Journalism in the Public Interest

Dems: Obama Broke Pledge to Force Banks to Help Homeowners

Candidate Obama pledged to support real change in bankruptcy laws to help foundering homeowners. But when it came time to fight for the measure, he didn’t show up. Some Democrats now say his administration actually undermined it behind the scenes.

Rep. Zoe Lofgren, D-Calif. (Photo by Alex Wong/Getty Images)Before he took office, President Obama repeatedly promised voters and Democrats in Congress that he’d fight for changes to bankruptcy laws to help homeowners—a tough approach that would force banks to modify mortgages.

“I will change our bankruptcy laws to make it easier for families to stay in their homes,” Obama told supporters at a Colorado rally on September 16, 2008, the same day as the bailout of AIG.

Bankruptcy judges have long been barred from lowering mortgage payments on primary residences, though they could do it with nearly all other types of debt, even mortgages on vacation homes. Obama promised to change that, describing it as exactly “the kind of out-of-touch Washington loophole that makes no sense.”

But when it came time to fight for the measure, he didn’t show up. Some Democrats now say his administration actually undermined it behind the scenes.

“Their behavior did not well serve the country,” said Rep. Zoe Lofgren (D-CA), who led House negotiations to enact the change, known as “cramdown.” It was “extremely disappointing.”

Instead, the administration has relied on a voluntary program with few sticks, that simply offers banks incentives to modify mortgages. Known as Home Affordable Modification Program, or HAMP, the program was modeled after an industry plan. The administration also wrote it carefully to exclude millions of homeowners seen as undeserving.

The administration launched the program with a promise that it would help 3 million to 4 million homeowners avoid foreclosure, but it’s likely to fall far short of that goal. The Congressional Oversight Panel now estimates fewer than 800,000 homeowners will ultimately get lasting mortgage modifications.

Low Number of Modifications

Total Pool of Delinquencies

Total Mods Each Month

The number of modifications has remained dramatically low compared to the number of homeowners falling behind. (Source: LPS Applied Analytics and HOPE Now)

Over the past year, ProPublica has been exploring why the program has helped so few homeowners. Last week, we reported how the Treasury Department has allowed banks to break the program’s rules with few ramifications. The series is based on newly released data, lobbying disclosures, and dozens of interviews with insiders, members of Congress and others.

As the foreclosure crisis grew through 2008, the large banks that handle most mortgages were slow to offer modifications to struggling homeowners. Homeowners were left to navigate an onerous process that usually did not actually lower their mortgage payment. More than half of modifications kept the homeowner’s payment the same or actually increased it.

Many in Congress and elsewhere thought that mortgage servicers, the largest of which are the four largest banks, would make modifications only if they were pressured to do so.

Servicers work as intermediaries, handling homeowners’ mortgage payments on behalf of investors who own the loans. Since servicers don’t own the vast majority of the loans they service, they don’t take the loss if a home goes to foreclosure, making them reluctant to make the investments necessary to fulfill their obligations to help homeowners.

To force those servicers to modify mortgages, advocates pushed for a change to bankruptcy law giving judges the power not just to change interest rates but to reduce the overall amount owed on the loan, something servicers are loath to do.

Congressional Democrats had long been pushing a bill to enact cramdown and were encouraged by the fact that Obama had supported it, both in the Senate and on the campaign trail.

They thought cramdowns would serve as a stick, pushing banks to make modifications on their own.

“That was always the thought,” said Rep. Brad Miller (D-NC), “that judicial modifications would make voluntary modifications work. There would be the consequence that if the lenders didn’t [modify the loan], it might be done to them.”

When Obama unveiled his proposal to stem foreclosures a month after taking office, cramdown was a part of the package. But proponents say he’d already damaged cramdown’s chances of becoming law.

In the fall of 2008, Democrats saw a good opportunity to pass cramdown. The $700 billion TARP legislation was being considered, and lawmakers thought that with banks getting bailed out, the bill would be an ideal vehicle for also helping homeowners. But Obama, weeks away from his coming election, opposed that approach and instead pushed for a delay. He promised congressional Democrats that down the line he would “push hard to get cramdown into the law,” recalled Rep. Miller.

Four months later, the stimulus bill presented another potential vehicle for cramdown. But lawmakers say the White House again asked them to hold off, promising to push it later.

An attempt to include cramdown in a continuing resolution got the same response from the president.

“We would propose that this stuff be included and they kept punting,” said former Rep. Jim Marshall, a moderate Democrat from Georgia who had worked to sway other members of the moderate Blue Dog caucus on the issue.

“We got the impression this was an issue [the White House] would not go to the mat for as they did with health care reform,” said Bill Hampel, chief economist for the Credit Union National Association, which opposed cramdown and participated in Senate negotiations on the issue.

Privately, administration officials were ambivalent about the idea. At a Democratic caucus meeting weeks before the House voted on a bill that included cramdown, Treasury Secretary Tim Geithner “was really dismissive as to the utility of it,” said Rep. Lofgren.

Larry Summers, then the president’s chief economic adviser, also expressed doubts in private meetings, she said. “He was not supportive of this.”

The White House and Summers did not respond to requests for comment.

Treasury staffers began conversations with congressional aides by saying the administration supported cramdown and would then “follow up with a whole bunch of reasons” why it wasn’t a good idea, said an aide to a senior Democratic senator.

Homeowners, Treasury staffers argued, would take advantage of bankruptcy to get help they didn’t need. Treasury also stressed the effects of cramdown on the nation’s biggest banks, which were still fragile. The banks’ books could take a beating if too many consumers lured into bankruptcy by cramdown also had their home equity loans and credit card debt written down.

While the Obama administration was silent, the banking industry had long been mobilizing massive opposition to the measure.

"Every now and again an issue comes along that we believe would so fundamentally undermine the nature of the financial system that we have to take major efforts to oppose, and this is one of them," Floyd Stoner, the head lobbyist for the American Bankers Association, told an industry magazine.

With big banks hugely unpopular, the key opponents of cramdown were the nation’s community bankers, who argued that the law would force them to raise mortgage rates to cover the potential losses. Democratic leaders offered to exempt the politically popular smaller banks from the cramdown law, but no deal was reached.

“When you’re dealing with something like the bankruptcy issue, where all lenders stand pretty much in the same shoes, it shouldn’t be a surprise when the smaller and larger banks find common cause,” said Steve Verdier, a lobbyist for the Independent Community Bankers Association.

The lobbying by the community banks and credit unions proved fatal to the measure, lawmakers say. “The community banks went bonkers on this issue,” said former Sen. Chris Dodd (D-CT). With their opposition, he said, “you don’t win much.”

“It was a pitched battle to get it out of the House,” said Rep. Miller, with “all the effort coming from the Democratic leadership, not the Obama administration.”

The measure faced stark conservative opposition. It was opposed by Republicans in Congress and earlier by the Bush administration, who argued that government interference to change mortgage contracts would reduce the security of all kinds of future contracts.

“It undermines the foundation of the capitalist economy,” said Phillip Swagel, a Bush Treasury official. “What separates us from [Russian Prime Minister Vladimir] Putin is not retroactively changing contracts.”

After narrowly passing the House, cramdown was defeated when 12 Democrats joined Republicans to vote against it.

Many Democrats in Congress said they saw this as the death knell for the modification program, which would now have to rely on the cooperation of banks and other mortgage servicers to help homeowners.

“I never thought that it would work on a voluntary basis,” said Rep. Lofgren.

At the time that the new administration was frustrating proponents of cramdown, the administration was putting its energies into creating a voluntary program, turning to a plan already endorsed by the banking industry. Crafted in late 2008, the industry plan gave banks almost complete freedom in deciding which mortgages to modify and how.

The proposal was drafted by the Hope Now Alliance, a group billed as a broad coalition of the players affected by the mortgage crisis, including consumer groups, housing counselors, and banks. In fact, the Hope Now Alliance was headquartered in the offices of the Financial Services Roundtable, a powerful banking industry trade group. Hope Now’s lobbying disclosures were filed jointly with the Roundtable, and they show efforts to defeat cramdown and other mortgage bills supported by consumer groups.

The Hope Now plan aimed to boost the number of modifications by streamlining the process for calculating the new homeowner payments. In practice, because it was voluntary, it permitted servicers to continue offering few or unaffordable modifications.

The plan was replaced by the administration’s program after just a few months, but it proved influential. “The groundwork was already laid,” said Christine Eldarrat, an executive adviser at the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac. “Servicers were onboard, and we knew their feelings about certain guidelines.”

As an official Treasury Department account of its housing programs later put it, “The Obama Administration recognized the momentum in the private sector reflected in Hope Now’s efforts and sought to build upon it.” It makes no mention of cramdown as being needed to compel compliance.

Ultimately, HAMP kept the streamlined evaluation process of the Hope Now plan but made changes that would, in theory, push servicers to make more affordable modifications. If servicers chose to participate, they would receive incentive payments, up to $4,000, for each modification, and the private investors and lenders who owned the loans would also receive subsidies. In exchange, servicers would agree to follow rules for handling homeowner applications and make deeper cuts in mortgage payments. Servicers who chose not to participate could handle delinquent homeowners however they chose.

The program had to be voluntary, Treasury officials say, because the bailout bill did not contain the authority to compel banks to modify loans or follow any rules. A mandatory program requires congressional approval. The prospects for that were, and remain, dim, said Dodd. “Not even close.”

“The ideal would have been both [cramdown and HAMP],” said Rep. Barney Frank (D-MA), then the chairman of the House Financial Services Committee. But given the political constraints, HAMP on its own was “better than nothing.”

“We designed elegant programs that seemed to get all the incentives right to solve the problem,” said Karen Dynan, a former senior economist at the Federal Reserve. “What we learned is that the world is a really complicated place.”

The program was further limited by the administration’s concerns about using taxpayer dollars to help the wrong homeowners. The now-famous “rant” by a CNBC reporter, which fueled the creation of the Tea Party movement, was prompted by the idea that homeowners who had borrowed too much money might get help.

Candidate Obama had portrayed homeowners in a sympathetic light. But the president struck a cautious note when he unveiled the plan in February 2009. The program will “not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans,” said Obama. “It will not reward folks who bought homes they knew from the beginning they would never be able to afford.”

While the government had been relatively undiscriminating in its bank bailout, it would carefully vet homeowners seeking help. HAMP was written to exclude homeowners seen as undeserving, limiting the program’s reach to between 3 million and 4 million homes.

In order to prove their income was neither too high nor too low for the program, homeowners were asked to send in more documents than servicers had required previously, further taxing servicers’ limited capacity. As a result, some servicers say eligible homeowners have been kept out. According to one industry estimate, as many as 30 percent more homeowners would have received modifications without the additional demands for documentation.

A lot of the program is focused on “weeding out bad apples,” said Steven Horne, former Director of Servicing Risk Strategy at Fannie Mae. “Ninety percent is not focused on keeping more borrowers in their homes.”

Well, I think this is the difference between campaigning and governing. Once you are in office you have to consider the interests of all Americans, and I think the Obama administration took the right approach.

Taking out a loan entails risk. It is not a birthright, nor is anyone entitled to be able to own a home. There is always the risk of losing a job or undue health bills, and we all need to plan for those unforeseen calamities. Unless a lender was being unscrupulous in their lending practices, I think the onus is on the person who takes out a loan to pay it back. Foreclosure is natural consequence for not doing so.

Ryan Anderson

Feb. 4, 2011, 10:34 a.m.

Obama either:

A: Didn’t have the legal knowledge to know that such a statement of “forcing banks to modify mortgages” is near impossible.


B: Knew it would be impossible but made a great talking point (lie) to help get elected.


C: Just one of many obvious lies he made to get elected.

Michael Duclos

Feb. 4, 2011, 10:43 a.m.

It is clear that the administration works for and is slely concerned with the large international banking cartel.  Broken promises from this administration have always favored the banks.  The institutional fraud in forming these mortgage bonds and securities is well documented—yet not one prosecution has resulted.  The institutional fraud in mortgage foreclosures is well documented—yet not one prosecution has resulted.

The civil courts are starting to take a stand against fraudulent filings in foreclosure proceedings—an example of the last bit of integrity left in the system, and a credit to our Founding Fathers Constitution and separation of powers.  As for Congress?  They abdicated their power to the executive branch years ago and will provide little impediment to Obama Administration march toward a corporate controlled state.

And again, this issue is addressed while the main point is ignored.

Underwater homeowners in most states have the contractual right to return the home to the lender and walk away clear.  Read that again, then consider the article.  What most people have never grasped is that cramdown for these homes is not a favor to the homeowner, it’s a favor to the lender, and via the health of the banking system, a favor to ourselves.

Cramdown was never at heart about helping people who bought homes they could never afford.  It was about protecting the shadow banking system from the inevitable collapse that would ensue when the massive numbers of underwater homeowners (mainly consisting of people who bought homes they could never afford) enacted their right to walk away, to return the home (worth much less than the remaining principle) as full collateral.  the massive bank sheet losses this would create is the problem.

so here we are.  those losses are there, but they’re hidden off the bank sheets.  the thing is, if the economy recovers quickly enough, they will dissapear, and all will be well.  but if not, it’s a banking crisis that makes 2008 look like a sunny day.

@ Dean - assistance for homeowners was a specific provision of the overall bank bailout proposal, as pointed out clearly by SIGTARP auditor Barofsky.It was agreed to, in writing. Not worried about *that* contract, are you? I am.
Obama could have stated a more nuanced view of the situation when he campaigned but he opted not to be honest. It is easy to announce, as a newly elected president, that the program would help millions of people. The cameras were rolling in Arizona in February, 2009, as he made this pledge to wild applause. At that time he mentioned “7-9 million” homeowners - the 3-4 million possible mtg. mods was a walked-back figure the Fed throws out now to cover the failure. (You Tube the Feb. 9, 2009 speech in Az. if you want to verify this claim.)
The fact that behind the scenes, Obama’s Fed officials were taking marching orders from banks who *had agreed to help homeowners* is atrocious. The specific provisions in the bailout were unambiguous. Barofsky has been quite articulate on this point.
The Obama Fed, which has no problem cutting every deal in favor of banks, simply ignores this and seeks to disparge the homeowners it failed to assist. I for one have tired of being labeled a conniver for simply attemtping to use a program for which I am eligible.
BTW, the former “senior” Fed who winkingly states that the real world is “complicated” should return her pay to the government.
Why my tax money was spent employing a “senior” level economist (code for six-figure pay) who is not already aware of the “complicated world” we live in is beyond belief. I was a skeptic before watching the housing “assistance” program crash and burn while people who work for taxpayers stand idly by. Now I am a cynic.
Bailed-out bankers stealing up to 14 million homes in about five years (which is the current Goldman Sachs projection) unchecked is an American tragedy. Let’s not paper over the pain by quibbling about the difference between campiagn hyperbole and governing.

President Obama knows why there were no fake loan mods. Our homes are paid for free and clear as a part of the BIGGEST PONZI SCHEME THEFT OF OUR WEALTH IN HISTORY.  Thank you very much to the banks for selling me my home for a nominal fee at origination so as to SHARE THE WEALTH with all of homeowners. How AMERICAN of them. Loan mods would just have helped CONgress and the rest of the criminal enterprise COVER-UP for their crimes by EXTRACTING MORE WEALTH from the people who do not owe any money to anybody. CONgress implimented the PONZI SCHEME in the first place. AMERICA HAS BEEN HIJACKED BY A GIANT CRIMINAL ENTERPRISE AND WE ARE ALL BEING HELD HOSTAGE.

WOW - what a revelation!!  Did Obama & Co. REALLY think this would work on a voluntary basis?  Really?  AND if the servicers are the ones holding things up, causing the unecessary delays, lying to homeowners about assistance they really have no intention of providing, why not get rid of them and give us the break we were promised.

Secondly, “weeding out the bad apples” is a no-brainer.  According to Chase, because I have a stable job, stable & sufficient income to qualify for a HAMP/FHA-HAMP (but Chase ONLY offers the Chase CHAMP - dun dun dunnah!! insert caped crusader here) AND show NO RISK of defaulting on a modified payment no more than 31% of muy monthly gross income, I’m the “ideal candidate.”  SO??????  2 years later - the Chase CHAMP with a payment equal to 48% of my monthly gross income. 

Reason for harship:  reduced household income due to termination of engagement.  He all of a sudden chose to be a deadbeat and let me support us 100%.  I chose to kick him out. 

SO, where do we go from here?

Moral of Obama’s story:  don’t make promises you know full well you won’t be able to keep.  Duh.

I have one thing to say.  ProPublica could hire a staff of thousands and keep them busy for the foreseeable future.  The rampant corruption and fraud in our government and business knows no bounds. 

Our President, by choosing to do nothing, is complicit.

I agree - thanks agaiin, Paul & Propublica!!!!  Keep up the great reporting.  We appreciate it more than you know. :)

Richard F. Kessler

Feb. 4, 2011, 12:37 p.m.

According to the Special Inspector General for TARP, the Federal Government spent $4.3 trillion to rescue the financial system by bailing out the banks. Less than 1% of this sum went to rescue homeowners from foreclosure. The Obama Administration, without first obtaining public approval, sedulously and covertly, organized the greatest transfer of wealth from Main Street to Wall Street. Tax dollars were transferred to pay bankers’ debts; hjomeowners were abandoned to fend for themselves. This is a legacy of shame.

When all of America “wakes up” and realizes we are ALL living a lie, the sooner the charades will stop. No one is safe. The class warfare machine has not stopped and people who DID NOT lose their jobs during the INTENTIONAL ECONOMIC COLLAPSE IN 2008, are experiencing a FALSE SENSE OF SECURITY. They must realize that they are only one job loss away from all of us and are on there way to joining the new Weimar Republic of America. They might not realize that they work and work and never seem to get ahead. That is because of Government tyranny and opression. Everything is RIGGED in their favor. EVERYTHING IS A FRAUD. The criminal enterprise has FORCED and ECONOMIC DEPRESSION on all of us via the BIGGEST PONZI SCHEME THEFT OF OUR WEALTH IN HISTORY.  The top 1%, the richest people in the world, STOLE OUR WEALTH in the INTENTIONAL ECONOMIS COLLAPSE OF 2008. Go to you tube and search for CNBC Illuminati. WAKE UP AMERICA. Those living a lie can easily be controlled by that lie. Many do not realize this yet. There will be a tipping point as in Egypt. It took a $25. price for a loaf of bread, no jobs and a rigged election for them to finally get mad enough to try to get their country back from their opressors. WAKE UP AMERICA!! Our country has been hijacked and we are being held hostage by a gigantic criminal enterprise who are terrorizing the world with a Fake Economic Crisis.  We are NOT BROKE, WE WERE ROBBED.

No one should “vote” for any of the SOB’s next RIGGED election. They are robbing us of our wealth everyday via the rigged stock market and the Fed. They continue to prop up the rich and steal from the poor by creating a hyper-taxation fake debt burden on the people to COVER-UP for the theft of our wealth.  They are continuing the WEALTH EXTRACTION OF THE PEOPLE via FRAUDCLOSURES and deflated currency to pay for hyper-inflated goods and services and hyper-taxation. America must WAKE UP. We need a Nationwide Tax Revolt. We must assume no new debt burden and live within our means.  America must become entrepaneurs again and listen to the one decent piece of advice I have heard from the mainstream media CNN is telling people that SMART IS THE NEW RICH.  We must start thinking outside of the box. That is exactly what they DO NOT want the American people to do.  The people must be INDIVISIBLE against the tyranny and opression that is being forced on all. America must stop believing the lie that we are broke. We are NOT BROKE, WE WERE ROBBED. FIGHT THAT FRAUDCLOSURE. Our homes are paid for free and clear for a nominal fee by a bank at origination. Our mortgages that we have been paying were FRAUDULENTLY INDUCED. The FBI know this is true. It is called ORIGINATION FRAUD.

@ Linda - it is hard to read all-caps on the screen I use (small.)
Pls, consider not using the caps lock key so others can more easily read your posts.

Bank of America do not List to Obama. I apply for Loan Modification on July 2010 but I do not get any replay.I got ans wating for Apruval.

Susan Wolfe

Feb. 4, 2011, 3 p.m.

The notion ( as some have indicated) that it is the homeowners fault that they are in this position is ludicrous.  More people would be spending more money and therefore ” stimulating” the economy if the banks were forced to work harder to keep people in there homes.  Why is this not obvious?  The banks have thrived in this crisis while the folks who hold up the economy have been broken down.  Wake up America there is no such thing as Trickle Down!  Obama has chickened out on this and many other important issues.

Bruce Fernandes

Feb. 4, 2011, 3:06 p.m.

Force banks to cram down and no one with anything other than pristine credit will be able to buy a home with reasonable fees.  In order to accomodate cram downs fees and costs will have to escalate by a significant order of magnitude.

Expect to pay 3 points for money, lots of extra fees and insurance costs.  That is the price the vast middle class will pay for cram downs.

I really bore quite easily with these small minded people like Bruce who somehow believe the market is God and that forcing banks to do the right thing will penalize all of us.  He’s either corrupt or his brain is so small he can’t see beyond the end of his nose. 

We don’t need to pay an extra three points for anything.  Thomas Jefferson thought property was so important that he wanted to give every Virginian their own property.  That’s right.  Courtesy of the government.  You remember government - of the people, by the people, for the people. 

We don’t need a private banking system and we don’t need to pay 3 points for squat.  The government could nationalize the banking system or the mortgage system and do their own cram downs as they did in the Great Depression.  Those losses could be monetized with absolutely no impact on inflation or they could be held for up to twenty years or whatever it takes as happened in the Great Depression.  The government could give every American household a $200,000 (or whatever) voucher to be applied to an existing mortgage or to a new home.  And there could be rules put in place to keep it from being used to speculate or to flip properties.

There are countless solutions that are democratic.  But Bruce and others have no idea what democracy is.  They are slaves to the market and capitalism.  We live in a democracy not a capitalism.  And our government, with the necessary oversight and controls, could do a better job democratizing society’s capital than a bunch of for-profit crooks on Wall Street.

OBLABLA did nothing for the people of this Country and never will. But he made sure NASA will work on Muslim relations.
That is very important for our President.

When 50 million people and children will wake up one day without a place to call home because our President lied he will be out of office and the American people will blame the new president.

Our country is such a mess. Justice in America is no longer blind. Whoever is able to put more money on the scale Justice turns to that side.

Same thing goes with the representatives. As long as corporations paying for campaings the individual citizens will be ignored and the laws will be written to benefit corporations. Just like this HAMP program was written. The Banks got their money and if they feel they will help homeowners.

Well I guess they don’t feel like helping anyone but themself.

OBAMA should be Impeached for liying to the American People. All benefits that comes for an ex president should be revoked from him. He should Go and get a job somwhere in the private sector. Then the truth would come out how incompetent he is.

According to Merriam-Webster democracy is “a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections.” Hmm.  Supreme power, huh?  So, we vote for politicians based upon their beliefs, not the other way around.  It’s all about the posturing, power wrangling and corporate influence.  Like another poster said, what will it take for people in this country to get angry.  $10/gallon gas?  I keep waiting.  People bought homes they couldn’t afford because the banks TOLD them could.  Other people bought homes they COULD afford based upon their incomes at the time.  No one could have predicted the loss of earning power and available jobs for middle-class people and no one did.  When people like @dean stop sticking up for unscrupulous and self-serving government officials, businessmen and bankers, and realize how disenfranchised and alienated we are from our democracy, maybe we’ll begin to have a healthy middle class again.

Peter Buscemi

Feb. 4, 2011, 3:48 p.m.

Thank God i’m renting an apartment! I don’t want to deal with banks that hold so much power.

Bruce Fernandes

Feb. 4, 2011, 4:15 p.m.


Your solution of a socialist, collectivist, nation has been completely rejected by the vast majority of Americans who came out to send Obama a message regarding his socialist, collectivist vision for America.

You could do all of the things you say but when there are no incentives for those who choose individual achievement over settling for redistribution for the good of the collective then those of your ilk will find that no one is going to work beyond the bare minimum meaning there is nothing for the collective in the final analysis.

It is because I do believe in the market that the outcome of cram downs would be higher costs for all of us.

I suppose you believe health reform will really cut costs for all of us.  Get it straight.  Health reform is about the redistribution of health wealth from those that earn it to those that do not earn it.  There is no right to healthcare… there is no right to have your home preserved when you cannot make the payments.

Rights are received from God.  Only government chooses to try to give rights to one group by taking them from another group…. always attempting to keep the people divided.

The idea that individual accountability exists because these homeowners purchased homes beyond their means is like saying that the Pied Piper isn’t so bad after all—it is the fault of the children that followed him to drown in the sea. 

Corporations want and have now been given the power of our votes yet they do not have accountability for their actions.  Do we make policies to exclude those who abuse the system or do we make policies to help those who need help in the system and try to impose some type of balance to avoid abuse?  The first, exclusion, is a third world totalitarian tactic.  The last, helping the most people, used to be a democratic country based on the notion of equality.  It’s name was America.

Richard F. Kessler

Feb. 4, 2011, 4:37 p.m.

Bruce, Open your eyes. Our government (Bush and Obama) gave Wall Street $4.3 trillion dollars of our money, yours and mine. You are angry about the wrong thing. If the banks repaid what they wrongfully received, the budget crisis-so called-would be over. You want to get angry, how about this? “I want my money back, and I want my money now!” Lets treat the Wall Street payment as a loan and take the steps necessary to obtain its repayment.

What a bunch of drivel.  Your deluded ego has actually convinced your narcissism of its legitimacy.  I’m going to refer to Bruce by his true name - Ad hominem.  Ad hominem attacks are made by people who stand in quicksand and have nothing intelligent to say.  So I suppose Thomas Jefferson was a collectivist?  You fell right into it.  I’ve actually written that Jefferson would be considered a socialist by loonies today that never actually read the Constitution or understood what our founding fathers were attempting to create.  Mr. Ad hominem would probably tell Jefferson he needed to produce his birth certificate if he were alive today. 

Who said anything about health care reform?  You can’t defend a position intelligently so you bait and switch? 

Do you understand the difference between community and collectivism or do you just babble about things you don’t understand regardless of the topic?  Community is concerned about the general welfare of homeowners and citizens over banksters, of which you are likely one.  I guess you have never heard this before?

“We mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.”  or “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity”

Our country was founded on principles of community.  YOU rely on community for your income and your well being.  In other words, you work for someone and without community support for your employer, you wouldn’t have any customers.  You would be on the street.  How is that collectivism?  Your ego convinces you that you are self-reliant but you clearly have no idea that you rely on the social web of society for your well-being from employment to roads to the police to education to utilities to health care to food production and on and on.  You are a socialist. 

And how is our banking system based on free markets?  It’s an oligopoly that has monopoly access to capital from the Federal Reserve or society’s taxes.  They are cronies, crooks and self-serving thugs no different than OPEC oligopolies.  Give me equal access to the Federal Reserve’s capital and I’ll run circles around them. 

I’m here all night….....  Bring it on Mr. Ad hominem.  Next time address me with facts as opposed to calling me a collectivist because you don’t have anything intelligent to say.

@Dean Allman:
Wow, you sound exactly like a bankster!  I bet you are…What a perfectly robotic, cold, and entirely unsympathetic comment you wrote…and if you were in Egypt, I bet you’d be one of those guys on horseback whipping people and telling them to just shut up and go away, back to their tents…just accept your meager, sad existence…

Well, here is the truth—-mine anyway, which is similar to millions of people in this “good ‘ol USA”:

I am a mother of 2 small children, with a hardworking husband who has a sales business (that I help with from home) that was doing well enough for us to live in our modest 1300 square foot house for the last 10 years.  We have been working hard and raising our family, supposedly doing everything right…Then, through no fault of our own, the economy crashes and becomes a situation not seen since the Great Depression.  An economic collapse due to TOTAL CORRUPTION on Wall Street—-together with COMPLICIT corruption in the White House.

As a result (of Wall Street and White House corruption), our income is cut in half, and we can no longer afford our mortgage. We are told by the President ( whom I used to believe in):  “We are going to help you”—-we are told by the banks: “We want to help you, too—-just stop paying your mortgage, and then you will qualify for HAMP.” And guess what?  HAMP IS A LIE…
So…11 months later—-credit is shot—-no chance of modification—-threat of foreclosure sale—-“you don’t qualify”, BLA BLA BLA…


It’s NOT.

Elizabeth Warren—-are you listening?

GO BARRY GO!!!  Fabulous!!!

i have been trying for two years to get a loan mod . i got it the payment was higher .  i refused it and it starts all over this makes the 10 times i have sent in documents . imade all payments on time but it does not really matter they no what they are going to do from the beginning . see in the homeless shelter

If you people want to know how much 4.3 trillion dollar is. I can only show what is 1 trillion looks like here so please time this 4.3 times.

Then ask yourself. Could homeowners could of been helped?

Please note the gentlemen on the left side of the picture.

Wow !!!  Neat Stuff Neighbors ...  Would Love to Quote From Starry,  Ranting “Yet Sensible “Linda, Maureen, Rich Celest, Susan wolfe, Gabor “Notably”, Bruce… , Barry, Janice And Gabor !!!  Kudos ...  I Love Intelligent Neighbors !!!
Our Gov’t. Does Not. As Egypt, Shut the Communication Down So The Intelligent Caring People Can’t Talk And Organize !!! Ouch !!!
  Congradulations ! We are the People !!!
We Should Be Greatful We Can Communicate This way !! I am ! ( For Now)
I’ve Been in Foreclosure by Freddie For over a Year now and Finally Had A Wonderful Attorney Show me that I was sued By Freddie Before Freddie Ever had Legal Ownership and the Right To Sue !!! Yay !
She would Help me keep My House for 5000 $ Retainer and 10,000 $ more after !!! Not to worry, She was Fabulouse !!! She knew She Empowered Me to Get After it and I am !!! No Attitude toward her,She knew she’d Given me the info I needed and I Should use It !!! Angel in Disguise !!! Now if only the Judge Will Review what He Rubber Stamped Before and Swallow his Pride and do the right thing!
Then I will Pursue A Civil Suit Against Said Fraudclosure Atty. and see if Freddie Leaves Em out to Hang !!! Lol !!! They pissed Me off Enough to Step into their Arena, I Can Kick some Ass !!!
As for we the people, we need to Stick together !!!
We have truly Been Bamboozled !!! It’s not the first Time we have sat back and accepted Smoke and Mirrors !!!! And Pres. Kennedy was Only Shot From Behind !!!!!  Please Folks !!! We Have been Fooled to Much By Greed and Errogance in our Gov’t.
We Must Stick Together ! Sincerely Shawn Mc.

Wow !!!  Neat Stuff Neighbors ...  Would Love to Quote From Starry,  Ranting “Yet Sensible “Linda, Maureen, Rich Celest, Susan wolfe, Gabor “Notably”, Bruce… , Barry, Janice And Gabor !!!  Kudos ...  I Love Intelligent Neighbors !!!
Our Gov’t. Does Not. As Egypt, Shut the Communication Down So The Intelligent Caring People Can’t Talk And Organize !!! Ouch !!!
  Congradulations ! We are the People !!!
We Should Be Greatful We Can Communicate This way !! I am ! ( For Now)
I’ve Been in Foreclosure by Freddie For over a Year now and Finally Had A Wonderful Attorney Show me that I was sued By Freddie Before Freddie Ever had Legal Ownership and the Right To Sue !!! Yay !
She would Help me keep My House for 5000 $ Retainer and 10,000 $ more after !!! Not to worry, She was Fabulouse !!! She knew She Empowered Me to Get After it and I am !!! No Attitude toward her,She knew she’d Given me the info I needed and I Should use It !!! Angel in Disguise !!! Now if only the Judge Will Review what He Rubber Stamped Before and Swallow his Pride and do the right thing!
Then I will Pursue A Civil Suit Against Said Fraudclosure Atty. and see if Freddie Leaves Em out to Hang !!! Lol !!! They pissed Me off Enough to Step into their Arena, I Can Kick some A !!!
As for we the people, we need to Stick together !!!
We have truly Been Bamboozled !!! It’s not the first Time we have sat back and accepted Smoke and Mirrors !!!! And Pres. Kennedy was Only Shot From Behind !!!!!  Please Folks !!! We Have been Fooled to Much By Greed and Errogance in our Gov’t.
We Must Stick Together ! Sincerely Shawn Mc.

yesterday mark zandi testified before the HAMP oversight commitee.he pointed out a couple of things
- there are currently 4m mtgs in default
- there are 14m homes underwater( 4m>50%)
- 700,000 homes are in the banks REO
- the average loss of equity nationwide is 35%and still declining(much greater in some areas)
he pointed out the flaws in HAMP
1- establish a point of contact for the homeowner at initial call.assign file to an expierenced loan modification specialist to sheppard the file through the system( if you wanted to originate a loan for a purchase or re-fi do you think the loan officer would want to risk or share his commission with an army of customer service idiots?) a loan mod is nothing more or less than a loan product.let the professionals do their job.
2- eliminate “duel tracking”(the attempt to modify and foreclose at the same time)
3- require a 3rd party review for any denied mod to insure the denial was warrented.

i would go one step farther- eliminate the 3 month trial payment period.if anyone can give me a legimate reason for the TPP then why is there not a 3 month TPP for new loans?

anyone that is really serious about this , i challenge you to do the much $ are the banks pocketing for denying mods?figure it out

Here is the Senate Judiciary hearing from Feb. 2011
Starts at about 20 Minute mark.
On the 43rd minute a Bof A homeowner testified in his Hamp experience.

These articles bring out the folks too silly to see the truth or to ignorant to understand it. Bruce above was the best but followed closely Dean. Either these people live on another planet or are receipients of the ill gotten moneys extracted by the Banksters and are looking to defend or deflect their behavior.

Were Al Capone alive today, he’d be shamed by the money that has been ripped off by the Banksters and all done without a gun. By comparision Al would look like a guy robbing parking meters or candy bars from cradle dwellers.

How did anyone expect Obama to do anything with the likes of Larry Summers, Timmy Boy Geithner and Rahm Emanuel running the show. These are the same people but with different names that engineered the total take down of the United States over the past 30 years, little by little, piece by piece.

Glass-Steigel was the final piece of the puzzle. Look at how that deal was worked out. Impeach Clinton and essentially force him to sign-off or join the ranks of our 17th President on the unemployment line. 

Gold Standard-Political Action Commitees-Public Worker Unions-Glass Steigel-Citizens’ United.

Best, they have the likes of Dean and Bruce to defend their activites.

Someone has to take the rose colored glasses away for Dean and Bruce and the other Fox News Patriots.

Hey Al:
White Collar crime really pays much better than the “rough stuff”. Big returns. No investments in Nachine Guns. No prison time. All you have to do now is throw a few bucks at elected officials through their emassaries and it all goes away. Your way of buying up the judges in Chicago doesn’t work anymore, they’ve already been bought and paid for before you got there. This is the “New America”, Money talks, everyone else walks.


You are truly dilusional.  We had two years of your marxist theology and the people spoke in NOV.

You are one of those mentally challenged that live in a world where you think New York and San Francisco represent Moscow on opposite sides of the country.

Unfortunately for you.. you forget to look down at the country from an airplane as you go from NY to SF.  Everything in between represents an America that does not want a collectivist statist redistributionist America but an America that takes care of its less fortunate through a combination of private and public works and partnerships.

The trouble with libs like you and the hosts on PMSNBC is you never had the guts to see it through on your liberal agenda.

Liberals like you don’t have the guts to layout the TOTAL cost of what it would take to make America the just America you dream of…... because if you lay out the total cost then you must layout a tax system to collect all that you need for your just America.

Once you realize there are not enough hateful rich people to tax to death you get to the middle class and when you present how much of their wealth you would have to redistribute from the middle class to the poor and every liberal would be poop-canned out of office.

Liberals don’t have the guts to layout your true plans for a socialist redistributionist USA so spare me your babbling and coffee house crapola.  You are just another loser that wants a winner like me to pay your bills.  Your life is devoid of meaning and you are yet another hateful angry lib that thinks someone else should provide a welfare gravy train for those that decided to do nothing to better their lives beyond working 40 hours/1 minute every week.

Obama was probably given some reality by the bankers that if you force cram downs then we are going to prosecute for mortgage fraud and we will pursue individuals with civil litigation against them and seek judgement and provide documentation for criminal prosecution.

There is no doubt that hundreds of thousands of these loans were fraudulently obtained.  CNBC did a very good documentary piece where they met with borrowers that knew their loan documents were altered so they could get their loans.  If you sign documents knowing that they were altered…. that is mortgage fraud.

The banks acted like the greater fools but it was a democratic congress that would not let some of the big banks failed because they were too afraid that tax revenues would dry up in any wholesale economic collapse that would most surely have followed letting big banks fail.  The least they could have done was force every bank CEO and Board of Directors to resign and forfeit all deferred compensation and other benefits accruing to them…. that would have partially satisfied the broad base of people that feel banks were given too good of a deal at the expense of the public at large.

If instead of bailing out the banks, the government sent every adult taxpayer a $200K check, only to be used to pay down the mortgages or buy a home, and not allowed flippers, etc, FAR fewer people would have been foreclosed on, AND the banks would have been OK as a result. And it would have cost a fraction of the amount that was spent giving welfare to the already rich bankers.

I am positive both me and my husband, who both have our own businesses, would be working harder now, since the economy would not have tanked, and we would own our home-free and clear. I would be beyond happy!

All those small banks that were allowed to fail, would not be gone today. Instead they chose welfare for the rich.

This whole program was a joke from day one. I did all that was required and sure enough, I was denied without any real explanation. Submitted documents numerous times, jumped through all the hoops, and felt like I was just being toyed with. This program is a joke. I bet the banks collected their “fees” for doing nothing. Another boondoggle. Pull the plug on this turkey.

Hey Ad Hominem,
Guess what?  You can’t actually cite any facts or rebut anything I say.  You just blow smoke out your .......  More ad hominem from the world of the mindless.  You never addressed any issues with any facts.  It’s the same drivel - everyone is a commie.  Even Thomas Jefferson.

You might be surprised to know that I am a registered Republican.  But first I’m an American.  And because corrupt corporatist crooks now dominate the Republican party, (like you)  I’d vote for the anti-Christ before I ever voted for another Republican.  Or for that matter, another Democrat.

If you actually had decent grammar, I’d have more confidence I wouldn’t be wasting my time and I’d lay out for you using noncooperative mathematical gaming theory as to why your economic beliefs are literally buffoonish.  And your lack of understanding of litigation from those last posts is absolutely hiliarious.  The more you open your mouth, the more it looks like a vomitorium.  You’re too far gone to even waste time on.  There’s too much of you don’t know what you don’t know.

Maybe when you are on your death bed and your free market insurance company dumps your coverage and you have to suffer your remaining moments without dignity, your ego will finally break enough to realize you led a life of a lie.  Until that moment, all I can say is I am glad I live in a country of laws to protect me from idiots like you.

Lisa I like your plan

Did you look what is a trillion dollar looks like ? I posted earlier. With all the bail out money the Fed gave to Wall Street we could of bought a home for everybody in   North Central And South America.

The only problem is then these bankers could have not received their bonuses, and they wouldn’t have money to buy all the assets they have purchased.

I think now basicaly 9 banks own the whole world.

Thanks to Bush and Obama. The 2 worst presidents in my lifetime.

Clancy Hughes

Feb. 4, 2011, 9:25 p.m.

The only way to get the banks to act in a fiduciary way is to change the law that allows banks to foreclose on a home owner in bankruptcy. It use to be that going through bankruptcy allowed one to keep their home and their car. Somewhere along the way, banks changed that, and now all have it stated in fine print that bankruptcy does no longer interfere with foreclosure. I don’t believe in bankruptcy for myself, but the homeowner with cancer or a coronary bypass or just job loss may need bankruptcy to survive. Change the law back like it was and the banks will deal.

Citting to the chase would be the answer. As long as the F.D.I.C. is making up the losses on foreclosures, the banks will not modify. Simple. The solution is to stop making up the losses with F.D.I.C. End of story, over and out.

Cutting to the chase would be the answer. As long as the F.D.I.C. is making up the losses on foreclosures, the banks will not modify. Simple. The solution is to stop making up the losses with F.D.I.C. End of story, over and out.

If one more person says “people bought homes they could not afford” I will probably crook. Those that make this comment need to ask themselves a serious question. If the derivatives market did not blow up, would be here now. would unemployment be where it is? would we have so many foreclosed homes? Would we have so many bankrupt families? Would the credit card fiasco have happened? Would retirement plans lost value or become worthless? Would almost all of the states be near or in bankruptcy? Please think about this before making another “it’s the homeowners fault” comment. And for those that think it is the fault of the homeowner then I guess you probably think the homeowner could and should fix the problem.

Put it this way, most business is a gamble,high risk. So when you invest your money into say the mortgage lending business and it falls,why the he** should you get paid back for a bad deal? It that be the case maybe uncle Sam can give me some money I stuck in the poker machine and lost. Can I invest in the stock market and get my losses back.if the government would have not bailed them out they would have been put in a hard place and they would have had no choice but to help out homeowners or crumbled. The bailout should have gone direct to the people that could prove hardship. Tax money is what we all pay and I ain’t seen a dime of it and don’t tell me it was used on road maintenance cause America has some crappy roads.

And crappy schools. Make a bailout deal for some of these food chains so they can lower the cost off food. Coffee is ridiculous.

Bruce, since you brought up the subject, albeit off-topic, of healthcare reform I think you ought to understand that it is not exactly a “redistribution” of wealth inasmuch as you may think so.

I understand you think that those who earn their wealth should not have to pay for those who didn’t. But the fact is we are already paying in terms of higher insurance premiums, and exponentially rising costs of health, medical and hospital care.


While those of us who do have access to a doctor usually do not require emergency care because most health issues are generally caught and treated before reaching the critical stage. But for millions of others who don’t have access, their health problems eventually will require emergency treatment. And one way or the other, those costs have to be absorbed. Do you realize how much more expensive a trip to the E.R. is compared to a doctor’s visit? So for those simply concerned with the expense, by making healthcare accessible and affordable for more of our fellow Americans there would be less need for ER care. Thus, according to the dictates of reason, it would reduce the costs.


But this is not just a monetary issue.


To ensure healthcare is affordable for all Americans is a small sacrifice to make. It shows we, as a collective, as a society & as individuals, believe the greater good comes first & foremost.


Last but not least, I have to say, it is rather bizarre to think that contributing to the greater good is a redistribution of wealth notwithstanding.


Bruce no one is asking you to give up anything. Your lifestyle and security will not be affected. It is just a modest request to help others less fortunate than us.


When millions of uninsured people cannot afford a simple doctor’s visit we have to ask why that is?

Clinton had the same problem…an apparent desire to be one with the wheels of the white-collar world…so when it got down to the nitty-gritty of a decision process, he always went against those who got nitty or gritty.

I.e., against 90%+ of the American people….against “labor”.

All, apparently, so that he could hang with the boyz in the best suits…only the best.  Of course, the delayed payoff in “speaking fees” wasn’t half-shabby, either.


Feb. 5, 2011, 4:03 a.m.

@Garbor, good stuff !


Feb. 5, 2011, 5:08 a.m.

To Dean and to Bruce, I guess I’m always going to find people like you guys that are not well inform so first I’m going to recommend you some books, websites, programs, and documentaries for you to educate yourselves and get inform:
Books: The Great , American Stick up,13 Bankers, All The Devils Are Here, The Big Short, Websites: propublica which has documented on their articles the incredible fraud perpetrated by banks, also,,,
Movies: Inside Job
Then let me pleaase tell you Mr Dean and Mr Bruce, That you guys are using the consumer borrowers as scapegoated for the crash. and is the same logic as blaming the passengers of a discount airline for their deaths if it turned out to be that the plane had been flown by monkeys and the say Shouldn’t they have known they should pay more? The truth is the Banksters would do anything to entreat consumers to borrow far beyond their means, reasuring them that in a booming economy they’d be suckers not to buy buy buy, Think for a moment, the Lenders had no motive to vet the the recipients because they wouldn’t be trying to collect the debt themselves anyway, so knowing all of this the Banksters bought insurance against foreclosure (AIG. If they foreclose they collect insurance )
That is why now we are finding the Banksters doing FRAUDCLOSURES to collect that insurance I m sure you guys have heard of the Banksters doing the following in order to foreclose on a homeowner once again, you guys need to get educated and inform, many banks cannot even prove they hold the mortgage The Banks are well known of doing Forged notes, lost notes, intentional destruction of notes, unauthorized people signing mortgage assignments or endorsing notes, missing documentation, fraudulently fabricated documents, different plaintiffs foreclosing on the same property, plaintiffs who do not exist, illegally breaking in to homes and the inability or refusal to provide proof of purchase and/or ownership of the promissory notes.FORGERY, FILING FALSE DOCUMENTS INTO GOVERNMENT RECORDS, EXTORTION, ABUSE OF PROCESS, FRAUD ON THE COURTS, and countless others of CRIMINAL VIOLATIONS
Dean and Bruce, do you still blame the homeowners?

This article is part of an ongoing investigation:
Foreclosure Crisis

Foreclosure Crisis: Banks and Government Fail Homeowners

Banks and the government have fallen short in helping homeowners in danger of foreclosure.

The Story So Far

Systemic failures at the country’s banks and mortgage servicers have exacerbated the most severe foreclosure crisis since the Great Depression, and government efforts to limit the damage have fallen short. ProPublica created an unrivaled database of homeowners who have faced foreclosure, opened a Facebook page to encourage homeowners to share their stories, wrote profiles of some of them, and incorporated their experiences into our reporting. We also provided a comprehensive rundown of the numbers behind the crisis.

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