|
IT’S YOUR TURN TO ACT.
Thanks for reading this newsletter. Please pass it on to friends and
urge them to sign up for free at
StopTheSqueeze.org,
and get a copy of
IN DEBT WE TRUST.
|
Stop The
Squeeze
Weekly Tip
Monopoly:
Electronic Banking Edition replaces cash with debit
cards. Is it a natural evolution of a popular board
game, or is it a well-conceived conspiracy to train
young minds and condition them to use credit cards when
they grow up?
|
debt busters network
We are putting together a directory of solution providers that can
help.
Visit the Debt
Busters Network
If you are a solution provider and would
like to join the network, please visit the link above for more info
and review our sponsorship opportunities to see if any of them suits
you.
View Sponsorship Opportunities
If you had a good experience with a
solution provider, please
recommend them
here.
We are inviting
organizations to hold screenings, sponsor house parties and
otherwise promote the film.
Find out
more about how to host a screening.
Let us know if you find these newsletters helpful and please pass
them on to your email lists. For information on how to get involved,
contact us here. |
THE MORTGAGE CRISIS IS NOT JUST ABOUT
ABUSE BUT CRIME
The Weekly Stop The Squeeze Newsletter
In Debt We
Trust director Danny Schechter reports on the film and campaign.
What if NBC’s “TO CATCH A PREDATOR”
program really did turn its sensationalistic gaze on predatory
lenders? It would be consistent, wouldn’t it, with all the true
crime shows that dominate the airwaves? And they wouldn’t have to
commission new graphics or a a title either.
You would think they would want to get ahead of the Courts and the
State Attorney Generals who will, one day, be prosecuting what I
call the “Subcrime scandal.” After all, it’s a story with billions
of dollars missing, millions of victims, and perhaps the whole
global economy at stake.
It may never happen and not just because NBC’s parent company GE is
a big lender. Its more. because in-depth investigative journalism
seems to have been displaced by all the celebrity pandering.
Stories like this don’t just follow the money—a key axiom of
reporting…but they are about money and the way big-time white collar
crime works. They are about sleaze merchants in suits, big time
investors who routinely violate laws and expect their master of the
universe status to guarantee they will never get caught. A recent
survey on Wall Street found a majority of those quizzed believe
something is only wrong once you get caught.
THE ROGUE’S GALLERY
We have seen a whole rogue’s galley of these corporate thieves go
down in recent years. We have read about the Enrons and the
WorldComms and seen the perp walk of big time CEO’s like Miliken and
Kazlowski before they face justice. They are not bailed out. They
are jailed out.
Why not in this scandal?
Part of the problem is you really do need subpoena power and teams
of investigators and accountants to take apart their phony ledgers
and deceptive sales spiels. In the Bush years, tax cuts are going to
the rich while the IRS is browbeating the middle class.
Many of the people who should be investigating the mortgage
criminals have themselves taken money from real estate lobbies and
financial institutions or been working for the industry in some way.
We saw how Democrats, for example, caved on the so-called bankruptcy
reform bill.
It’s not so hard to get a handle on the story. Start with some of
the disgruntled employees of those mortgage companies who were just
dumped from some of the best paying jobs in their lives after the
companies imploded because of their own shady practices. Many are
ready to talk if only to expunge their own consciences. The rats are
off the sinking ship and know how leaky it was.
STEALING PEOPLE’S HOMES
There are frauds to be found an every level including mortgage
servicing frauds that are designed to steal people’s homes.
A Real Estate expert explained this to me this way:
“Not too many years ago, if you borrowed money to buy a house or a
car, you visited your local bank. Assuming you were approved, the
money came from your bank and the follow-up (the “servicing”) was
handled by that same bank. If you had a problem, you knew who you
could speak with and where to find him or her. The system worked
pretty well. But only greed could cause a seemingly good system to
go awry. And the heart of all greediness is Wall Street, of course.
Realizing that these loans were a good investment for the banks,
Wall Street decided to figure out how to take a piece of the pie.
And hence the mortgage backed security was born. By buying in bulk
various mortgage loans, Wall Street could take the role (and the
lions share of the profits) of the bank without the inconvenience of
opening branches. Banks, in turn, could keep lending endlessly, just
as long as they kept refilling the pot by selling off the old loans
and lending anew. And just to give you that homespun feeling (and to
earn the banks a few extra dollars) your local bank would continue
collecting your payments and forwarding them on each month –
essentially lending a familiar brand name and adding a warm and
fuzzy feeling to this anonymous multi billion dollar Wall Street
enterprise.
It all seemed well enough – invisible, in fact – until the horror
stories that have recently begun to emerge. And more are coming.
Behind the wall lurks an empire of greed mixed with incompetence and
lack of concern. And why should you care? Because every loan you
take out – car loans, mortgages, personal loans – might very soon
belong to someone else, located thousand of miles away from you and
sometimes with the very worst of intentions. Your local banker will
now make his decision not based upon his or her own criteria but
based upon his ability to sell your loan to someone else. And if
those anonymous loan-buying monoliths decide that they are no longer
enamored with, for example, your type of small business loans, or
mortgages in certain neighborhoods ...well you might be out of luck
no matter how stellar your payment history or credible your need.”
Adds the website
www.MSFraud.org:
“These are not "predatory lenders." These companies do not loan
money. They operate in the lending
industry after-the-fact. They
take on a function that a lender doesn’t want - the backroom
functions of
handling payments, escrow accounts, annual statements,
dealing with borrowers, collections, etc. The
perpetrators of the
loan servicing scam acquire the servicing rights to loans that other
companies have
already made. (Loans that were deliberately
constructed by predatory lenders are ideal for processing
through
servicers that specialize in aggressive collections or rapid
foreclosure processing, but the loan
servicing scam can be operated
against any mortgage loan if the servicer acquires the rights from
the lender.)”
My “deep throat" has more:
“But it gets worse. For those lucky enough to be granted the loan
for which they have applied, the selling off of that loan means that
other people are now in control of their financial destiny. And
these loan purchasers have a profit motive that has little to do
with winning your repeat business. They don’t even want to know you.
These loan buyers are divided up into two parts, known as the the
“A” and the “B” piece buyers. The “A” buyers are generally anonymous
investors with little interest in the day to day affairs of lending
money. They get a lower return in exchange for their “safe” senior
position. The “B” piece buyers (also known as the “Special Servicers”)
are the high rollers, the high-yield profiteers. They are predators.
And they are a very big part of what is terribly wrong with this
equation. Loan documents are slowly being tailored to their needs,
to include new fees and charges and rights in the so-called fine
print. The more onerous the terms, the greater the opportunity to
profit from the unsuspecting borrower. “
These practices were common, even pervasive in industry where every
scam and sheme is carefully thought out. In some states, State
Attorney General are going after some brand name firms like
Ameriquest. You may remember them from their superbowl ads
legitimizing their practices. They are now out of business, gone,
busted, and sold to Citi-Bank. But there are still legal settlements
being imposed on them
THE AMERIQUST SCAM
Example: A $295 million Settlement Fund has been established to
provide restitution payments to certain Ameriquest borrower
This
Web site provides information about the States’ January 2006
settlement with Ameriquest Mortgage Company (the “Settlement”). On
this Web site you will find detailed information about the
Settlement and who may be eligible to receive restitution payments,
as well as answers to frequently asked questions.
WE NEED TO HEAR FROM THE VICTIMS
They include the people who thought they were getting something for
nothing and thought they were scamming the lenders. (That’s like the
casino gamblers who always think they will beat the house but rarely
do), We need to read the stories of the scammers who are literally
stealing peoples homes.
Please see an excellent series in the Chicago Tribune about their
perfidy.
According to writer Alan Gabor, the number of people suckered into
subprime loans may number as many as TEN MILLION. And these people
are pissed and want to be heard but the business press is barely
touching the surface of their stories.
"Those ten million families who
finally got that home loan through the sub prime market makers
on Wall Street who hawk junk bonds just as quickly as they can
hawk junk mortgages, a product which has already developed into
a multi-trillion dollar a year trading market, are all having a
difficult time sleeping at night.
GOING UNDERGROUND
While the debacle continues to
unfold, millions of homeowners may never again obtain credit in
this country, impacting the economy for a long time to
come…perhaps as long as a decade.
Those damaged borrowers are
thoroughly fed up and sick and tired of the government, the
banking system, and the crooks on Wall Street who keep sucking
the lifeblood out of America’s economy. They want nothing more
to do with debt, bankers, Wall Street or even the American
government. They simply drop out and go into the underground
economy. And the powers that be can do nothing about it. When
you have more than 10 million people with bad credit defaulting
on loans over a two year period you have some serious problems
on the horizon for the global economy."
BATTLING IN THE COURTS AND AGAINST
THE COURTS
And let's hear from the people who
fought back and found the Courts working in collusion with lenders
and helping them foreclose on their property even when they don’t
own it. Listen to people like Jack Wright of Dallas Texas who tells
his whole story on the
www.MSFraud.org
website:
"In April 1997, I was alleged to
be in default on my mortgage and the mortgage company, claiming
to be the true party in interest (the owner/holder), was going
to foreclose.
I was not in default and had all the documents to prove it.
After one year of the mortgage company’s refusal to correct
their accounting errors, I was forced to file a law suit to
protect my home from an illegal foreclosure.
For the next seven (7) years (costing me more than $2 million in
legal expenses and lost wages), I watched the court[s]
repeatedly grant judgments in favor of the mortgage companies.
These errant judgments were granted without either mortgage
company presenting a scintilla of evidence to support their
allegations and in stark contrast to my preponderance of
evidence and material facts."
In the end he lost his home and can’t
afford to fight any more in the courts. There are many sad and
depressing stories like this that will anger the public if and when
they hear them
RIPPING OFF INVESTORS
These scammers targeted their own class and community. Henry K Lieu
writes on Asia Times On Line charging many investors were defrauded
because these corrupt practices were never disclosed;
It is now clear that material
information about the true condition of the financial system
along with material information of the financial health of major
US banks and their financial-company clients has been
systemically withheld, over long periods and even after the
crisis broke, from the investing public who were encouraged to
buy and hold even at a time when they should have really been
advised to sell to preserve their hard-earned wealth. The aim of
this charade has not been to enhance the return on the public's
investment, but to exploit the public trust to shore up a
declining market and postpone the inevitable demise of wayward
institutions."
Who are these “wayward institutions?” We
are talking about some big, well-known institutions, brand name
banks and investment firms, the hoi paloi of Wall Street. Many were
deeply implicated along with the regulators and rating services who
did nothing and, in effect, colluded with and covered up criminal
ponzi schemes and worse.
UNIVERSITIES HELPED THE SCAMMERS TOO
On Campuses, professors and students are speaking out against
sweetheart deals between the universities and credit card companies
that gouge the students.
Says In Debt We Trust Editorial advisor Robert Manning in Business
Week:
"Universities are pursuing sweetheart
deals with credit card companies, and offering up premiere marketing
locations and student names and addresses for a big profit," says
Manning, director of the Center for Consumer Financial Services at
the Rochester Institute of Technology. "It's a clear conflict of
interest."
A TIME TO ACT
This is just the tip of the iceberg.
There are so many stories and so many cases. Once they start getting
attention, this story will broaden out, and we will see a much
deeper rot.
It is then that we can begin to fight
for debt relief including a moratorium on foreclosures and the
criminal prosecution of the profiteers. This time it is the big fish
who could fry. It will only happen when an enraged public demands
justice.
Visit
StopTheSqueeze.org. Organize screenings and get involved!
In Debt We Trust
Screenings
There are more screenings of In Debt We Trust underway.
You can organize a screening in your neighborhood.
Help us get the word out.
* * *
Your comments and experiences are welcome. Write: Dissector@mediachannel.org.
You can read more of my daily blogs and articles on Mediachannel.org
We are also maintaining a
DEBT BLOG
on this site. Please visit it and tell us what you think
Please send this newsletter to your friends.
We are also looking for some donors to support our not-for-profit
outreach and educational campaign with tax-deductible donations to:
The Global Center
575 8th Avenue, suite 2200
New York, New York 10018
If you have comments or suggestions,
share them with me at
dissector@mediachannel.org.
Danny Schechter
Editor
Mediachannel.org
Director IN DEBT WE TRUST
InDebtWeTrust.com
212 246-0202x3006 |
Get the film that started IT
ALL!
DVD $19.95
DVD+SOUNDTRACK $29.95
Join & make $$$
Showtimes
Tell A Friend
Take Action
Host A
Screening
Watch Student Loan Video
Watch Foreclosure Video
Debt Busters Network
We Need Your Help!
Make a donation to Globalvision:
$10 donation
$25 donation
$50 donation |
