Do Public/Private Partnerships Bail Out Homeowners, or Compensate Criminals?
If a mortgage loan servicing representative were
honest when speaking to an alleged borrower seeking mortgage loan assistance,
he or she might say this:
"If protecting my
company's best financial self-interest helps you out, fine. If it doesn't, that's fine, too. To us, you are a cash cow. You see, we get paid whether you make your
payments or not. In fact, we get paid
more when your loan is delinquent, in default or in foreclosure. If by foreclosing and kicking you out of
your home our profit increases by a dollar more than if we allowed you to keep
your home, you had better start thinking about packing. But before we kick you to the curb, and in
order for me to earn a quarterly bonus, you and your family are gonna ride an emotional and financial roller
coaster to hell until I've squeezed every dollar from your pocket, and
every dime in fees I can outta this. Then we'll foreclose. Even if my
company has no legal right to do so."
But such honesty would result in that employee's immediate termination. Under capitalism, profit-first corporations are duty-bound to preserve, protect and expand upon their own best financial self-interest.
Based upon my own 30-plus years working in the foreclosure realm (the last 20 advocating for at-risk homeowners), it is my understanding, experience and belief that any so-called "relief" offered to financially distressed homeowners by their alleged lenders is overwhelmingly incidental to and irrespective of the greater benefit derived by the financial institution offering the relief.
With increased public demand that foreclosing banks obey the laws, many foreclosure lawsuits are being withdrawn, or thrown out of court because Plaintiffs & Alleged Lenders have submitted (later discredited) manufactured documents shown to have been retroactively faked as proofs required by Section 3 of the Uniform Commercial Code. Or the litigants appear with no proof and are scolded, then walk away empty-handed with their tail between their legs. Unless and until homeowners challenge the validity of foreclosure actions, the banks' lawyers can bluff their way in court and win a judgment in foreclosure followed by the keys to the house.
Recently, many communities have responded favorably to media-reported proposals from venture/vulture capitalists (including Mortgage Resolution Partners) who seek public/private partnerships promoted as a strategy to mitigate past, present and future damages (to all interested parties) arising from unrelenting mortgage foreclosures--legitimate or not.
Don't get me wrong. I am all for using The People's power of Eminent Domain to seize toxic mortgage loans and other bank-owned real estate (OREO) and to have those properties banished to foreclosure limbo; and then to have an independent community non-profit authority implement strategies to preserve continued affordable home ownership for the members of the community.
Some would argue that the "people's power" of eminent domain is in fact a police power. But police power and whom the police men and woman actually work for is content for another blog essay.
But I AM NOT for using public funds to unjustly enrich the same gangster bankers who crashed the economy, stole your retirement funds and then bailed themselves out with your very own tax dollars. They lie, cheat, steal and offer courts of competent jurisdiction fraudulent documents as "proofs" that were used to justify the wrongful terrorizing of homeowners and then wrongly force them from their homes via 1) self-serving loan modifications, 2) coerced short sales, 3) accepting deeds in lieu of foreclosure, or 4) court- ordered physical evictions
The proposals (hereafter The Plan) call for using the (public) police power of eminent domain and (private) equity financial capital to seize certain, qualified toxic mortgage loans for the dual purpose of 1) compensating the "alleged" owners of possibly worthless mortgage notes, and 2) restructuring loan repayments to be more affordable to the alleged borrowers.
At first blush this idea sounds great, but could this be yet another backdoor bailout? Wolf in Sheep's Clothing? Wolf as predator. Or Sheep, as in We the Sheeple?
But The Plan doesn't call for the seizure and payment for all toxic mortgage notes. No, only the notes whose payment would directly benefit the private equity capitalists' clientele, the private-label mortgage securities which do not carry a government (FNMA or FHLMC) guarantee.
The morally bankrupt profit-before-people investment cartel and its lapdog US Congress, including the current sock puppet (fill in the blank) Occupant of the White House, got us into this mess. What makes any of us believe these same slick charlatans can fix it? We cannot hope to solve the problems we face today with the same level of thinking which created them.
Does The Plan fix the problem in such a way as to yield maximum widespread public benefit? Or is this yet another public bailout of the investment class disguised as a community benefit?
Based upon the well documented predatory and illegal practices employed by these "too big to fail" Ponzi scammers, we must ask ourselves, "Is there a catch?" Because there is always a catch. What's the catch? What are we missing?