Why the revolution can't get here soon enough.

 

Yet another example of why we may need to take things into our own hands soon. I have read about dozens of such incidents ( usually involving Bank of America) and this is another one for the list.

 

Bankers continue to reap huge bonuses. Congressmen such as Barney Frank and Chris Dodd had their hand in setting up the subprime fiasco via the Community Reinvestment Act, which was pushed by groups such as ACORN.  Then we have Frank Raines: "In accordance with the mission of Fannie Mae to enable home ownership by a greater proportion of the population, Franklin Raines, while Chairman and CEO, began a pilot program in 1999 to issue bank loans to individuals with low to moderate income, and to ease credit requirements on loans that Fannie Mae purchased from banks. Raines promoted the program saying that it would allow consumers who were "a notch below what our current underwriting has required" to get home loans. The move was intended in part to increase the number of minority and low income home owners." Of course, Congress was on board with lending money to anyone who could fog a mirror. At any rate, on to the story that is the main rant of this post:

 

SEATTLE (Link)-- J.D. Butler was on his death bed when JP Morgan Chase invaded his home, according to his daughter, who said the intrusion left the waterfront home in shambles.

Celeste Butler says she couldn't get any answers from Chase, so her only option was to sue.

"I'm praying and hoping that this never happens to anyone else again," she said.

Butler says she took home video to document what happened to her father's waterfront home, which was ransacked while he fought for his life in the hospital. Drawers were turned upside down, and a locked china cabinet was broken into.

"They took 17th-century paintings," said Celeste.

Items that had been collected during a lifetime of service in the U.S. Navy were destroyed.

"When I left this house, everything was neat and clean in this room," said Celeste.

Celeste's attorney says Chase, J.D.'s mortgage company, is to blame.

"One of the terms in the mortgage papers is that the bank has the right to enter the property if it appears that the home is abandoned, so we believe that this event was orchestrated by the bank to allow the bank to initiate action against the Butler home," said Chris Davis, Celeste's attorney.

Chase says J.D. had fallen behind in payments. And if a loan is delinquent, Chase says it has the right to enter a house.

"We followed our policy to maintain a mortgaged property, especially during winter months when cold weather can damage property," Chase said.

The contractor Chase hired left orange stickers where the plumbing had been winterized. The mortgage company insists the house was disorganized when it initially checked on it.

But Celeste insists the payments had been made, and the Port Angeles house was neat when she left it.

"And the bank told me the mortgage was current," she said.

Now a court will have to decide who is in the right.

Celeste's father died in January. Her lawsuit claims Chase and its contractors unlawfully entered the house and caused her emotional stress.

"It's shocking because you don't expect a bank with a good reputation like Chase to be involved in this sort of thing,"(Edit: LMAO at that one) Davis said.

"It's pretty terrible when this happens to you lose a lot of things, so yeah, I'm praying and hoping that this never happens to anyone again," said Celeste.

Butler is now selling the house her father left behind. Her lawsuit, filed in King County, seeks unspecified damages from Chase and two contractors.

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It's high time to start stringing these clowns up.

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11.3 million underwater mortgages.

Some more good economic news from 247wallst.com : 

"There is a reason that 702 American banks, nearly one in ten, were on the FDIC “problem list” as of the end of 2009. A large number of small and mid-sized banks are burdened with home and commercial mortgages that are in default and may even go into foreclosure.

New data from First American CoreLogic shows why the solution to the problem banks face is so difficult to find. Eleven million, three hundreds thousand homes had underwater mortgages as of the fourth quarter of last year. That number represent 24% of all residential homes loans in America.The mortgage numbers are much worse when homes with equity of less than 5% are included. First American reports that ”an additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity.” That means that three out of ten homes have virtually no financial value to their owners.

The pressure that the home value trouble puts on banks is clear. The aggregate dollar value of negative equity was $801 billion at the end of last year, up $55 billion from $746 billion in Q3 2009. People who believe there is no hope of their homes ever having any economic value are more likely to default on mortgages, especially in an environment where unemployed and under-employed people make up 17% of the total available workforce nationwide. Many homeowners are as concerned about their employment future as they are about the value of their houses.

Problem home loans are concentrated in the regions where real estate values have fallen the most–Arizona, Florida, Nevada, Michigan, and California.  First American says that “among the top five states, the average negative equity share was 42 percent, compared to 15 percent for the remaining 45 states.” In other words, the odds are relatively high that some of the home owners in those states will never sell their houses for more than the amount of their mortgages. That creates a vicious cycle in which high numbers of people with underwater loans default in the states where real estate values have dropped the most. There is no easy way to create a foundation under home prices.

The FDIC has closed 20 banks this year, Five of those were in the five states where mortgage equity problems are at their worst. The agency closed 15 banks in December. Of those, five were in Arizona, Florida, Nevada, Michigan, or California. The bank failure and mortgage failure problems area inextricably linked.

The First American numbers do not leave much hope for a home price rebound this year. It is too hard to sell a house with an underwater mortgage because the bank has to be paid the balance of the loan in cash at closing. Many people do not even try make home payments or cannot afford to under those circumstances.  The Mortgage Bankers Association reported that a record 15% of American mortgage holders are either in foreclosure or at least one payment behind.

The difficulties that face small and mid-sized banks, which ultimately are a problem for the FDIC, are to a large extent still a fallout of the deteriorating real estate sector. The underwater mortgage problem is still growing and that almost certainly means bank closings will be high again this year as well.

Douglas A. McIntyre

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Hmmmmmm, I'm not sensing much hope and change. As long as the idiots still run the show, there won't be any.