Financial Reform Endgame

Paul Krugman, NY Times

So here’s the situation. We’ve been through the second-worst financial crisis in the history of the world, and we’ve barely begun to recover: 29 million Americans either can’t find jobs or can’t find full-time work. Yet all momentum for serious banking reform has been lost. The question now seems to be whether we’ll get a watered-down bill or no bill at all. And I hate to say this, but the second option is starting to look preferable.

The problem, not too surprisingly, lies in the Senate, and mainly, though not entirely, with Republicans. The House has already passed a fairly strong reform bill, more or less along the lines proposed by the Obama administration, and the Senate could probably do the same if it operated on the principle of majority rule. But it doesn’t — and when you combine near-universal Republican opposition to serious reform with the wavering of some Democrats, prospects look bleak.

How did we get to this point? And should reform advocates accept the compromises that might yet produce some kind of bill?

Many opponents of the House version of banking reform present their position as one of principle. House Republicans, offering their alternative proposal, claimed that they would end banking excesses by introducing “market discipline” — basically, by promising not to rescue banks in the future.

Read more here:  http://www.nytimes.com/2010/03/01/opinion/01krugman.html?src=twt&twt=NytimesKrugman

War On 2 Fronts: Soldier Fights For Country While Fighting Foreclosure From Wells Fargo

Sam Ali, Luke Visconti and Barbara Frankel, DiversityInc.com

William Diaz of the 462nd Transportation Battalion feels like he’s fighting a war on two fronts. In April, the 39-year-old U.S. Army Reserve corporal is being deployed to Kuwait for a year-long tour.

But for the past few months, Diaz has been fighting another very painful battle in his own backyard: American Servicing Corp., a division of Wells Fargo, is seeking a court order to foreclose on his two-family home in Elizabeth, N.J., a predominately Latino city.

“I am being deployed. I can’t say no. If I do, I face court martial. But I feel like I am being forced to choose between my family and my duty to my country,” says Diaz.

His voice sounds drained as he recounts his ordeal. He began falling behind on his $4,600 monthly mortgage payment when his employer, New Penn Motor Express, cut his hourly wages by nearly 50 percent and scaled back his hours when the economy tanked. Then, tenants who were renting the other half of his two-family house for $1,300 a month abruptly moved out, leaving him to shoulder the entire monthly payment.

Diaz wants to make sure his wife and three children—Melanie, 15; William, 5; and Ayleen, 2—are taken care of before he leaves for Kuwait, “so I don’t have to keep looking back and worrying about whether my family has a roof over their heads or not.”

For cash-strapped families like his, all it takes is one hiccup—a jump in interest rates, an illness, the loss of a job, a pay cut—to find themselves staring down the barrel of financial ruin.

For cash-strapped families like his, all it takes is one hiccup—a jump in interest rates, an illness, the loss of a job, a pay cut—to find themselves staring down the barrel of financial ruin.

These days, the contrast between struggling families on Main Street and bankers on Wall Street who are prospering at their expense could not be sharper. In the midst of the worst financial crisis since the Great Depression, with the U.S. unemployment rate hitting 10 percent and more than 1.4 million Americans filing for bankruptcy in 2009, Goldman Sachs celebrated one of the most profitable years in its 141-year history. In January of this year, Goldman Sachs doled out a hefty $16 billion in bonuses for the 2009 year, up from $10.9 billion in 2008—a pretty staggering feat given that a little more than a year ago, Goldman was forced to take American-taxpayer dollars just to stay alive.

Read more here:  http://diversityinc.com/article/7177/How-Goldman-Sachs-Hurt-Black-Latino-Female-Households/

NY Foreclosure Mill Attorney Steven J. Baum & Chase In Hot Water

Richard Wilner, NY Post

As the mortgage melt down paralyzed the economy across the US and throughout New York State, one company in the center of the storm had all the business it could handle.

The little-known law firm of Steven J. Baum PC, which is based in suburban Buffalo, NY, and represents dozens of banks in matters of failed mortgages, last year filed a staggering 12,551 foreclosure lawsuits in New York City and the suburbs, which works out to about 48 a day.

The foreclosure mill is one of a handful of super-regional law firms used by the country’s banks — and its lawyers appear to have practiced in every county courthouse and bankruptcy court from Staten Island to Plattsburgh and from Montauk to Niagara Falls.

But as the volume of its workload increased, so did complaints from opposing lawyers and judges that some of the thousands of lawsuits contained questionable legal work.

One bank caught in the crosshairs is JPMorgan Chase Bank, one of the largest mortgage lenders in the city.

Last month, Diana Adams, the US Trustee in Manhattan, filed papers in court supporting punitive financial sanctions against the bank for a string of bad behavior, including seeking to foreclose on homes after they rejected the attempts to make on-time payments and for failing to prove they own the mortgage on a home even as they move to seize it.

Chase filed documents that appear to be patently false or misleading, Adams said in the filing.

Although Chase has recently taken steps to address concerns expressed by courts in connection with other cases, based on Chase’s past and current conduct it needs to be sanctioned, Adams wrote.

A spokesperson for Chase had no comment on the US Trustee’s action.

The complaints against Baum — on the record during hearings, in legal pleadings and, eventually, borne out in judges’ decisions — include:

* Not divulging mortgage payments: In the White Plains bankruptcy of Blanca Garcia, Baum’s firm filed papers claiming Garcia was in arrears — when she actually made payments and showed the court her receipts, but they were not credited to her account. When Garcia’s lawyer complained, Baum’s firm answered the claim but, the lawyer said in court papers, ignored the receipts and continued to claim the mortgage was in arrears.

* Creating questionable assignments: A Suffolk County judge took it upon himself to investigate a filing by Baum’s firm when it attempted to foreclose on the home of Gloria E. Marsh. “A careful review,” the judge wrote in a four-page order, “reveals a number of glaring discrepancies and unexplained issues of substance.”

Whistleblower says he was prepared to murder Bernard Madoff

Jerry Kronenberg, Boston Herald

The Boston financial whiz who tried for years to expose Bernard Madoff reveals in an explosive new memoir that he made plans to murder the Ponzi schemer if necessary.

“If (Madoff) contacted me and threatened me, I was going to go down to New York and take him out,” Whitman resident Harry Markopolos writes in “No One Would Listen,” due in bookstores Tuesday. “At that point, it would have come down to him or me, (and) I felt I had no other options: I was going to kill him.”

“No One Would Listen” tracks Markopolos’ eight-year odyssey to warn the U.S. Securities and Exchange Commission that Madoff was running the largest investment scam in history.

Working for a Boston financial firm in 2000, Markopolos discovered the $65 billion Ponzi scheme while trying to reproduce Madoff’s unbelievable investment returns.

However, the SEC ignored Markopolos’ numerous warnings, and the scam only collapsed when Madoff turned himself in on Dec. 11, 2008. The global market meltdown had left the crook unable to come up with money his clients were clamoring to get back.

Markopolos, who skewered the SEC in televised testimony before Congress last year, has previously said he feared for his life during his long quest.

After all, Madoff faced years in prison if caught, and Markopolos thinks the scam’s victims included mobsters and drug dealers he believes laundered money through Madoff.

But in his book, Markopolos reveals for the first time just how far he went to protect himself.

http://bostonherald.com/business/general/view.bg?articleid=1236008&position=0

Next Page »