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/

Miami-Dade foreclosure auction site baffles bargain hunters

By TOLUSE OLORUNNIPA, Miami Herald

A new online foreclosure auction system started with a mission of quickly moving a chunk of foreclosed properties while opening up the bidding process to regular folks.

A little more than a month later, some of the newcomers who bought property online say they were misled by the site and ended up spending thousands of dollars on condo liens and properties laden with hefty mortgages.

In some cases, after purchasing, they found the properties were still subject to foreclosure.

Miami-Dade County Clerk of Courts Harvey Ruvin said the online auction process is working as planned, and the few complaints he has received have come from people who did not take the time to understand the process.

The site has sold more than 1,500 homes in its first four weeks, with buyers hailing from all over the world. The clerk expects the number of homes sold each week to continue to rise, eventually reaching as many 2,000 a week, a pace that will help cut into the cumbersome backlog of more than 100,000 foreclosure filings.

Those who have lost money point to the disconnect between the website’s buyer-beware disclaimers, and the county’s attempts to promote the site as simple and straightforward “just like eBay.”

Read more here: http://www.miamiherald.com/business/story/1488235.html

Banks Raise Army of Lobbyists To Storm The Steps Of Congress To Fight Reform

Expenditures jumped 12% to $29.8 million last year among the eight financial firms that spent the most to influence legislation.

By Nathaniel Popper, LA Times

Even as the financial industry has sought to keep a low public profile, some of the country’s largest banks have ramped up their spending on lobbying to fight off some of the stiffest regulatory proposals pending in Congress.

Lobbying expenditures jumped 12% from 2008 to $29.8 million last year among the eight banks and private equity firms that spent the most to influence legislation, according to data compiled from disclosure forms filed with Congress.

The biggest spender was JPMorgan Chase & Co., whose lobbying budget rose 12% to $6.2 million, enough for the firm to have more than 30 lobbyists working for it. Among other banks, spending on lobbying rose 27% at Wells Fargo & Co. and 16% at Morgan Stanley.

“I have never seen such a scrum of bank lobbyists as I have in the last year — and I’ve worked on quite a few bank issues over the years,” said Ed Mierzwinski, a lobbyist for the U.S. Public Interest Research Group, a coalition of state consumer organizations. “It seems like everybody is out of work except for bank lobbyists.”

Much of the increase in spending on lobbying in 2009 came in the final three months of the year as Congress voted on financial reform bills. Many Washington observers say industry lobbying has been even more intense this year, as President Obama has proposed a new tax on big banks, caps on their size, and curbs on their investment in often lucrative but risky hedge funds and private equity funds.

“This is a watershed moment,” said Scott Talbott, a lobbyist for the Financial Services Roundtable, which represents about 100 of the largest financial firms. “The industry will be changed forever after this year.”

Bank lobbyists, however, are trying to limit just how much the industry has to change. They are fighting some provisions in the Obama administration’s broad industry-overhaul proposal, especially a plan to create a consumer protection agency to oversee financial services.

The House passed its version of the legislation in December. But its prospects are uncertain in the Senate, where talks between Republicans and Democrats on a compromise version recently broke down.

At a hearing this month, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), who has had a generally warm relationship with the financial community, lashed out at the “refusal of large firms to work constructively with Congress.”

“Too many people in the industry have decided to invest in an army of lobbyists, whose only mission is to kill the common-sense financial reforms that we are working so hard up here to try to achieve,” Dodd said.

Read more here: http://www.latimes.com/business/la-fi-bank-lobbying16-2010feb16,0,1048819,print.story

60 Minutes had a great segment last night about Ponzi Schemes

The whole segment can be seen here on The Huffington Post:

http://www.huffingtonpost.com/2010/02/15/janet-tavakoli-wall-stree_n_462791.html

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