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OBAMA ON SENATE FLOOR: “I’m not here to punish banks!”… No, Obama is bought by the banksters, and knows who his paymasters are!
They don’t get much more corrupt than the grand actor in the white house!
“This short-term decline resulted from voluntary moratoriums put in place by some banks after it came to light that mortgage lenders were systematically falsifying documentation in order to speed Americans out of their homes. In the immediate aftermath of the scandal the Obama administration ruled out any punishment or investigation of the banks, and foreclosure processing accelerated.”
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The Obama administration has done nothing to help homeowners. The administration’s Home Affordable Modification Program (HAMP), which was tacked onto the bank bailout for publicity, has provided permanent mortgage modifications to only a tiny fraction of those in need.
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The foreclosure crisis is relentlessly driving down the value of homes, the major source of wealth for most US families.
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2010 sets US home foreclosure record
By Andre Damon
14 January 2011
US home foreclosures hit a new record in 2010, as millions of families faced a disastrous combination of joblessness, falling wages, and plunging home values. The latest foreclosure figures, released Thursday by Realtytrac.com, comes amidst a bout of negative economic statistics that underscore the depth of the social crisis.
Approximately 2.8 million properties had foreclosure actions taken against them in 2010, about 1 in 45 US households in all and an increase of 2 percent over 2009. The number of properties repossessed by banks jumped 14 percent, to over one million.
The new record comes in spite of an 11 percent curtailment of foreclosure filings and evictions in the fourth quarter. This short-term decline resulted from voluntary moratoriums put in place by some banks after it came to light that mortgage lenders were systematically falsifying documentation in order to speed Americans out of their homes. In the immediate aftermath of the scandal the Obama administration ruled out any punishment or investigation of the banks, and foreclosure processing accelerated.
Experts say the worst is yet to come. “The 2010 numbers came out significantly lower than we expected as a result of the mortgage documentation scandal,” said Daren Blomquist, Director of Marketing Communications for Realtytrac, in a telephone interview. “But those foreclosures which were halted—about a quarter million—will simply be pushed to next year.”
Realtytrac was already projecting record levels of foreclosures next year before the mortgage scandal, and now estimates that foreclosure levels could be between 10 percent and 20 percent higher in 2011 than in 2010.
The Obama administration has done nothing to help homeowners. The administration’s Home Affordable Modification Program (HAMP), which was tacked onto the bank bailout for publicity, has provided permanent mortgage modifications to only a tiny fraction of those in need.
The Congressional oversight panel for the bank bailout pointed out last month that the program “will prevent only 700,000 foreclosures—far fewer than the three to four million foreclosures that Treasury initially aimed to stop, and vastly fewer than the eight to 13 million foreclosures expected by 2012.”
Moreover, the plan does not entail any reduction to the principal owed by homeowners; it merely adjusts monthly payments. In this it is fundamentally no different from actions taken by the banks on their own behalf in order to reduce losses on foreclosures.
The foreclosure crisis is relentlessly driving down the value of homes, the major source of wealth for most US families.
Zillow.com, the online real estate database, announced this week that its index of home values fell for the 53rd consecutive month in November, and that home values have fallen 26 percent since June 2006. “That’s more than the 25.9 percent decline in the Depression-era years between 1928 and 1933,” wrote Katie Curnutte, the site’s PR Manager, in a blog post.
The Case-Shiller index, which tracks prices in 20 major cities, has fallen even more, showing a remarkable 30 percent drop over the same period.
The deepening foreclosure crisis and the ongoing collapse of the US housing market is being driven by mass joblessness and a far-reaching assault on wages.
“Joblessness is the number one reason people lose their homes,” Blomquist noted. “As long as unemployment remains high, foreclosures will remain a persistent problem.”
This week’s initial jobless claims report offered no relief. The number of first-time benefit seekers grew by 35,000, to 445,000, the second consecutive weekly increase and the largest number since late October. There has been no statistically significant improvement in jobless claims in the past year, with the present level being essentially unchanged from the 456,000 claims reported on January 2, 2010.
The weekly jobless claims report from the Labor Department also reversed the much-touted improvement in the figure seen in December. The jobs situation supposedly improved that month, as the unemployment rate fell to 9.4 percent (a decline largely attributable to shrinkage of the workforce due to long-term unemployment), non-farm payrolls crept up by 100,000 (less than the number needed to keep pace with growth in the labor market), and jobless claims fell three weeks in a row.
Barack Obama seized on the December jobs report to proclaim an economic recovery, noting in a speech the day after the release of the December jobs figures that “each quarter was stronger than the last,” and that “the pace of hiring is picking up.”
The past several days have seen a number of mass layoffs. Steelcase, the office furniture company, announced that it will close three North American Factories on January 12, putting hundreds out of work. Lockheed Martin, the aircraft maker, said Thursday that it will cut 250 jobs at a plant in Eagan, Minnesota, which is slated for closure.
Even more drastic are cuts planned for the public sector. The Charlotte-Mecklenburg Schools system in North Carolina announced this week that it will cut 1,500 jobs as part of a budget-reduction program. The school system plans to supplement the layoffs with school closures and the slashing of programs.
More cuts are on the way. States are facing combined budget deficits of $140 billion for 2011. Costs have soared as a result of increased joblessness and poverty, straining social infrastructure to the breaking point. At the same time revenues have fallen by almost a third from their 2008 levels.
Despite the dire consequences posed by further cuts to state spending, there will be no relief from the federal government. “We have no expectation or intention to get involved in state and local finances,” declared Federal Reserve Chairman Ben Bernanke in testimony before congress Wednesday, adding that states “should not expect loans from the Fed.”
The financial elite, meanwhile, is demanding more spending cuts to make up for the multi-trillion dollar bailout of Wall Street carried out by the Federal Reserve and the US Treasury, and the latest round of tax give-aways to the rich signed into law by Obama in December.
Moody’s, the debt rating agency, said Thursday that the US government faces a downgrade of its AAA debt rating if it does not take further steps to cut social spending. “Future costs must be brought under control if these countries are to maintain long-term stability in their debt-burden credit metrics,” the agency wrote in an email memo.
“Judges and investigators need to be unflinching in their inquiries into the paperwork debacle and must hold the banks fully accountable. What we’ve already learned is chilling — and suggests that bankers have learned little since the 2008 implosion and taxpayer bailout.”
NEW YORK TIMES
October 14, 2010
The Foreclosure Crises
Attorneys general in all 50 states have pledged a coordinated investigation into chaotic foreclosure practices by some of the nation’s largest banks. The Department of Justice is also looking into what happened, while some lawmakers are now calling for a nationwide moratorium on all foreclosures until the legal questions are settled. The Obama administration is insisting such a broad delay would hurt the economy.
There is plenty to worry about. But amid all this roiling, neither Congress nor the administration has found a way to address an even more fundamental problem: What government and banks need to do to finally stanch the flood of foreclosures wreaking havoc on the lives of millions of Americans and threatening the recovery.
According to the latest figures, 4.2 million loans are now in or near foreclosure. An estimated 3.5 million homes will be lost by the end of 2012, on top of 6.2 million already lost. Yet the administration’s main antiforeclosure effort has modified fewer than 500,000 loans in about 18 months.
Judges and investigators need to be unflinching in their inquiries into the paperwork debacle and must hold the banks fully accountable. What we’ve already learned is chilling — and suggests that bankers have learned little since the 2008 implosion and taxpayer bailout.
Major banks — including Bank of America, JPMorgan Chase and Ally Bank, which is owned by GMAC — have suspended foreclosures after admitting they had submitted tens of thousands of affidavits to the courts, attesting to facts about the defaulted loans that had not been verified by the bank employees signing the documents.
The Times’s Eric Dash and Nelson D. Schwartz reported in Thursday’s paper that in their rush to process foreclosures, banks hired inexperienced workers (“Burger King kids” as one former banker derided them) who barely knew what a mortgage was.
The problems may go far deeper. The banks’ procedures for keeping track of mortgages may also be seriously flawed. If there are problems in establishing a chain of title, it could — again — call into question the value of mortgage-backed securities. That would mean litigation, which would harm bank profits, and in a worst case, risk another economywide disruption.
As important, and dismaying, as all this is, it must not obscure the underlying problem: potentially millions of foreclosures that could and should be avoided.
A mandated, national moratorium may be unavoidable if banks resume a rush to foreclosure before all the legal issues are resolved. So far, there is no sign of that. A moratorium won’t address the fundamental problem that banks have not competently and aggressively pursued ways to keep more financially viable Americans in their homes.
The White House may well be right that a moratorium would further rattle investors. But the economy is not going to rebound until the housing mess is resolved. What is needed, urgently, are laws and policies to give homeowners a better shot at reworking their loans so they can keep making payments and avoid foreclosure.
Throughout this crisis, the Obama administration has been far more worried about protecting the banks than protecting homeowners. The big weaknesses in the administration’s main antiforeclosure policy is that participation by lenders is voluntary and homeowners have little leverage to get better terms — especially reductions in loan principal when the mortgage balance is greater than the value of the home.
One way to change that would be for Congress to reform the bankruptcy law so troubled borrowers could turn to the courts for a loan modification if banks were uncooperative. Homeowners also need a simple process to challenge a bank if it uses incorrect information to deny a modification and justify a foreclosure, or if it refuses to divulge the facts and figures it used.
The administration also needs to alter refinancing guidelines so that many borrowers who are current in their payments are eligible to refinance to lower rates, even if their houses have declined in value. It needs to provide more legal aid to homeowners, using money authorized by Congress.
This latest foreclosure crisis should settle one issue once and for all. The banks that got us into this mess can’t be trusted to get us out of it. The administration and Congress need to act.
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WSWS.org
The White House and the US mortgage racket
15 October 2010
The Obama administration has rejected calls for a moratorium on home foreclosures despite revelations that banks illegally processed mortgage documents to speed up the eviction of families and seizure of their homes.
Nothing could more clearly demonstrate the class interests served by the White House. Major banks have systematically broken the law, victimizing an unknown number of families, and the Obama administration responds by shielding the criminals.
The fraudulent practices that have come to light include bank employees and those of contractors falsely attesting that they had personal knowledge of cases, forging signatures, falsifying notary stamps and altering documents, as well as banks falsely asserting ownership of homes on which they had no legal claim.
Each day brings new revelations. The New York Times reported Thursday that outsourced loan workers at Citigroup and GMAC were sometimes so “frazzled” they simply threw paperwork into the garbage, while contract workers for Goldman Sachs processed foreclosure documents so quickly they “barely had time to see what they were signing.”
Every major bank is implicated, and hundreds of thousands, if not millions, of homeowners facing foreclosure have been affected. There are numerous known cases of evictions of families who were not behind on their mortgage payments at all.
The attorneys general in all 50 states have launched a coordinated investigation and several have urged a moratorium on foreclosures, calling the falsified paperwork a “fraud on the courts.” Senate Majority leader Harry Reid of Nevada, facing a tight election race in the state with the highest foreclosure rate in the country, has also called for a moratorium.
Elementary due process dictates that a moratorium be imposed. No one knows at this point how many homes have been illegally foreclosed or repossessed. The bank records are in disarray. Logic and the law demand that no more families be foreclosed on until a thorough investigation is conducted.
But the Obama administration has once again sided with the banks against the people. Federal regulators have merely urged the banks to voluntarily review their own practices while they “continue with foreclosures as quickly as possible,” according to the Washington Post.
In a press conference this week, White House spokesman Robert Gibbs exhibited not the slightest concern for the fate of those harmed by the banks’ fraud. Speaking unabashedly on behalf of the banks, he said, “If there’s an empty house in the neighborhood that somebody has a contract on and their closing date is next week and there is a moratorium, that closing doesn’t happen, right? That sale doesn’t happen. That recovery doesn’t take place.”
The Obama administration’s housing policy, in other words, is to push millions of people out of their homes.
Even if one were to accept the dubious claim made by the bankers and their mouthpieces in the government that a moratorium would destroy the housing market and precipitate another financial panic—a self-serving argument which they do not bother to substantiate—that would only confirm the rapacious and socially destructive character of the existing economic system. The fact that Wall Street all but admits that the profit system is dependent on the spread of homelessness and social misery underscores the necessity for the system’s overthrow.
The falsification of mortgage documents is the latest phase in a vast crime against the population.
Before the financial crisis of 2008, the banks lured millions of Americans into overpriced sub-prime mortgages, often involving low “teaser” interest rates that jumped sharply after a set time. The money-mad pyromaniacs on Wall Street knew full well that the loans could not be repaid, but like all Ponzi schemers they were intent on milking the racket for as long as possible, confident that, in the end, the government would step in to cover their losses.
The resulting toxic loans were bundled, securitized and sold, creating a massive structure of debt resting on fraudulent and legally dubious foundations—from which bank executives and top shareholders secured dizzying levels of personal wealth.
When the Ponzi scheme collapsed, the federal government bailed out the banks to the tune of trillions of dollars. As a result, the banks are now flush with cash and their executives are shattering pay records in both 2009 and 2010.
But for millions of American families, whose homes were their major source of wealth, the impact has been devastating. The Obama administration’s so-called “housing rescue,” based on the voluntary participation of the banks, has had virtually zero effect, resulting in the permanent modification of fewer than 5,000 loans by the end of May.
The result is a vast and cascading crisis. In the third quarter, nearly one million US homes, one in every 139, received a foreclosure filing, and over 100,000 homes were repossessed by banks. About 2.5 million homes have been taken by banks since December 2007. How many of these were the result of fraudulent and illegal bank practices is not known.
It is abundantly clear that there can be no solution to the housing crisis outside of a struggle against the finance industry and its servants in both political parties. The Wall Street criminals responsible for the mortgage racket should be investigated and tried, their ill-gotten fortunes seized and the money put toward the creation of affordable housing for working people.
The working class has to break from the Democratic Party. Obama’s opposition to a moratorium on foreclosures should clear up any confusion. The Democratic Party is not and never has been a party of the “people” or the “middle class.” It is a party, like its Republican counterpart, of the ruling class, pursuing policies antithetical to the needs of the population: good-paying jobs, a secure retirement, education, health care, quality housing.
The Socialist Equality Party is the only party that fights for a break with the Democrats and the building of a mass movement of the working class to throw off the stranglehold of the financial aristocracy and reorganize the economy to serve social needs, not corporate profit.
In our recently adopted program, the SEP insists that access to decent housing is a social right. The SEP program demands “an immediate halt to all foreclosures and evictions” and the restructuring of all mortgages “to affordable levels, indexed to income and employment status.”
“The right to decent housing for all can be assured only by placing the home-building and financing industry under public ownership,” the program continues, “and pouring hundreds of billions of dollars in public funds into the construction of new homes and apartments and the renovation of existing buildings.”
We urge all readers of the World Socialist Web Site to study our program and make the decision to join and build the SEP.
Tom Eley
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