May 21, 2013
Live Chat: Robert Scheer on Foreclosures
Posted on Oct 15, 2010
You can read the transcript below or listen to the audio version here:
Truthdig: OK, Bob, here goes the first question [from BJW in San Francisco]: How are new mortgages being treated differently now? Are they being packaged, sliced and sold the same way or are they kept with the bank? If we have a recently refinanced mortgage, how will we know if it is put into one of the packages by the lender? Are they required to notify the borrower? Are there some lenders such as Union Bank who were not involved or where can we find a list of lenders who were not involved in this mortgage racket?
Robert Scheer: Well, that’s an important question, and the reality is that it hasn’t changed at all. I mean, there are no real effective new regulations to building accountability. Securitization of mortgages is going on at a rapid rate, and we have no way of really knowing what happens to these mortgages, ’cause they’re allowed to do whatever they want with them. Resell them, slice and dice them, package them, and so forth. And so the quick and easy answer is: No, you have no way of knowing. And you know, you can challenge it, you can demand to have information, but at the end of the day your mortgage may be owned by someone else. And that’s why we needed new rules, and we didn’t get them.
Truthdig: OK, great. Thank you. We have the next question coming up. OK, the next question is: How are new mortgages being treated differently now?
RS: Well, again, they’re not. That’s the problem, that we have not learned from these mistakes. And the really big problem is that 65 million American mortgages are represented by a computer program in Reston, Va., called the MERS program, which is owned by Fannie Mae, Freddie Mac and the top banks. And so when you go into court, you’re really up against a robo-banker, you’re up against a computer system. And that’s why the courts all over the country are throwing cases out, and that’s why 50 attorneys general, Republicans and Democrats, in the states are objecting to the process. We have an amazing crisis now in American homeownership because we turned it over to a computer. The traditional system, where your county government kept track of mortgages, and when ownership changed—you know, let’s say the bank had the mortgage, they were registered as the owner down at the county courthouse, and then if somebody else bought it they had to change that, pay a fee, get a change. And that didn’t lend itself to the securitization of mortgages, treating mortgages as poker chips in the Wall Street casino. And in order to do that, to slice and dice them, and shift them around, and resell them, and sell them and so forth, they had to unhinge them from the system that had worked for centuries, where you knew who the owners were, and as I say it was kept locally. And instead it’s now kept by a computer bank in Reston, Va. And it’s what’s caused this incredible meltdown, and the banks themselves have had to declare a moratorium on foreclosures ’cause they can’t win their cases. So we have a tremendous mess right now.
RS: Well, you can’t do it on your own. To do it legally, government agencies, whether on the local level or federally, have got to step in and say, you know, we want to help people stay in their houses and if their houses are being abandoned, we want to be able to turn them over to people who need houses in some kind of way. And we’ll subsidize it, and we’ll get the paperwork going. That has … that can be done. I mean, that’s one way of stopping the meltdown. You can’t do it on your own, or you become a squatter. And one of the ironies of this is that the banks will use government to kick you out of a home—they’ll send the marshals—but they object when government will come in and look at the contract and tell you whether you’re defrauded or not, make sure the language is clear. So there’s a double standard. And then let me say something, by the way—Barack Obama has just appointed this guy Tom Donilon to be his national security adviser. And he said, “Donilon has a probing intellect and a remarkable work ethic.” This guy Donilon was the top lawyer at Fannie Mae, from 1999 to 2005 he was their chief lobbyist in Washington, arguing against any government regulation, any government control of this crazy stuff that was being done in the housing market. He’s now… so this guy made an enormous amount of money from the run-up of stock, and he’s rewarded with the most sensitive position in the United States government, being the head of our national security in the White House. And Obama applauds him. And to my mind, it’s a tip-off to not only Obama’s thinking, but that of the whole Democratic establishment. This guy’s wife, Catherine Russell, is chief of staff to Biden’s wife Jill. I mean, you know, these guys … what were they thinking? When they break bread together over dinner, do they talk about the tens of millions of people who are now suffering? We have 50 million people whose homes are … mortgages cost more than the house is worth. We have 10 million people who’ve lost their homes. And yet the guys who did it, they not only aren’t punished in any way, they’re rewarded. And I think this idea of taking this guy who at Fannie Mae was the chief counsel and argued against any kind of government supervision of this, and they’re making him in charge of our national security, tells you really a hell of a lot about Obama and who he listens to. I just find it shocking.
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