SYNDICATED COLUMN: Foreclose on the Banks
How to Give America Its Best Christmas Ever
Citibank is suspending foreclosures and evictions for 30 days, until after the holidays.
Mighty white of them.
Who knew bankers could be so amusing? In an interview, Citi mortgage czar Sanjiv Das acknowledged that "moratoriums are not permanent solutions" and said his company was looking for "some long-term fundamental alternatives" to throwing people out of their homes because they've fallen behind on their payments. But he didn't offer a specific example.
Here, allow me. There's one "long-term fundamental alternative" that's righteous, makes sense, and legal: Let's foreclose on the banks. It's time for the U.S. government to show Mr. Das and his buddies down at the country club who is the boss.
Seriously. Yes we can.
But first, let's go back to February 2009. Ah, February: a new president, hope and change in the air. Especially for bankers. President Obama's TARP program doled out hundreds of billions of federal taxdollars to gangster capitalists like Citibank and Bank of America, which get off on charging $4 for using ATMs and 29.99 percent interest in credit cards.
The big banks were supposed to use TARP cash to buy back "toxic assets" backed by home loans to distressed homeowners, thus loosening the mortgage credit market. In fact, The Los Angeles Times reported a few days ago, "The fund has done little to address that problem directly." Instead, the feds bought bank stock at over-market prices.
In exchange for those bailouts, the banks were expected to free up credit.
They didn't. They haven't. Instead, they gave obscene raises to their already overpaid executives. They remodeled their plush offices. Now their loan officers are sitting on their hands, laughing all the way to their own banks.
There's still money in the U.S. economy. But it's not moving around—and extreme lack of liquidity is the definition of a Depression with no end in sight. As anyone who runs a small business can attest, the same dirtbag bankers who were lending to anyone and everyone two years ago have suddenly become tightwad tight-asses. Consumers with high credit ratings have seen their credit limits slashed. Banks are even refusing to refinance high-interest home loans at today's rates, reasoning that lower property values have reduced the value of their collateral—thus ensuring still more foreclosures in 2010.
Because the Obama Administration didn't pressure them, the banks stonewalled the president's $75 billion loan modification program, which was supposed to reduce payments for the approximately ten million Americans who face foreclosure. JPMorganChase, for example, blew off or rejected 85 percent of homeowners who asked them for help. That's better than Citibank, which enrolled 100,000 distressed homeowners in the program but only managed to actually modify loans to 270. And it's a lot better than Bank of America, bringing up the rear with a pathetic whopping 98 modifications out of the 160,000 borrowers who signed up as of the end of November.
More lowlights:
One out of seven American homeowners will probably lose their homes by the end of 2010.
Only 4.7 percent of distressed homeowners who enrolled in the modification plan have gotten any help.
Out of Obama's $75 billion program, only $2.3 million has been spent—or 0.03 percent.
Obama's performance on the foreclosure crisis—along with unemployment, the biggest problem America faces—makes Bush's laissez faire approach to Hurricane Katrina look caring and loving in comparison. If ever there were a cause for impeachment, look no further.
No doubt recognizing political peril, Obama is now attempting to jawbone the banks into doing the right thing, even calling banking CEOs "fat cats" on "60 Minutes." Whatever.
"America’s banks received extraordinary assistance from American taxpayers to rebuild their industry,” Obama said after meeting with banking executives. “Now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy." But there were no teeth in his demand—just a polite pretty-please with a trillion-dollar-plus bailout on top.
But that's Obama's choice. If he wanted, he could foreclose on the banks—and personally give millions of desperate homeowners the best Christmas ever.
Here's how.
True, the Treasury Department didn't receive any written assurances from the banks that they would start lending again when they collected their bailout loot back in February. But as Obama recalled in the above quote, it was widely understood at the time that the federal government expected looser credit markets in exchange for the bailout. There were thousands of reports in the media to this effect, hundreds of statements by government officials, and—no doubt—dozens of discussions between government and bank lawyers to this effect. No one was confused. Everyone got it at the time.
Obviously Obama should have gotten it in writing. But the bailout-for-credit quid pro quo was a widely witnessed oral contract. And oral contracts are just as legally binding as written ones.
The classic example of an oral contract is two roommates who agree to share an apartment. The lease may be in the name of one person, but the non-leaseholder may not skip out on the rent. But the stakes can be bigger. Pennzoil made a handshake deal—no contract—to buy Getty Oil in 1984 but then reneged in favor of another suitor, Texaco. Pennzoil sued and won $11.1 billion in damages.
The United States government could, and should, sue Citibank, Bank of America, JPMorganChase and other defaulting miscreants for breach of contract. With one out of seven Americans having been foreclosed upon by one of these institutions, it would be difficult to imagine any jury finding them not guilty. Mercy, after all, wasn't something these banks showed their victims.
Since damages would likely exceed the defendants' ability to pay, the U.S. could then seize the banks. The newly nationalized banks, owned by we the people, could reduce or cancel outstanding mortgages to the unemployed, sick and other worthies. They could increase credit lines and start making loans again—you know, do what they promised to do. It wouldn't necessarily get us out of the Depression. But it would be a beginning.
Foreclose on the banks! It's fair. It's smart. And it's long overdue.
(Ted Rall is the author, with Pablo G. Callejo, of the new graphic memoir "The Year of Loving Dangerously.")
COPYRIGHT 2009 TED RALL
Citibank is suspending foreclosures and evictions for 30 days, until after the holidays.
Mighty white of them.
Who knew bankers could be so amusing? In an interview, Citi mortgage czar Sanjiv Das acknowledged that "moratoriums are not permanent solutions" and said his company was looking for "some long-term fundamental alternatives" to throwing people out of their homes because they've fallen behind on their payments. But he didn't offer a specific example.
Here, allow me. There's one "long-term fundamental alternative" that's righteous, makes sense, and legal: Let's foreclose on the banks. It's time for the U.S. government to show Mr. Das and his buddies down at the country club who is the boss.
Seriously. Yes we can.
But first, let's go back to February 2009. Ah, February: a new president, hope and change in the air. Especially for bankers. President Obama's TARP program doled out hundreds of billions of federal taxdollars to gangster capitalists like Citibank and Bank of America, which get off on charging $4 for using ATMs and 29.99 percent interest in credit cards.
The big banks were supposed to use TARP cash to buy back "toxic assets" backed by home loans to distressed homeowners, thus loosening the mortgage credit market. In fact, The Los Angeles Times reported a few days ago, "The fund has done little to address that problem directly." Instead, the feds bought bank stock at over-market prices.
In exchange for those bailouts, the banks were expected to free up credit.
They didn't. They haven't. Instead, they gave obscene raises to their already overpaid executives. They remodeled their plush offices. Now their loan officers are sitting on their hands, laughing all the way to their own banks.
There's still money in the U.S. economy. But it's not moving around—and extreme lack of liquidity is the definition of a Depression with no end in sight. As anyone who runs a small business can attest, the same dirtbag bankers who were lending to anyone and everyone two years ago have suddenly become tightwad tight-asses. Consumers with high credit ratings have seen their credit limits slashed. Banks are even refusing to refinance high-interest home loans at today's rates, reasoning that lower property values have reduced the value of their collateral—thus ensuring still more foreclosures in 2010.
Because the Obama Administration didn't pressure them, the banks stonewalled the president's $75 billion loan modification program, which was supposed to reduce payments for the approximately ten million Americans who face foreclosure. JPMorganChase, for example, blew off or rejected 85 percent of homeowners who asked them for help. That's better than Citibank, which enrolled 100,000 distressed homeowners in the program but only managed to actually modify loans to 270. And it's a lot better than Bank of America, bringing up the rear with a pathetic whopping 98 modifications out of the 160,000 borrowers who signed up as of the end of November.
More lowlights:
One out of seven American homeowners will probably lose their homes by the end of 2010.
Only 4.7 percent of distressed homeowners who enrolled in the modification plan have gotten any help.
Out of Obama's $75 billion program, only $2.3 million has been spent—or 0.03 percent.
Obama's performance on the foreclosure crisis—along with unemployment, the biggest problem America faces—makes Bush's laissez faire approach to Hurricane Katrina look caring and loving in comparison. If ever there were a cause for impeachment, look no further.
No doubt recognizing political peril, Obama is now attempting to jawbone the banks into doing the right thing, even calling banking CEOs "fat cats" on "60 Minutes." Whatever.
"America’s banks received extraordinary assistance from American taxpayers to rebuild their industry,” Obama said after meeting with banking executives. “Now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy." But there were no teeth in his demand—just a polite pretty-please with a trillion-dollar-plus bailout on top.
But that's Obama's choice. If he wanted, he could foreclose on the banks—and personally give millions of desperate homeowners the best Christmas ever.
Here's how.
True, the Treasury Department didn't receive any written assurances from the banks that they would start lending again when they collected their bailout loot back in February. But as Obama recalled in the above quote, it was widely understood at the time that the federal government expected looser credit markets in exchange for the bailout. There were thousands of reports in the media to this effect, hundreds of statements by government officials, and—no doubt—dozens of discussions between government and bank lawyers to this effect. No one was confused. Everyone got it at the time.
Obviously Obama should have gotten it in writing. But the bailout-for-credit quid pro quo was a widely witnessed oral contract. And oral contracts are just as legally binding as written ones.
The classic example of an oral contract is two roommates who agree to share an apartment. The lease may be in the name of one person, but the non-leaseholder may not skip out on the rent. But the stakes can be bigger. Pennzoil made a handshake deal—no contract—to buy Getty Oil in 1984 but then reneged in favor of another suitor, Texaco. Pennzoil sued and won $11.1 billion in damages.
The United States government could, and should, sue Citibank, Bank of America, JPMorganChase and other defaulting miscreants for breach of contract. With one out of seven Americans having been foreclosed upon by one of these institutions, it would be difficult to imagine any jury finding them not guilty. Mercy, after all, wasn't something these banks showed their victims.
Since damages would likely exceed the defendants' ability to pay, the U.S. could then seize the banks. The newly nationalized banks, owned by we the people, could reduce or cancel outstanding mortgages to the unemployed, sick and other worthies. They could increase credit lines and start making loans again—you know, do what they promised to do. It wouldn't necessarily get us out of the Depression. But it would be a beginning.
Foreclose on the banks! It's fair. It's smart. And it's long overdue.
(Ted Rall is the author, with Pablo G. Callejo, of the new graphic memoir "The Year of Loving Dangerously.")
COPYRIGHT 2009 TED RALL
posted by Ted Rall at
5:01 PM
15 Comments:
It bears repeating that Citibank used to be the City Bank of New York. City Bank's crazed speculative investments in the twenties went hand in hand with the stock market crash of 1929.
It bears repeating. It bears repeating. It bears repeating.
I don't want to be a jerk, but your understanding of law is woefully inadequate. You can't sue someone based on something "everyone knew about." If you're claiming an oral contract, there must have been an offer, acceptance, and clear and definite terms. The exact period of negotiation doesn't have to be specified, but there has to be some kind of terms to go off of! And on top of that you need an actor with authority to have made the deal. So if everything said was "subject to final authorization by X" and X never did it, then it doesn't count... TALKING DOES NOT EQUAL A DEAL. And as for the Penzoil case, that was an example of a company creating a situation where 99% of a deal was completed and then they tried to renege. Generally, you can't do that. That's very different from saying "Well you alluded to X so now don't you think you should do X?" And I really don't see this falling under the statute of frauds either.
So, this is a silly argument.
Why bother writing pieces like this? Does it make you feel better? Obama has made it clear he's corporate America's servant. Their slave. That's right I said it. Obama is corporate America's slave. Nader was right. Obama's an Uncle Tom to corporate America. Talk about impeachment. If this health bill passes with the mandate, there will be blood in the streets. This will be the turning point.
Interesting. Can you provide some links? I only found this article
http://www.marketwatch.com/story/obama-loan-modification-program-moving-slowly-2009-12-10?reflink=MW_news_stmp
By this one it looks like all the banks pretty much suck. They'd do better to let the homeowners apply directly to the government and dole the $75B out that way.
Your cartoon in the LA Times of 17 dec'09 at last depicts a class-race fact: people to cheap to drive are not wanted in American airports. I have schlepped my baggage for a block W/out sidewalks between the airport shuttle and the MTA bus depot.
"Public transportation" creates bantastands very effectively. When i requested a schedule for the MTA Metrolink at the MTA Crenshaw Mall storefront, they insisted they did not ever have such a schedule, and called LAPD on me.
LAPD agreed with ME, and walked away. I have 20 years of white-on-poor stories to tell. http://rsof.org Thanks
P.S. "Fares" collected on the MTA blue line do not pay for the cost of collecting those "fares".
New turnstiles in MTA Metrostations will never return their cost.
$34 is added to each Metrolink "fare" to pay for the one trip, 60 cents to a MTA Bus rider's "fare".
Rail death in America DOUBLED the first 12 months that the MTA BlueLine opened.
AND, i always take Greyhound, et al, to listen to my fellow Americans: i rode for 5 days from LA to DC and back in November 2001, there were less than 10 flags on cars east of Denver, west of Pittsburgh BOTH WAYS.
Expertly said, Ted. Foreclose on Old Mr. Potter and his minions. I'll spread the word.
I tend to avoid trendy internet phrases, but WTF??? Maybe it's because I don't read the LA Times, but LAquaker's comment made absolutely no sense to me. Here's what I gathered, with no help from the quaker website to which he/she so graciously provided a link: White people are mean to poor people (despite most poor people in this country being white, and vice versa. This of course is my parenthetical statement, not LAquaker's). Taking public transit to the airport is a bitch (I've done it, it is!). And, immediately post-9/11 (there I go again with the trendy phraseology), most of the car-flags were confined to the coasts. That may very well be true, as I was on the west coast (well, Seattle)at the time and I saw SHITLOADS of flags on cars. I'm sure this will all make sense once I see the cartoon in question. That is all.
Here is a novel idea: How about all the people who signed a contract to borrow money and pay it back actually pay it back or go bankrupt. It's not anyone's fault except the person who borrowed the money. Suck it up loosers.
What about all the dead people that borrowed money? How are they supposed to pay it back? Sure, the banks were rather short-sighted to go around loaning money to dead deadbeats with no living income. But that doesn't mean that the corpses should abdicate all responsibility for the mortgage that the bank assigned to them.
Forget all the cases just close the window. Yes close the window. Banks get money for "free" then use it to make profit. That money comes from uncle sam you know guvmint, aka you. Close it, find out where the "profits went. If people knew the money wasn't just going to fatcats amercns they would be even more incensed. Imagine not just being scammed three or four times and holding the bag, but the banks also paying off their bets to foreign entities who could do damage politically.
Just close the window. Regular banks were for the most part not involved. This is the gambling houses. They got together with the powers and did another round of take from the country and give to the rich. In this case it is to possibly finish us off. Oh and pay debts to not just themselves but to others. Circle the wagons.
Oh well. ps .003 percent?
Sure, the banks were rather short-sighted to go around loaning money to dead deadbeats with no living income.
This wasn't the banks idea. A bank would not lend to someone who couldn't prove they could repay it, unless the government forced them to, and guaranteed to back the loan.
So what you're saying is that the government forced the banks to arrange mortgages for the dead? I'd like to see the policy document that arranged that particular piece of fraud. I'd also like to see where the government forced the banks to play the shell game with derivatives to such an extent that the banks are not sure who actually owns many of these properties. Surely that's some gummint bureaucracy at work.
Some of the commenters remind me of why Stalin is still popular in the former USSR, and why the French Revolution occurred.
Usually I disagree with every word Mr Rall writes...I find his cynicism annoying and his opinions far fetched and inconsistent...but this column of his was literally the first I have read that I agree with 100% (Hey, there's a first time for everything...even an old Liberal like myself can admit THAT!...;)
Foreclosures on the banks...BRILLIANT. Now if only Ted could remain so level headed the NEXT time he decides to attempt to smear Obama, that would be a GREAT Christmas gift...;)
K
I say we let them keep their jobs, then during a board meeting some nice men with AKs enter the room and ventilate them all. Either that or blow up Beverly Hills as a reprisal. Madoff got life instead of a firing squad which means he is wasting taxpayer money rotting in jail - better to destroy the theiving scum outright then waste time jailing them.
- mr. mike
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