Caterpillar's heavy vehicles are killswitched subprime computers on wheels


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


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

Spanish locksmiths won't help banks evict people from their homes

As the subprime bubble continues to burst in Spain, locksmiths find themselves complicit in putting families out on the street. In Pamplona, the local locksmiths have banded together and will not accept work from the banks changing locks or opening doors, even though it's costing them business:

Tired of accompanying court officials to evict unemployed people as banks foreclosed mortgages, De Carlos consulted his fellow Pamplona locksmiths before Christmas. In no time at all, they came to an agreement. They would not do the dirty work of banks whose rash lending pumped up a housing bubble and then, after it popped, helped bring the country to its knees.

"It only took us 15 minutes to reach a decision," says De Carlos amid the racks of keys in the family's shop in the centre of this small northern city best known for its annual bull-runs and the adoration heaped on it by Ernest Hemingway in The Sun Also Rises. "We all had stories of jobs we had been on where families had been left on the street. When you set out all you have is an address and the name of the bank, but I recall an elderly, sick man who was barely given time to put his trousers on."

The logic behind their decision was clear and simple. While Spain's banks mop up billions of euros in public aid, they are also busy reclaiming homes that in some cases they lent silly money for. At the height of Spain's housing madness, banks were, in effect, offering mortgages of more than 100%.

Read the rest

17 year old builds a tiny house on wheels

Austin Hay began to build himself a tiny house when he was 17 and planning to move out his parents' place.

Billionaire timeshare CEO to employees: there'll be fewer jobs around here if Obama is re-elected

David Siegel, the billionaire CEO of the highly profitable Florida-based Westgate Resorts timeshare company, has sent a letter to all his employees implying that they'll all get fired if Obama is elected. Concerning Mr Siegel, ThinkProgress notes "Siegel earned national notoriety this year for his quest to build the biggest house in America, 'a sprawling, 90,000-square-foot mansion inspired by Versailles.'"

As most of you know our company, Westgate Resorts, has continued to succeed in spite of a very dismal economy. There is no question that the economy has changed for the worse and we have not seen any improvement over the past four years. In spite of all of the challenges we have faced, the good news is this: The economy doesn’t currently pose a threat to your job. What does threaten your job however, is another 4 years of the same Presidential administration. Of course, as your employer, I can’t tell you whom to vote for, and I certainly wouldn’t interfere with your right to vote for whomever you choose. In fact, I encourage you to vote for whomever you think will serve your interests the best.

However, let me share a few facts that might help you decide what is in your best interest.


So where am I going with all this? It’s quite simple. If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company. Rather than grow this company I will be forced to cut back.

Read the rest

Wells Fargo mistakenly forecloses on the wrong house, destroys elderly couple's entire lifetime's worth of possessions

Wells Fargo mistakenly foreclosed on a home that had no mortgage, sending in a crew to steal all and throw out all the elderly homeowners' belongings. Alvin Tjosaas helped his father build the family home in Twentynine Palms, CA when he was a teenager, and the couple raised their own children there. The Wells Fargo crew destroyed their entire lives' accumulation of personal possessions. Wells Fargo says it is "deeply sorry" and that it is "moving quickly to reach out to the family to resolve this unfortunate situation in an attempt to right this wrong."

More from CBSLA:

Alvin, a retired mason, built the home with his father when he was a teenager.

“I know every inch, every rock…my mom mixed all the cement by hand,” he said...

“My little kids (would) come out here and their dresses were the same color as the wildflowers,” said Alvin...

“When you put your heart into something…it makes me real sad. I’m just glad I have my sweetheart. We’ve been together a long time,” said Alvin.

Owners Lose Possessions After Home Near Twentynine Palms Is Mistakenly Foreclosed (via Reddit) Read the rest

Chinese-built ghost town in Angola - the first of many to come?

The BBC's Louise Redvers reports on the ghost town of Kilamba, Angola, a horrendously expensive high-rise enclave built by Chinese companies on a line of credit secured with Angolan oil, which has only seen 220 apartments out of 2800 sold. Kilamba is the most ambitious of several new towns being built outside of existing Angoloan cities by Chinese firms.

It's like a bizarro-world version of the Keynsian idea of getting the economy going by paying one group of laborers to dig holes and another to fill them in. But in this case, one group of workers are paid to pump oil, which is offshored to China. In exchange, a group of Chinese workers is paid to build a gate-guarded enclave for a non-existent pool of mega-rich locals that no one can afford to live in, and which gradually turns into a massive liability. Profit!

The place is eerily quiet, voices bouncing off all the fresh concrete and wide-open tarred roads.

There are hardly any cars and even fewer people, just dozens of repetitive rows of multi-coloured apartment buildings, their shutters sealed and their balconies empty.

Only a handful of the commercial units are occupied, mostly by utility companies, but there are no actual shops on site, and so - with the exception of a new hypermarket located at one entrance - there is nowhere to buy food.

After driving around for nearly 15 minutes and seeing no-one apart from Chinese labourers, many of whom appear to live in containers next to the site, I came across a tiny pocket of life at a school.

Read the rest

Notes from the bankruptcy of Stockton, CA

The LA Times's Diana Marcum tells the story of the bankruptcy of Stockton, California, a city of about 300,000 people, which has just filed for bankruptcy. The city -- and its developers -- borrowed heavily in the past decade to build a series of follies: a luxury hotel, a marina, a promenade, in a bid to lure people down from the Bay Area. Stockton is a boom-and-bust poster-child, and has just gone through the new AB 506 arbitration procedures set out for municipal defaults in California law, a drawn-out "death of a thousand meetings," and is still headed into bankruptcy.

Although a city of almost 300,000, Stockton is a place where many families have known one another for generations. The most impassioned speakers argued on behalf of others, with the main rallying cry a plea to keep health insurance for retirees with illnesses. A high school student spoke of his aunt, a retired city worker with cancer, and a retired fire chief spoke of his former secretary who cares for her ill husband.

"People look at me and say, 'Well he can afford his own insurance,' and I can," said Gary Gillis, the retired chief. "But how about the ones who mowed the lawns, went in the sewers, typed my letters? We have to protect the most vulnerable among us."

Experts say there are no clear answers to what comes next for Stockton or how its fall will affect the rest of the state. Other cities hit hard by the housing bust and state budget crisis are negotiating with employee unions for concessions and are watching to see if municipal bankruptcy proves medicine or poison.

Read the rest

Chase exec: we tricked naive borrowers into taking out subprime loans

An award-winning Chase vice-president has gone public with accusations that his bank deliberately tricked naive borrowers into taking out high-commission loans they could never pay back (his team wrote $2B in loans during the subprime bubble), putting the lie to the narrative that subprime was about greedy borrowers taking money they knew they shouldn't:

One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans.

These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up.

Theckston, who has a shelf full of awards that he won from Chase, such as “sales manager of the year,” showed me his 2006 performance review. It indicates that 60 percent of his evaluation depended on him increasing high-risk loans.

In late 2008, when the mortgage market collapsed, Theckston and most of his colleagues were laid off. He says he bears no animus toward Chase, but he does think it is profoundly unfair that troubled banks have been rescued while troubled homeowners have been evicted.

A Banker Speaks, With Regret (via Naked Capitalism) Read the rest

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