- Terelle Jerricks
By Sherry Hernandez, Author and Member of Occupy San Pedro
When the US housing market tanked in 2008, former Federal Reserve chairman, Alan Greenspan admitted “that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.”
You would hope that by year four of dealing with the fallout from the financial sector’s hubris that some of Greenspan’s newfound humility would have spread throughout the industry. Apparently it has not.
Early last month, on May 8, the Long Beach City Council heard public comments on whether to endorse Attorney General Kamala Harris call for the state legislature to enact the Homeowners Bill of Rights. Enshrined in this package of bills are guarantees of:
- Basic standards of fairness in the mortgage process, including an end to dual-track foreclosures
- Transparency in the mortgage process, including a single point of contact for homeowners
- Community tools to prevent blight after banks foreclosed upon homes
- Tenant protections after foreclosures
- Enhanced law enforcement to defend homeowner rights – paid for by fees imposed on banks
- A special grand jury to investigate financial and foreclosure crime (Visit www.oag.ca.gov for more info)
Henry Walker, CEO of Farmers and Merchants Bank, stood before the Long Beach City Council stated that these proposed Homeowners Bill of Rights would continue to damage the banking industry. He even went so far as to praise the the existing home foreclosure process and that borrowers already had rights when they signed notes agreeing to repay the home loans and for the state to to interfere with those contractual loan obligations is wrong and, “in fact I almost think it’s un-American.”
In reply to Walker’s outburst: It is established case law that, “The most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created.”
Or in the infamous words of “J” played by Will Smith in Men in Black: “Don’t start…there won’t be none!”
The U.S. Treasury’s Office of Thrift Supervision noted in 2010 that, The FBI estimates that 80 percent of all mortgage fraud involves collaboration or collusion by industry insiders.”
This confirms what one of the country’s top fraud experts, William K. Black, professor of economics and law and senior regulator during the Savings and Loan crisis in 1980s, has said for years that it was fraud by the big banks – more than anything done by the little guy – which caused the financial crisis.
The lenders have proven time and time again that they cannot be simply left to their own devices. Do I even need to mention the $2 billion-plus lost by J. P. Morgan with no accountability? Foreclosures and bankruptcies have always been with us, but never in the epidemic proportions that we are finding today. The bankers cannot possibly expect us to believe that millions of families responsible enough to want to own their own home to care for their families were simply being “irresponsible deadbeats.”
Mr. Walker stated that the homeowners had rights when they signed the note and deed of trust. Can I see a show of hands for those who were allowed to negotiate the terms? Now, can I see a show of hands of those who are homeless now?
Often the argument by our officials and bankers has been that the home buyer has legal recourse. We filed a lawsuit in 2007 and we have yet to have our day in court. We are out-financed by the banks who have unlimited resources. Thus far, we have invested over $300,000 trying to save our home over and above our principle mortgage payments.
Let me outline one of the reasons why the lenders need regulations:
In 2009, Time magazine named Angelo Mozillo one of the “25 people to blame for the financial crisis.” CNN named Mozilo as one of the “Ten Most Wanted: Culprits” of the 2008 financial collapse in the United States.
Countrywide has made many settlements over the past five years due to their fraud:
Following is a list of settlements that not only acknowledge illegal behavior, but serve as evidence that the home-buyers were not the perpetrators of this fraud:
10/6/2008 – $8.68 billion dollar settlement with Countrywide for the State of California1 – relief for home-buyers – $0 – $100
8/3/2010 – $600 million dollar settlement with Countrywide Financial with the New York City Pension Funds2 – relief for homebuyers – 0
10/15/2010 – $67.5 million settlement with the SEC3 – relief for homebuyers – 0
2/2/2011 – Former Countrywide executives make a $6.5 million settlement with California4 – relief for homebuyers – 0
6/29/2011 – BofA settles with 22 institutional investors for 14 billion.5 – relief for homebuyers – 0
12/21/2011 – Countrywide settles bias suit for $335 million dollars for discrimination6 – relief for homebuyers – to be determined
Now we have a new settlement on the books. The $25 billion 48 state settlement! You know, the one where those who had been wrongly foreclosed upon were going to get as much as $2,000 each?
Well, it seems our Governor has budget problems…so the relief to the homebuyers looks like it’s going to be (you guessed it) ZERO!
With all the settlements and court cases regarding bank fraud still pending, the lenders are still allowed to foreclose and remove families from their homes. This is making countless families homeless and destroying the moral of millions of American citizens.
Former California treasurer and Democrat, Phil Angelides was quoted in the May 14 edition of Newsweek saying, “It is perplexing at best, and it’s deeply troubling at worst.” in regards to the lack of investigations and prosecutions in this housing debacle.
The public needs to stand up before it is too late and have lost our rights completely.
“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption in high places will follow, and the money-power of the country will endeavor to prolong it’s reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed.”–President Abraham Lincoln