Whistleblowing Wells Fargo loan officer describes years of fraudulent, criminal culture in the bank

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Beth Jacobson was a Wells Fargo loan officer who blew the whistle on the bank's predatory, racist loan-fraud in the runup to the 2008 financial crisis, which tanked the world's economy and nearly wiped out Wells Fargo (they were rescued with a $36B taxpayer-funded bailout). Read the rest

John Oliver on subprime auto-lending and its killswitches

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We've been following the trade in remote kill-switches for cars sold to subprime borrowers since 2009, and watched in dismay as they got worse and worse: though John Oliver's report on the billions inflating the subprime auto-lending bubble touches on these, he focuses on the economic factors -- sleaze, corruption, moral hazard -- driving the tech. Read the rest

How and why to short Uber

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Uber's $62.5B valuation is an utterly speculative bet on a company that can only pay out if many sub-bets pay off: the timely arrival of self-driving cars, widespread adoption of car-sharing (rather than private self-driving car ownership), no effective competition from other hailing companies (including those backed by the car manufactuers), regulatory reform to legalize its practices, and smooth sailing for its massive subprime lending program for its drivers. Read the rest

The last time there were this many unsold $100M+ homes on the market, the world economy imploded

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Depending on how much credence you give to "whisper listings," there are between 27 and 50 $100,000,000+ houses on the market; last year, only two houses in that bracket sold worldwide. Read the rest

Wells Fargo, who preyed on black borrowers, sponsors Black Lives Matter luncheon

Wells Fargo has been widely criticized for its predatory, deceptive practice of targeting black mortgage borrowers with subprime mortgages (whose teaser rates ballooned into unsustainable long-term rates after a few years), rather than offering those borrowers much cheaper and better mortgages that would not have led to widespread bankruptcy, foreclosure, and the destruction of hardworking families' live savings. Read the rest

A new, made-in-China subprime crisis

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As China's banks struggle under the weight of never-to-be-repaid subprime loans (which were turned into bonds using the same trick that produced the US/EU subprime crisis), the Chinese government is throwing money at them to loan out to ever-dodgier borrowers, just to change the ratio of delinquent debts to ones that have yet to turn delinquent. Read the rest

Charter schools are turning into the next subprime mortgages

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Subprime mortgages began as a project to extend credit to poor people to give them a bridge to home-ownership, but it did so by allowing unscrupulous lenders to offer credit on unfair terms, with government guarantees to back the loans, even the bad ones. Read the rest

Caterpillar's heavy vehicles are killswitched subprime computers on wheels

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In an earnings call in which Caterpillar execs explained their dismal takings to investors, Cat execs explained their plan to grow by leasing tractors to Chinese companies with crummy track-records for payment. Read the rest

Suit: Wells Fargo sent contractors to break into our house, loot family treasures rescued from Nazis

David Adier missed two mortgage payments on his home in Morris Township, NJ, so Wells Fargo, his mortgage lender, sent contractors who illegally broke in and "trashed-out" his home as though it was abandoned, stealing the family treasures his father smuggled out of Nazi-occupied France. Read the rest

Detroit News documents the decimation of one city block

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Over the holiday weekend, The Detroit News published a remarkable analysis of what happened in Detroit's foreclosure meltdown. One block on Greensboro Street saw 33 of 38 homes go into mortgage or tax foreclosure in the last ten years. Read the rest

Hedge funds buy swathes of foreclosed subprimes, force up rents, float rent-bonds

When a giant hedge fund is bidding on all the foreclosed houses in a poor neighborhood, living humans don't stand a chance -- but that's OK, because rapacious investors make great landlords. Read the rest

Realtors hire ruined millionaires to pretend to live in vacant megamansions

How do you imbue an empty mansion with the indefinable "energy" that comes from daily habitation? Find distressed rich people with nice furniture and precarious jobs at McDonald's to move in. Read the rest

Thatcher's slow-motion housing timebomb

James Meek's essay "Where will we live?" is a detailed, passionate history of the housing timebomb that is detonating in England today. Thatcher set the time in the 1980s, when she sold off public housing to tenants and forbade local governments from building more with the proceeds, and subsequent governments have done everything they can to fuel and intensify housing speculation and bubbles. And now single moms, disabled people, and elderly people are being evicted, families can't afford housing on anything less than a banker's salary, and pensioners are being doomed to decades of poverty by low interest rates that can't be raised, lest they burst the property speculation bubble.

Housing in the UK is a microcosm for everything wrong with neoliberalism: corruption, cronyism, grinding human misery, and funny accounting to prove that it's all working, honestly. Read the rest

Meet Educational Credit Management Corporation, the arm-breakers of the student debt racket

A private contractor to student debt-holders has a special legal department that goes to bankruptcy court to argue that student loans shouldn't be discharged in bankruptcy, ever. The Educational Credit Management Corporation contracts to the Department of Education, on whose behalf it argues (for example) that debtors who go bankrupt fighting pancreatic cancer should still have to pay back their student loans in full, because "Survival rates for younger patients tend to be higher."

Student debt is the most pernicious kind of debt. It's debt that you take on when you're a teenager, and it's the only debt that can be taken out of your Social Security check. But as bad as the student debt racket is (and it's bad -- no, I mean really bad), I hadn't quite clocked how depraved its bagmen and enforcers could be.

They've been censured by courts for their strongarm tactics, bills have been introduced to make them behave, but they seem unstoppable. Why not? The precarious job-market has convinced Americans to go into $1 trillion worth of student debt, and when that collapses, it'll make subprime look like small change. So, realistically, who's ever going to stop thug bill-collectors from torturing people with terrible illness, or caring for severely disabled loved ones, or facing other unimaginable hardship, in order to bleed whatever they can for the debt-holders who're depending on that trillion bucks being repaid? Read the rest

After the Meltdown: tracking the fortunes reaped by the bankers who tanked the economy

The Center for Public Integrity's After the Meltdown series documents the fate of the regulators, executives, and firms that were most directly responsible for the subprime meltdown, and demonstrates that the top bankers for firms like Lehman got unbelievably rich due to their failures, and are still in business with lucrative consulting firms (for example, Lehman CEO Richard Fuld walked away with several hundred million in cash and now has homes in three states and a personal consulting outfit). Consumerist's Chris Morran has done a great job of summarizing the findings: Read the rest

Unsealed court-settlement documents reveal banks stole $trillions' worth of houses

Back in 2012, the major US banks settled a federal mortgage-fraud lawsuit for $95,000,000. The suit was filed by Lynn Szymoniak, a white-collar fraud specialist, whose own house had been fraudulently foreclosed-upon. When the feds settled with the banks, the evidence detailing the scope of their fraud was sealed, but as of last week, those docs are unsealed, and Szymoniak is shouting them from the hills. The banks precipitated the subprime crash by "securitizing" mortgages -- turning mortgages into bonds that could be sold to people looking for investment income -- and the securitization process involved transferring title for homes several times over. This title-transfer has a formal legal procedure, and in the absence of that procedure, no sale had taken place. See where this is going?

The banks screwed up the title transfers. A lot. They sold bonds backed by houses they didn't own. When it came time to foreclose on those homes, they realized that they didn't actually own them, and so they committed felony after felony, forging the necessary documentation. They stole houses, by the neighborhood-load, and got away with it. The $1B settlement sounded like a big deal, back when the evidence was sealed. Now that Szymoniak's gotten it into the public eye, it's clear that $1B was a tiny slap on the wrist: the banks stole trillions of dollars' worth of houses from you and people like you, paid less than one percent in fines, and got to keep the homes. Read the rest

Bank forecloses on wrong house, changes locks, steals tons of stuff, won't compensate owner in full

On Popehat, Ken details the astounding story of Katie Barnett, whose home was burglarized by agents of the First National Bank of Wellston, Ohio, who mistook her house for one that they were foreclosing upon. The bank broke into her house, changed the locks, and got rid of many of Barnett's possessions.

The local police refuse to get involved, and the bank's CEO, Anthony S. Thorne, is refusing to reimburse her in full for her possessions, which were stolen and destroyed by his company. Thorne says that because Barnett can't produce receipts for all of her goods (because who does that?) (and also, even if she had, they'd have been in her burglarized house), and because her recollection of her stuff doesn't match the "inventory" of the bungling bank employees who stole everything she owned, he will not pay her full compensation. Read the rest

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