Citibank | Ted Rall's Rallblog

SYNDICATED COLUMN: Lose Your House, Collect $300

April 13, 2013•

Why Aren’t Rioters Burning Down the Banks?

One in ten Americans take such antidepressants as Prozac and Paxil. Among those in their 40s and 50s, it’s 23%. Maybe that’s why we’re so passive.

Like the blissed-out soma-sucking drones of Huxley’s “Brave New World,” we must be too drugged to feel, much less express, rage. How else to explain that furious mobs haven’t burned the banks to the ground?

Last week, as the media ginned up empty speculation about Hillary Clinton’s presidential prospects, and wallowed in nuclear cognitive dissonance — Iran, which doesn’t have nukes and says it doesn’t want them, is repeatedly called a grave threat worth going to war over, while North Korea, which does have them and won’t stop threatening to turn the West Coast of the U.S. into a “sea of fire,” is dismissed as empty bluster, nothing to worry about — the Office of the Comptroller of the Currency and the Federal Reserve released the details of the settlement between the Obama Administration and the big banks over the illegal foreclosure scandal.

Citibank, JPMorgan Chase, Bank of America, Wells Fargo and other major home mortgage lenders foreclosed upon and evicted millions of homeowners between the start of the housing collapse in 2007 and 2011. Millions of families became homeless, including 2.3 million children. The vast majority of these Americans are still struggling; many fell into poverty from which they will never escape.

Disgusting, amazing, yet true: the banks had no legal right to evict these people. In many cases, the banks didn’t have basic paperwork, like the original deed to the house. They resorted to “robo-signing” boiler room operations to churn out falsified and forged eviction papers. In others cases, people could have kept their homes if they’d been allowed to refinance — their right under federal law — but the banks illegally refused, giving them the runaround, repeatedly asking for the same paperwork they’d already sent in. Soldiers fighting in Afghanistan and Iraq, protected from foreclosure under U.S. law, came home to find their homes resold at auction. In other cases, banks even repossessed homes where the homeowner had never missed a mortgage payment.

The foreclosure scandal helped spark the Occupy Wall Street movement.

Promising justice and compensation for the victims, President Obama’s Justice Department joined lawsuits filed by the attorneys general of several states.

Last year, Obama announced that the government had concluded a “landmark settlement” with the banks that would “deliver some measure of justice for those families that have been victims of their abusive practices.” The Politico newspaper called the $26 billion deal “a big win for the White House.” $26 billion. Sounds impressive, right?

So…the envelope, please.

How much will the banks have to pay? What will people whose homes were stolen — there is no other word — receive? Now we know the details.

Remember what we’re talking about. Your house is your biggest asset. You own tens of thousands, in some cases hundreds of thousands of dollars in equity. One morning the sheriff comes. He throws you and your family out on the street. Your possessions are dumped on the lawn. You have nowhere to go. Your kids are crying. If you were struggling before, now you’re completely screwed. And the bank that did it had no legal basis whatsoever to do what they did.

They took your house, sold it, and pocketed the profits.

What would happen to you if you walked into Tiffany’s and stole a $200,000 necklace?

The details:

Even though they qualified for federal loan modifications, the banks seized 1.1 million homes, making 1.1 million families homeless after they were approved for refinancing. Since the average foreclosed home was worth $191,000, the banks stole $210 billion in homes. Under the “landmark settlement,” these wrongfully evicted Americans will receive $300 or $500 each, the value of a modest night out at a nice restaurant in Manhattan (two tenths of one percent of their loss).
900,000 borrowers who were entitled under Obama’s Make Home Affordable program to refinancing were denied help and lost their homes. They get $300 or $600.
420,000 homeowners who lost their homes while the banks intentionally dithered and “lost” their paperwork get $400 or $800.
28,000 families who were entitled to protection against foreclosure under federal bankruptcy law, but got thrown out of their homes anyway, get $3,750 to $62,500.
1,100 soldiers entitled to protection against foreclosure because of their military status get $125,000.
53 families who weren’t late on their mortgages, never missed a payment, but got thrown out anyway, get $125,000.

So we’ve got more than 2.4 million families — that’s 5 million people — whose homes got bogarted by scumbag banksters. They’re getting a thousand bucks each on average. A thousand bucks for a two hundred thousand dollar theft! Not to mention the heartbreak and stress they suffered.

Why aren’t those five million people stringing up bank execs from telephone poles? It’s gotta be the Paxil.

But what really gets me is the 53 families who are getting $125,000 payouts for losing homes they were 100% up to date on.

Even if you’re a heartless right-winger, you’ve got to have a problem with a bank taking your house when you never missed a payment. Sorry, but these are multinational, multibillion dollar banks. They should pay these families tens of millions of dollars each.

Those 53 families should own Citibank, JPMorgan Chase, Bank of America and Wells Fargo.

Some perspective:

Citigroup CEO Vikram Pandit received $260 million in pay between 2007 and 2012, the height of the foreclosure scandal.

In 2011 alone, JPMorgan Chase CEO Jamie Dimon was given $23 million. In 2012, the company’s board of directors “punished” him for a $6 billion loss in derivatives trading by paying him “merely” $18.7 million.

In 2012 alone, Bank of America paid CEO Brian Moynihan $12 million; Wells Fargo paid $23 million to CEO John Stumpf.

Not bad for some of the worst criminals in history.

That’s how things work in the United States: the criminals get the big payouts. The people whose lives they destroy get $300.

(Ted Rall’s website is tedrall.com. His book “After We Kill You, We Will Welcome You Back As Honored Guests: Unembedded in Afghanistan” will be released in November by Farrar, Straus & Giroux.)

SYNDICATED COLUMN: Another Obama Sellout

February 23, 2012•

Ted Rall

Mortgage Settlement a Sad Joke

Joe Nocera, the columnist currently challenging Tom Friedman for the title of Hackiest Militant Centrist Hack—it’s a tough job that just about everyone on The New York Times op-ed page has to do—loves the robo-signing settlement announced last week between the Obama Administration, 49 states and the five biggest mortgage banks. “Two cheers!” shouts Nocera.

Too busy to follow the news? Read Nocera. If he likes something, it’s probably stupid, evil, or both.

As penance for their sins—securitizing fraudulent mortgages, using forged deeds to foreclose on millions of Americans and oh, yeah, borking the entire world economy—Ally Financial, Bank of America, Citibank, JPMorgan Chase and Wells Fargo have agreed to fork over $5 billion in cash. Under the terms of the new agreement they’re supposed to reduce the principal of loans to homeowners who are “underwater” on their mortgages—i.e. they owe more than their house is worth—by $17 billion.

Some homeowners will qualify for $3 billion in interest refinancing, something the banks have resisted since the ongoing depression began in late 2008.

What about those who got kicked out of their homes illegally? They split a pool of $1.5 billion.

Sounds impressive. It’s not. Mark Zuckerberg is worth $45 billion.

“That probably nets out to less than $2,000 a person,” notes The Times. “There’s no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file.”

Readers will recall that I paid more than that for a speeding ticket. 68 in a 55.

This is the latest sellout by a corrupt system that would rather line the pockets of felonious bankers than put them where they belong: prison.

Remember TARP, the initial bailout? Democrats and Republicans, George W. Bush and Barack Obama agreed to dole out $700 billion in public—plus $7.7 trillion funneled secretly through the Fed—to the big banks so they could “increase their lending in order to loosen credit markets,” in the words of Senator Olympia Snowe, a Maine Republican.

Never happened.

Three years after TARP “tight home loan credit is affecting everything from home sales to household finances,” USA Today reported. “Many borrowers are struggling to qualify for loans to buy homes…Those who can get loans need higher credit scores and bigger down payments than they would have in recent years. They face more demands to prove their incomes, verify assets, show steady employment and explain things such as new credit cards and small bank account deposits. Even then, they may not qualify for the lowest interest rates.”

Financial experts aren’t surprised. TARP was a no-strings-attached deal devoid of any requirement that banks increase lending. You can hardly blame the bankers for taking advantage. They used the cash—money that might have been used to help distressed homeowners—to grow income on their overnight “float” and issue record raises to their CEOs.

Next came Obama’s “Home Affordable Modification Program” farce. Another toothless “voluntary” program, HAMP asked banks to do the same things they’ve just agreed to under the robo-signing settlement: allow homeowners who are struggling to refinance and possibly reduce their principals to reflect the collapse of housing prices in most markets.

Voluntary = worthless.

CNN reported on January 24th: “The HAMP program, which was designed to lower troubled borrowers’ mortgage rates to no more than 31% of their monthly income, ran into problems almost immediately. Many lenders lost documents, and many borrowers didn’t qualify. Three years later, it has helped a scant 910,000 homeowners—a far cry from the promised 4 million.”

Or the 15 million who needed help.

As usual, state-controlled media is too kind. Banks didn’t “lose” documents. They threw them away.

One hopes they recycled.

I wrote about my experience with HAMP: Chase Home Mortgage repeatedly asked for, received, confirmed receiving, then requested the same documents. They elevated the runaround to an art. My favorite part was how Chase wouldn’t respond to queries for a month, then request the bank statement for that month. They did this over and over. The final result: losing half my income “did not represent income loss.”

It’s simple math: in 67 percent of cases, banks make more money through foreclosure than working to keep families in their homes.

This time is different, claims the White House. “No more lost paperwork, no more excuses, no more runaround,” HUD secretary Shaun Donovan said February 9th. The new standards will “force the banks to clean up their acts.”

Don’t bet on it. The Administration promises “a robust enforcement mechanism”—i.e. an independent monitor. Such an agency, which would supervise the handling of million of distressed homeowners, won’t be able to handle the workload according to mortgage experts. Anyway, it’s not like there isn’t already a law. Law Professor Alan White of Valparaiso University notes: “Much of this [agreement] is restating obligations loan servicers already have.”

Finally, there’s the issue of fairness. “Underwater” is a scary, headline-grabbing word. But it doesn’t tell the whole story.

Tens of millions of homeowners have seen the value of their homes plummet since the housing crash. (The average home price fell from $270,000 in 2006 to $165,000 in 2011.) Those who are underwater tended not to have had much equity in their homes in the first place, having put down low downpayments. Why single them out for special assistance? Shouldn’t people who owned their homes free and clear and those who had significant equity at the beginning of crisis get as much help as those who lost less in the first place? What about renters? Why should people who were well-off enough to afford to buy a home get a payoff ahead of poor renters?

The biggest fairness issue of all, of course, is one of simple justice. If you steal someone’s house, you should go to jail. If your crimes are company policy, that company should be nationalized or forced out of business.

Your victim should get his or her house back, plus interest and penalties.

You shouldn’t pay less than a speeding ticket for stealing a house.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

SYNDICATED COLUMN: 7-7-7

December 1, 2011•

Ted Rall

Jobless? Face It: Obama’s Not That Into You

Forget Herman Cain’s 9-9-9. The battle cry for every American ought to be 7-7-7.

7-7-7: for the $7.7 trillion the Bush and Obama Administrations secretly funneled to the banksters.

Remember the $700 billion bailout that prompted rage from right to left? Which inspired millions to join the Tea Party and the Occupy movements? Turns out that that was a mere drop in the bucket, less than a tenth of what the Federal Reserve Bank doled out to the big banks.

Bloomberg Markets Magazine reports a shocking story that emerged from tens of thousands of documents released under the Freedom of Information Act: by March 2009, the Fed shelled out $7.77 trillion “to rescuing the financial system, more than half the value of everything produced in the U.S. that year.”

The U.S. national debt is currently a record $14 trillion.

We knew that the Fed and the White House were pawns of Wall Street. What’s new is the scale of the conspiracy.

Even the most jaded financial reporters were stunned at the extent of collusion: “The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates.”

Citigroup earned an extra $1.8 billion by reinvesting the Fed’s below-market loans. Bank of America made $1.5 billion.

Bear in mind, that’s only through March 2009.

“Many Americans are struggling to understand why banks deserve such preferential treatment while millions of homeowners are being denied assistance and are at increasing risk of foreclosure,” wrote Representative Elijah Cummings, a ranking member of the House Committee on Oversight and Government Reform who is demanding an investigation.

Indeed we are.

This stinks. It’s terrible economics. And it’s unbelievably cruel.

First the economics. The bank bailouts were supposed to loosen credit in order to encourage lending, investment, job creation and ultimately consumer spending. It didn’t work. Banks and corporations alike are hoarding cash. President Obama, who promised 4 million net new jobs by earlier this year, has been reduced to claiming that unemployment would have been even higher without the bailouts.

Ask any business executive why nobody is hiring and they’ll blame the lack of consumer demand. If the ultimate goal is to put more money into people’s pockets, why not just, you know, put more money into people’s pockets?

Bank executives used federal taxdollars to pay themselves tens of billions in bonuses and renovate their corporate headquarters. We the people got 0-0-0. What if we’d gotten 7-7-7 instead?

Every man, woman in child in the United States would have received $24,000.

A family of four would have gotten $96,000.

And that’s without an income test.

New data from the U.S. Census Bureau shows that 100 million American citizens—one of out of three—subsists below or just above the official poverty line. Demographers, statisticians and economists were stunned. “These numbers are higher than we anticipated,” Trudi J. Renwick, the bureau’s chief poverty statistician, told The New York Times. “There are more people struggling than the official numbers show.”

For four decades progressive economists have warned that the middle-class was being eroded, that the United States would become a Third World country if income inequality continued to expand. They can stop. We’re there.

These poor and “near poor” Americans comprise the vast majority of the uninsured, un- and underemployed, and foreclosure victims. If Bush-Obama’s 7-7-7 Plan had gone to each one of these 100 million misérables instead of Citigroup and Bank of America, the IRS would have mailed out 100 million checks for $77,700 each.

This would have paid off a lot of credit cards. Kept millions in their homes, protecting neighborhood property values. Allowed millions to see a doctor. Paid for food.

A lot of the money would have been “wasted” on new cars, Xboxes—maybe even a renovation or two. All of which would have created a buttload of consumer demand.

If you’re a “99er”—one of millions who have run out of unemployment benefits—Obama’s plan for you is 0-0-0.

If you’re one of the roughly 20 million homeowners who have lost or are about to lose your house to foreclosure—most likely to a bank using fraudulent loan documents—you get 0-0-0.

If you’re a teacher asking for a raise, or a parent caring for a sick child or parent, or just an ordinary worker hobbling to work on an old car that needs to be replaced, all you’ll get is 0-0-0.

There isn’t any money to help you.

We don’t have the budget.

We’re broke.

You can’t get the bank to call you back about refinancing, much less the attention of your Congressman.

But not if you’re a banker.

Bankers get their calls returned. They get anything they want.

There’s always a budget for them.

They get 7-7-7.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)