this manual talks about how to fabricate a document—
LINDA TIRELLI: Absolutely.
AMY GOODMAN: —that you don’t have, that you need.
LINDA TIRELLI: That’s how I’m reading it.
AMY GOODMAN: That Wells Fargo would need.
LINDA TIRELLI: Exactly. That’s—
AMY GOODMAN: To foreclose on the house.
LINDA TIRELLI: Exactly right. That’s exactly how I’m reading it. I’m reading it to say that it’s not just, when there is a blank endorsement, fill in the blank. But sometimes when there—there’s actually a procedure in here, as I read it, for when there’s no endorsement, OK? Go ahead and endorse the note. Just request that the note be endorsed. And that’s what we call, in our area of law, a "tada endorsement." The bank produces a copy of a note, just for example, that has no endorsement on it, and then when we ask about it and say, "Gee, this note is not endorsed to your client. How is it that you’re—you know, you’re bringing foreclosure?" and they say, "Oh, here, use this version. Tada! Now we have an endorsement." And it’s always a rubber stamp, that you or I could go to Staples and purchase for $9.95.
JUAN GONZÁLEZ: You also, one of your cases, came across a document which was purportedly from an official of Washington Mutual Bank in 2010, but Washington Mutual didn’t exist in 2010, because it had collapsed back in 2008.
LINDA TIRELLI: 2008, that’s right. That document was signed by Mr. John Kennerty in—who works for Wells Fargo, or worked for Wells Fargo at the time. And in this procedure manual, there’s actually a procedure for obtaining what’s called an assignment of mortgage, OK? So, basically, as I’m reading this procedure, it’s saying, "Gee, if you need an assignment, the attorney should request it through the document department, and then, magically, one will appear for you." And that’s exactly what we’re seeing. The people that work for Wells Fargo in these various departments, when they receive a request from an attorney, they take that as permission to actually sign something, without doing any research whatsoever. How is it, as you point out, we had anything assigned from in a company that ceased to exist two years prior? It just simply makes no sense. That document’s fabricated. And in that particular case, I will point out, the judge actually deemed that document to be a fraudulent document on record.
AMY GOODMAN: I remember when Congresswoman Marcy Kaptur was standing on the floor of the House and telling homeowners, "Stay in their homes and demand that they produce the note. Produce the note." I wanted to go to Eric Schneiderman. Last May, the New York attorney—the New York attorney general announced plans to sue Bank of America and Wells Fargo for violating the terms of a settlement aimed at curbing foreclosure abuses. The $26 billion settlement was reached in 2012 between five major banks and 49 attorneys general. It provided basic protections for homeowners, such as requiring banks to notify them about missing documents within a certain time period. But Schneiderman said the banks had violated the terms of the settlement with impunity. At the news conference in May, he lifted a massive sheaf of papers to show the hundreds of complaints issued by homeowners against the banks.
ERIC SCHNEIDERMAN: Two of the participating servicers, Wells Fargo and Bank of America, have flagrantly violated their obligations under the settlement. I’ve sent a letter to the monitoring committee, the body that oversees the implementation of the national mortgage servicing settlement, notifying them of my intention to sue both Wells Fargo and Bank of America for noncompliance with servicing standards spelled out in the settlement. This enforcement action, which is the first taken under the settlement, is based on 339 individual complaints from New Yorkers against these two banks in just the last six months
AMY GOODMAN: Linda Tirelli, can you explain what happened with this case?
LINDA TIRELLI: Yes. Well, first of all, I want to point out, and very much to Mr. Schneiderman’s credit, within four hours of the New York Post writing the article exposing this documents, within four hours, I received not only a phone call, but an email from Attorney Schneiderman’s office, and we had a long discussion about it. I also received the phone call and an email from the New York State Division of Financial Services. So I’m hoping that they are now launching new investigations.
Basically, to put—as I understand Mr. Schneiderman’s point, Wells Fargo was signing off on the national mortgage settlement agreement out of one side of its mouth. Out of the other side, they were republishing their manual to say, "Hey, we’re going to continue business as usual. All right? Throw some money at it. It’s done. Quiet down the homeowners. We’ll just continue business as usual." And that’s what we’re seeing. That’s exactly what we’re seeing.
JUAN GONZÁLEZ: Kevin Whelan, from the Home Defenders League, can you put this in a national context of the mortgage crisis? Here we are now, six years into the home mortgage crisis that crashed the entire economy.
KEVIN WHELAN: Absolutely. Thanks you for having me, very much, today. We hear, every time there is an uptick in real estate prices in some parts of the country, that the foreclosure crisis or the mortgage crisis is over. And certainly, Wells Fargo and the big banks are back to making record profits and feel like everything is great. But foreclosures are still tearing apart many communities, particularly communities of color that were targeted for predatory and subprime lending. And one in five American homeowners is still underwater, meaning they owe more on their house than the house is currently worth.
So we’ve made the banks whole without effectively curbing their abusive practices to give homeowners the runaround, to use falsified documents and to rush toward foreclosure when there’s a perfectly good way to reach a different settlement. And they’ve not done enough to make homeowners whole, including doing principal reduction that they promised to do under settlements.
AMY GOODMAN: And can you respond to this latest news about the attorney general—the office making a low priority or no priority at all going after these mortgage lenders?
KEVIN WHELAN: Yeah, absolutely. The news is no surprise to people that have been fighting foreclosure in communities around the country. We work with 25 community groups in our at-large organization, so people can come find us at HomeDefendersLeague.org and get on a phone call and learn how to start a petition and fight for their homes. And people have been, you know, in cases all over the place, trying to stave off foreclosure.
We had a family in New Jersey last month, Paulette McQueen and her 86-year-old mom, who had missed one mortgage payment in 2010, went to Wells Fargo the next month with both checks in hand, and Wells Fargo wouldn’t take their money and started a three-year campaign to take their house. That was only resolved when people in 13 cities delivered petitions to Wells Fargo’s offices around the country. And they finally got a call back and are going to work out a solution to be able to stay in their home. It was a whole week before a sheriff’s sale.
So, it’s—you know, families that are facing this know both that the housing crisis isn’t over and that nothing has happened that’s on a deep enough or broad enough scale to make the banks fearful or sorry for either the harm they’ve done, or change their behavior in fundamental ways.
JUAN GONZÁLEZ: Now, there are some localities, some local governments, that have tried—intervened themselves in trying to beat back the crisis of people being kicked out of their homes. Could you talk about some of those examples?
KEVIN WHELAN: Yeah, there—one thing that’s—we know there’s something to it, because the banks, led by Wells Fargo, are especially panicked and angry about the solution. But in Richmond, California—I think you had the mayor of Richmond, Gayle McLaughlin, on the show before—has been a city that’s led the way—and many more are going to follow—to enact principal reduction, meaning resetting loans to their current market value on the local level. And this is exciting because, while these federal agencies, like the Justice Department, are too often captive of the big banks, people can use democracy and win on the local level sometimes.
The concept for this particular program is that cities would work with other investors to buy the loans at their fair market value on the secondary market, which is pennies on the dollar of what these underwater loans are worth, and help refinance homeowners into new loans that have equity. And this is a concept that has gotten started in Richmond, but people are meeting even today in different cities around the country to spread this. And I think, not so much because it would cost them money as because it’s a chance for people to use the rule of law and democracy to impact the economy and impact banks’ behavior, banks like Wells Fargo have sued, unsuccessfully, and made all kinds of threats about redlining communities in order to try to stop it. People can go to FightingForeclosures.org and learn more about that particular plan and get involved in that campaign.
AMY GOODMAN: Kevin Whelan, you’ve been arrested outside of Attorney General Eric Holder—outside the Justice Department, demanding more action. And yet, Linda Tirelli, we have this latest news that as—that the attorney general claimed to have filed lawsuits on behalf of homeowner victims for losses totaling more than a billion dollars. In fact, it was 91 percent less than this, at $95 million. What do you think should happen? Who gets prosecuted here, and who is let go free?
LINDA TIRELLI: I think that at this point, let’s face it, we’re never going to see a perp walk, as much as we’d like to see one, because this is illegal activity that we’re talking about. At the very least, I think now this document gives the New York attorney general free access to every attorney who’s ever followed this manual and hold them accountable, because it is illegal. And we are held, as attorneys, to a much higher standard. We have to do a certain amount of due diligence, and we cannot knowingly produce false documents and submit them into a court of law. Our entire judicial process is based on integrity. This document, as I read it, OK, is going to bypass the integrity of the entire system, and it becomes now the civil procedure rules according to Wells Fargo. And that’s the rules they’re willing to play by.
JUAN GONZÁLEZ: And more importantly, the author of that document, right, who approved that document for all these lawyers to use.
LINDA TIRELLI: Exactly right, exactly right. And I want to point out that I actually introduced this document—
AMY GOODMAN: We have five seconds.
LINDA TIRELLI: —in a motion to reopen discovery after a trial, and my hope is that we will get discovery and get someone to a deposition table and get the answer to that.
AMY GOODMAN: Before Eric Holder was attorney general, he was a senior partner at Covington & Burling. Among the banks they represented, the four largest: Bank of America, Citigroup, JPMorgan Chase and Wells Fargo.
LINDA TIRELLI: No shock there.
AMY GOODMAN: Linda Tirelli, attorney representing clients being foreclosed on; Kevin Whelan of Home Defenders League, thanks so much for joining us.
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