About Me 0100: February 2011

Monday, February 21, 2011

foreclosure

Sen. Jeff Merkley has unveiled a six-part plan to address the ongoing foreclosure crisis and boost the nation’s troubled housing market. David Dayen was at the announcement of the plan in Portland on Tuesday, and reports.

The “colossal disappointment” of the HAMP loan modification program, according to Merkley, necessitates a restart to the national conversation of how to heal the decaying housing market. The confusion in the market, as well as the continued flood of foreclosures, creates uncertainty for working families and the economy. “We’re not going to see a true economic recovery until we do something about the broken housing market,” said Senator Merkley at the event. “I met with Portland homeowners today who dealt with months of confusing instructions to get a mortgage modification, only to be told 10 months later they didn’t qualify and their home was facing foreclosure. My plan will put homeowners first and foreclosures last.”

Here are the six points to the Merkley proposal:

A national short refinance program. When a bank sends a home into foreclosure, it becomes an REO property, to be sold at auction at a large loss for the investors. Instead of going through the long process of resale, with the attendant upkeep that has to be spent by the bank on the home, and the disruption to the property values from having a vacant home in their neighborhood, this short refi program would allow qualified families facing eviction to refinance to an FHA-guaranteed mortgage based on current property values and interest rates....

Ending dual track. The family highlighted at today’s event, Connie and Michael Umphress, were current on their mortgage when they sought a modification with Wells Fargo. The servicer encouraged them to miss a payment to qualify for the private modification, and then reduced the loan in the trial period. But at the same time, they pursued foreclosure actions. So Connie and Michael got foreclosure notices while they negotiated the modification process. Merkley’s plan would end this highly stressful dual track process, and suspend foreclosure actions while families sought a modification....

Single point of contact. Borrowers aiming for a modification usually talk to a different person at their servicer every single time they establish contact. This means they have to explain their situation all over again, and increases the possibility for mistakes. Merkley would establish a single point of contact between the borrower and the lender.

Third party review. Similar in spirit to Sen. Al Franken’s proposed Office of Homeowner Advocate, this would create an independent third-party review process for families facing foreclosure. It would check to see if the borrower explored every option to avoid foreclosure, and possibly initiate a mediation process with a sit-down between the borrower and the servicer....

Lifeline bankruptcy reform. This is basically cram-down, the ability for bankruptcy judges to treat primary residence mortgages the same way they treat vacation homes, second homes, boats or virtually any other asset....

Homebuyer’s tax credit. I’m not such a fan of this proposal, but as Merkley describes it, he would generally target it toward first-time homebuyers purchasing “modest” homes....

Merkley hopes his proposal would spark a conversation in Washington about how to fix the housing market. HAMP has completely failed; as Merkley noted today, less than $1 billion has been spent to mitigate foreclosures, out of a promised $50-75 billion. “We are not through the foreclosure crisis, so we must have a second national conversation,” Merkley said. He invited other proposals from members of Congress.

Merkley is absolutely right--we do have to have the second national conversation. The housing crisis hasn't diminished as home prices continue to fall, and more and more homeowners become underwater on their mortgages. The next solution should focus on stopping the foreclosure crisis--and foreclosure fraud--and keeping borrowers in their homes, rather than on keeping the banks profitable.

His second sentence is completely wrong and tells us that either he didn’t read the opinion or did and didn’t understand it.

His second sentence is:

He explicitly acknowledged that this ruling sets a precedent that has far-reaching implications for half of the mortgages in this country.

From the ruling:

The Court recognizes that an adverse ruling regarding MERS’s authority to assignmortgages or act on behalf of its member/lenders could have a significant impact on MERS andupon the lenders which do business with MERS throughout the United States. However, theCourt must resolve the instant matter by applying the laws as they exist today. It is up to thelegislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisiteauthority to assign mortgages under its current business practices. MERS and its partners madethe decision to create and operate under a business model that was designed in large part to avoidthe requirements of the traditional mortgage recording process. This Court does not accept theargument that because MERS may be involved with 50% of all residential mortgages in thecountry, that is reason enough for this Court to turn a blind eye to the fact that this process doesnot comply with the law.

from you:

(because the vast majority of the opinion is dicta – except for the part that finds that MERS can seize the house – it expressly doesn’t hold _anything_)

From the ruling:

Therefore, the Court finds that the Assignment of Mortgage is not sufficient to establish an effective assignment of the Note.

Therefore, the Court finds that Movant has not satisfied its burden of showing that U.S. Bank, the party on whose behalf Movant seeks relief from stay, is the holder of the Note.

The Court agrees with the reasoning and the analysis inBoulouteandAlderazi, and theother cases cited herein and finds that the Mortgage, by naming MERS a “nominee,” and/or“mortgagee of record” did not bestow authority upon MERS to assign the Mortgage.

The Court finds that the record of this case is insufficient to prove that an agencyrelationship exists under the laws of the state of New York between MERS and its members.

This Court finds that MERS’s theory that it can act as a “common agent” for undisclosedprincipals is not support by the law. The relationship between MERS and its lenders and itsdistortion of its alleged “nominee” status was appropriately described by the Supreme Court of Kansas as follows: “The parties appear to have defined the word [nominee] in much the sameway that the blind men of Indian legend described an elephant – their description depended onwhich part they were touching at any given time.”Landmark Nat’l Bank v. Kesler , 216 P.3d158, 166-67 (Kan. 2010).

Sounds to me like the court did make several findings regarding MERS…

That he misunderstands very, very basic stuff suggests you read him skeptically.

Indeed.

The Ruling: http://www.scribd.com/doc/48827432/In-Re-Agard-48750818-US-Bankruptcy-Court-New-York-Memorandum-Decision

The article: http://www.huffingtonpost.com/l-randall-wray/new-yorks-us-bankruptcy-c_b_824167.html

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Thursday, February 17, 2011

Making Money on Line

Posted by:
Cuttlefish, OM |
February 8, 2011 9:46 AM

It does bother me a bit, when skeptics (including close friends) attempt to debunk homeopathy by pointing out that in some (the "more powerful" dilutions) preparations, there may be no molecule of the active ingredient left. That, by any naturalistic argument, homeopathy runs counter to hundreds of years of research in biology, chemistry, physics, and of course medicine. These skeptics are missing an important point: it's not supposed to work that way. They do not claim it works that way.

The way they claim it works is, when distilled (get it?) to its essence, magic. And magic need not follow the rules of the material. The homeopathic "overdoses", which make perfect sense from a naturalistic world view (you are taking more of the substance, after all, so it's an overdose) are not a disproof of the magical properties of the "cure" (which, when prepared by the proper procedure, gets stronger as it is more diluted). And homeopathic "proving" demonstrates that one cannot, by their rules (again, it is important not to project a naturalistic world view onto a magical process), simply assume that a given remedy will work for the skeptic who is attempting to overdose on it. (Yes, from a naturalistic world view, the "proving" process allows spontaneous remission, the natural course of an illness, and regression to the mean to be mistaken for a real cure, and here a double blind study can clearly show homeopathy to be utter horseshit, but that is an empirical disproof rather than a logical one which presumes a different axiomatic worldview, to wit, naturalism.)

And this explains why water does not just naturally retain the memory (as Tim Minchin so wonderfully puts it) "of all the poo it's had in it", having been diluted in rivers and streams, lakes and oceans. Succussion is a very precise process, and tremendously important to the activation of the vital properties of the cure; if not done properly, you might as well be waving your wand without saying "wingardium leviosa", or vice versa.

It works by magic; it does not claim to work by naturalistic means. (Rather, it doesn't work, but its claimed mechanism is magical.)

It's utter shite, but its practitioners can look at our naturalistic arguments and sneer that we don't understand. And they may have a homeopathically diluted point.

On the other tentacle, the majority of the remedy-buying public does not know this, so the overdoses are a good method to wake up the people who think that homeopathy is simply another form of medicine. And this is a Very Good Thing.

But we won't convince the true believers by rational arguments or demonstrations. I suggest a bit of practice: "Riddikulus!"

If conservatives have gone on the warpath over Barack Obama’s budget proposal, the progressives appear to be equally irate as well. CNN Money reports that liberal groups are accusing Obama of “right-wing radicalism” for proposing a mere $110 billion average in annual cuts over a ten-year period. But is this reality based, or an attempt at helping Obama claim centrist credibility?

The Progressive Change Campaign Committee, a liberal organization that boasts 700,000 members, took Obama to task before the budget was even officially released.

“Proposing even more tax breaks for Wall Street banks while slashing and burning necessary government programs is right-wing radicalism, and no Democratic president should be part of it,” the group said in a statement. …

“The budget proposal from President Obama is right from the Republican plan,” Rep. Jesse Jackson, Jr., a Democrat from Obama’s home state of Illinois said in a statement. “As the president, he should be the last line of defense for the most vulnerable Americans, instead of the first one to cut.”

Right-wing radicalism? Democrats hiked non-defense discretionary spending by 24% in three years; Obama promises to reduce it by around 15% or so. The howls over these retrenchments — they’re only cuts in Washington-speak — either act to demonstrate the lack of budgetary seriousness of the Left, or to provide Obama with a convenient counterpoint to strong criticism from the Right and the center over his extraordinarily weak budget plan.

One point may get lost in the overall budget debate, given its small contribution, but a proposed change in student loans are worth noting:

The budget proposed eliminating Pell grants for summer school, and making interest on federal loans for graduate students build up during school; currently, the interest tab doesn’t start running until after graduation.

Before last year, students could have shopped around for a better loan deal, including on the issue of deferred interest, had their lender proposed making a significant change that would land them deeper in debt. Obama’s success in creating a de facto nationalization of student loans means that most, if not all, students will have no choice but to accept the new terms.

If the Left hopes to help Obama look more centrist in his budget proposal, it doesn’t appear to be working. As John Sexton points out in a Green Room post, the Washington Post editorial board is certainly unimpressed, calling it a “punt” and dishonest as well:

THE PRESIDENT PUNTED. Having been given the chance, the cover and the push by the fiscal commission he created to take bold steps to raise revenue and curb entitlement spending, President Obama, in his fiscal 2012 budget proposal, chose instead to duck. To duck, and to mask some of the ducking with the sort of budgetary gimmicks he once derided…

The budget assumes that the full cost of the doc fix will be paid for, and therefore not add to the deficit, but fails to explain how. It includes a $328 billion magic asterisk for transportation funding, identified only as “bipartisan financing for Transportation Trust Fund.” Higher gasoline taxes? Don’t ask.

Dana Milbank rips Obama on his proposal, and not for his supposed “right-wing radicalism.” Obama managed to make “kicking the can” look good by comparison:

With the release of Obama’s budget proposal, Washington’s budgeting style can instead be described as tiptoeing past the can and hoping nobody notices.

Obama’s budget proposal is a remarkably weak and timid document. He proposes to cut only $1.1 trillion from federal deficits over the next decade – a pittance when you consider that the deficit this year alone is in the neighborhood of $1.5 trillion. The president makes no serious attempt at cutting entitlement programs that threaten to drive the government into insolvency.

Contrast that with the proposal by the heads of Obama’s fiscal commission, who outlined a way to cut $4 trillion from deficits through 2020, rein in entitlement spending, overhaul the tax code and reduce the government’s debt load. As commission co-chair Erskine Bowles, former chief of staff in Bill Clinton’s White House, told The Post’s Lori Montgomery, Obama’s budget is “nowhere near where they will have to go to resolve our fiscal nightmare.”

The best explanation the White House has come up with, uttered privately, is that Obama didn’t want to step out too far with politically unpopular cuts before congressional Republicans propose their own. And it’s true that Republicans haven’t yet committed to including entitlement reforms in their own 2012 budget. But even that doesn’t justify Obama’s feeble budget document, which squanders the little momentum built up by the fiscal commission.

No one’s going to buy Obama as a “right-wing radical,” especially not for his oh-so-bold proposal to shave off a mere 2.96% of the current federal budget, which is 42% deficit spending. As strategery goes, this is rather transparent … and pathetic.

Update: Yesterday, Paul Ryan said Obama’s budget was actually worse than doing nothing about the deficit. Steve Eggleston takes a look at that claim and says … Ryan’s right.

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