Journalism in the Public Interest

FDIC Chairwoman: Mortgage Industry ‘Didn’t Think Borrowers Were Worth Helping’


FDIC Chairman Shelia Bair testifies before the House Financial Services Committee's Financial Institution and Consumer Credit Subcommittee on Capitol Hill on May 26, 2011. (Chip Somodevilla/Getty Images)

Outgoing Federal Deposit Insurance Corporation Chairwoman Sheila C. Bair's revealing exit interview by the New York Times' Joe Nocera has generated plenty of buzz. But while the interview provided a comprehensive look at Bair's role from 2006 to 2011, what caught our attention was her characterization of the foreclosure crisis.

Bair said that the mortgage's industry's reluctance to provide mortgage modifications stems in part from the industry's "disdain for borrowers."

"I think some of it was that they didn't think borrowers were worth helping," she said.

While Bair said that President Barack Obama's "heart is in the right place," she criticized his economic team for taking controversial steps to aid banks while, in Nocera's words, being "utterly unwilling to take any political heat to help homeowners."

We have been tracking Obama's struggling home loan modification program since 2009. Bair's analysis of the government's approach is very much in line with what we've reported. From the beginning, the program was watered down and stripped of key enforcement measures, after President Obama backed away from his campaign promises to force banks to modify mortgages. Treasury's oversight of the program has been lax and characterized by deference to banks.

The government has only recently begun to penalize several major banks for their byzantine, error-prone modifications. As we've reported, homeowners have often been forced to deal with lost documents, poor communication and mistaken denials. As of May, approximately 730,000 homeowners had received permanent loan modifications—a fraction of the millions of homeowners that the Obama administration promised to help.

In criticizing the industry's approach, Bair became the first regulator to speak so frankly about the issue.

In her interview, Bair, a moderate Republican appointed by President George W. Bush, described a long-standing industry resistance to granting home loan modifications—a resistance that she first tried to overcome, unsuccessfully, just before the housing bubble burst in 2007.

After she took over the FDIC in 2006, Bair said, she realized that "predatory" loaning practices—like adjustable rate mortgages whose rates jumped steeply after an introductory period—had become mainstream. Bair held a series of meetings with mortgage industry executives. The goal was to forestall wide-scale foreclosures by convincing debt servicers to modify loan payments when homeowners went into default.

"After doing some arm-twisting," Nocera wrote, "Bair felt she had extracted a commitment" that servicers would try to restructure mortgages—in particular, that they would be willing to freeze adjustable-rate mortgages at the original payment level, rather than the higher "reset rate," as Nocera reported in 2007.

But later that year, after the housing market had crashed, Bair learned from a survey of mortgage servicers that those conversations had been ignored.

"It showed that like 1 percent of those reset mortgages were being restructured," Bair told Nocera. "They would just push people into foreclosure."

She told Nocera that she felt that she had been lied to, and that what mortgage servicers had promised in their meetings with the FDIC had simply been "happy talk."

As we've reported, part of the problem with the home loan modification process is that mortgage servicers have few incentives to help homeowners—or to save investors money. The servicers, the largest of which are the nation's biggest banks, don't own the vast majority of the loans they handle. That means that they don't bear the loss if the loan goes to foreclosure. In fact, servicers often make money from foreclosure fees.

Bair pointed out this same problem in an op-ed in the Washington Post last week that echoed her address to the National Press Club in June. She noted that the servicers' short-term incentives to foreclose on homes were wildly out of line with everyone's long-term benefit—including their own:

[Mortgage servicers'] under-investment in servicing has led to a huge inventory of foreclosed properties and mounting litigation that is likely to cost them far more than any savings they achieved by cutting corners.

In Bair's account, the Treasury's prioritization of the well-being of financial institutions over the well-being of homeowners has hobbled the government's foreclosure response since the beginning of the crisis. As we reported in February, Geithner's Treasury undermined a 2009 attempt to put more pressure on servicers to modify mortgages.

Bair told Nocera that when she went to the Treasury in 2007 to encourage them to put pressure on mortgage servicers, she received little response. The government, she said, "thought maybe I was overstating the problem and that it wasn't going to be that big a deal." Instead, Bair gained a reputation as "difficult."

In her recent Washington Post op-ed, Bair wrote:

Government efforts to promote modifications ... have gradually moved in the right direction but have remained behind the curve. At the height of the crisis in the fall of 2008, when fear over where the bottom was ruled the markets, policymakers were supremely focused on the short-term priority of preventing the failure of the nation's largest financial companies. Government assistance to financial institutions took a variety of forms, amounting to a total commitment of almost $14 trillion by the spring of 2009. While those actions were necessary to prevent an even bigger economic catastrophe, we still have not addressed the No. 1 cause of both the crisis and the subpar recovery we are in: a stubborn refusal to deal head-on with past-due and underwater mortgages.

Starting in September, Bair will be working for Pew Charitable Trusts (a ProPublica supporter)—a move that earned her plaudits from the Wall Street Journal's Deal Blog, which noted, "Here's a bit of shocking news: A Washington regulator is NOT going to work for the industry she used to rule over." She has also secured a book deal for her own account of the financial crisis, "Bull by the Horns: What Main Street Must Do To Fix Wall Street."

This is the lady who should be running for the White House. She has the people’s interest in mind. Can’t say that about any of our politicians today, money grubbing bastards

Sandra Rufolo

July 13, 2011, 9:56 a.m.

Having been through the foreclosure process, I soon found out that Obama’s HAMP modification program offered false hope. The mortgagor stalled the process by sending the same applications over and over, lost most of the information, had inexperienced people answering phones from God knows where who had no record of the application. Then there were the attorneys who called nonstop promising that for a fee they could get the modification to go through because they could talk to the mortgagor’s attorneys. It was BS, all of it. In the end, I went through my entire 401(k) to save the home. Of course, the mortgagor also made sure to slap on additional attorneys fees, etc ... There was absolutely no mercy. Yes, I would vote for this woman if she ran.

Barry Schmittou

July 13, 2011, 10:25 a.m.

The Obama administration does not think very sick and injured Americans are worth saving from deadly insurance company crimes !!

I have requested a treason and organized crime investigation of multiple insurance companies and consultant doctors they pay who are endangering lives in the U.S., and the DOL and DOJ’s failure to stop them from violating many laws and destroying the lives of many very sick and injured Americans.

The evidence includes quotes from numerous Judges that prove doctors paid by insurance companies ignore brain lesions, Multiple Sclerosis, cardiac conditions and much more.

To see the evidence and my request for an investigation please go to :

I pray every citizen will consider submitting this evidence to your elected officials and local and Federal Grand Juries if you are ever selected.

Notice in the article that Bair was labelled as a “troublemaker” for a) speaking truth in the face of a crisis, and b) for sticking up for the general public.  What does that tell you about the current US govt?  Really all you need to know.  Get rid of all of them.  Bring in a fire hose and flush DC out for the filthy, service station toilet that it is.  Dems, republicans, doesn’t matter.  Flush ‘em out.

I knew the truth would finally come out. I think many people lost their homes erroneously because of the banks attitude of refusing to step up to the plate and do their part. In my own experience,  Bank of America was impossible to deal with. With friends and family it went from the extreme case of (practically) wanting a pint of blood to unbelievably easy!

I knew the truth would finally come out. I think many people lost their homes erroneously because of the banks attitude of refusing to step up to the plate and do their part. In my own experience,  My bank was impossible to deal with. With friends and family it went from the extreme case of (practically) wanting a pint of blood to unbelievably easy!


July 13, 2011, 2:38 p.m.

“Mortgage Industry ‘Didn’t Think Borrowers Were Worth Helping’ and they still think the same way,  Sheila C. Bair’s is 100% correct.
The money isn’t even there anymore, because it was stolen by Wall Street banks and diverted off-shore by any business large enough to employ the tax and financial superstars who understand the laws passed by the legislatures of the states and the federal government — at the behest of big business and big government.
The financial services sector Banksters, has found out it is better for THEM to keep the money away from real business and to trade “interests” that are not even pieces of paper back and forth between each other.
Financial services reached its peak at 16% of GDP a few decades ago. Now it is over 50% and climbing.
How many times do we need to be hit over the head before we look up and see who’s hitting us? Where is the outrage? Where is our country?
Our “free society” has been taken hostage not by conservatives or liberals but by big business and big Bnksters.

WilllHarper I could not agree with you more.

When I first heard she was resigning I prayed that she was not part of the revolving door that exist between Gov’t and Industry.

My respect for her has gone up 10 fold.

Her book will surely be a best seller.

Loretta Paraguassu

July 13, 2011, 4:17 p.m.

These things can’t be said loud enough or often enough. I have a loan modification—but only after a few years of grief and acceptance of an underwater mortgage that includes charges and penalties I’ve never been able to explain. Would anyone be surprised if I said it started with Bear Stearns and has gone to Chase?


July 13, 2011, 6:17 p.m.

“Bair’s analysis of the government’s approach is very much in line with what we’ve reported. From the beginning, the program was watered down and stripped of key enforcement measures [5], after President Obama backed away from his campaign promises to force banks to modify mortgages [5].”

The best solution to this is for Obama to support cram down of secured debt in bankruptcy cases.  Take the power away from the bankers, Treasury & administrative branch and give it to judges around the nation.  No tax dollars needed for worthless loan mod programs.

She and Brooksly Born should run for Pres & VP.

The only government official who actually knows how to disassemble a bank (Commonwealth Federal), and make sure the depositors receive the protection the FDIC is supposed to provide.
The only government official who actually wants to equitably share the pain of the mortgage crisis.
Now, think what life would be like if SHE were Secretary of Treasury.
...and why she isn’t.

G. Jack Thurston

July 14, 2011, 3:30 a.m.

I have been setting in unbelievable awe for several years wondering where are the “Shelia Bair’s” and “Brooksly Born’s in this country of 300 million plus, whom we need to step up against all the ODDS (Corruption), and tell the lieing Elected members of both the House and the Senate and those that are appointed by them and the (so-called President) how really bad things are and have been for years in the way the favors and Billions of Dollars have been traded for votes at re-election time.  I couldn’t agree more with the related statements made above this posting.  For those who haven’t seen it get on your computer’s browser and type in the following:    This is the Documentary “THE WARNING” produced by WGBH, Boston, Ma. actually showing how our government treated Mrs. Brooksly Born, whom was the HEAD of the CFTC (Commodity Futures Trading Commission), in open session of government when she tried to tell them what was comming because of the lack of any regulation whatsoever” re: DERIVITIVES.  In essence it amounts to the Seller (usually the Bank) selling a Bond to an invester and then Betting that the Invester will Default and the Seller makes out like a Bandit by collecting on the insurance Mrs.Born was trying to get just a little regulation re: this process and basically 4 men in high-up government APPEARS to conspire to stop her at any cost.  How’s that for your government’s treatment of it citizens?  Shelia Bair ran into basically the same treatment when she tried to get the government to take action (regulation) in the housing mortgage market and it all fell on deft ears.  Just my opinion, but I believe you will readily come to the same conclusion when you watch   “THE WARNING” on WGBH, PBS station in Boston.  Too bad we can’t impeach everyone of these elected and appointed officials, that are self serving, all at once and clean out the rats nest.  There are a few good, well intentioned, hard working for the citizens, government employees in government, but they are way overwhelmed by those whom put themselves 1st.  What do you Think?  Last, but not least, Propublica please keep up these great exposes.  You have no idea what you are accomplishing. This isn’t “Chicken Little (the roof is falling) it’s much, much more serious. Watch “THE WARNING”,  please! Then contact Eric Holder (our Attorney General) and ask him why he isn’t investigating this Brookly Born (conspiracy affair. Thanks!

Grape E. Good

July 14, 2011, 9:24 a.m.

Thank you Sheila for your efforts.  I run a non-profit dealing with this meltdown.  We help homeowners every day get traction on the big banks.  Unfortunately this article did not cover the credit default swaps and the part they play to keep the Wall Street Casino going and the politicians in their hands.  The article talks about 13 trillion to bail out the mess.  That amount would have paid off every home in America, instead it went off shore to private savings accounts,  they still take our homes and estimates that there are up to 80 trillion credit default swaps still in the wings to cash in. This is why we have no money on Main street, thus creating a spiral to the bottom American’s have no idea of how deep and bad it will be unless these swaps are stopped.  The average foreclosure could have up to 30 times the face amount of bets that our treasury pays off at foreclosure time.  Do the math, these foreclosures are an unbelievable casino for a hand full of players.  Now Europe is also crashing.  Who has the spine to say nomore!!!!

Excuse me -  Bair set up her thoughts about modifications based on the fact that she knew or had to have known, that most of the loans were securitized which in effect, dictated just how many could be modified.  If an investor is to receive a certain yield or the portfolio’s value is priced based on certain critieria at the time the loan was securitized, that would change and only 5% generally was allowed.  Why in God’s name would Bush and Obama start to promote modifictions when they knew that these loans could not be modified unless the taxpayers paid the difference to keep the portfolio value up.

While the servicers did their job to make sure they could delay as many modifications as they could and even got in on big incentives for modifying when they did - was a planned agenda by the feds as a whole.  There can be no question about it.  It was a ploy to buy time, get as much out of the borrower as they could and then take his property.  Modifications were never on the table and you can’t modify the loan legally when none of the companies had standing to do so in the first place.  See what fools they made of the American people and just how long they got away with it.  I have to tell you, both administrations and the Congress have been a disaster for the housing demise and the damage to this economy.  Borrowers should not look back and walk away, these people need to be held accountable and Sheila Bair had to have known what was going on as well as Elizabeth Warren and her group even though it was even operating at the time.

America laid back and let them screw the whole system and simply are saying well, we trusted our feds to protect us - right?

And now with the settlements that do not begin to work for the benefit of the people, this is only a fourth victimization of that borrower.

Just wait until all of the homeowners are hit with deficiencies by the lenders and the debt collectors they sold the deficiencies to -  Going for the fifth victimization of the homeowner -  you bet - and the Congress, chicken as they re have desertedf the American people.  All words, no actions and we have no us attorney general.

Sheila Bair could have been the woman of the year - but she did not.  She did not fully do her job as far as I can tell.  I personally told them to isolate the 5 states with the worst foreclosure record and do not factor those sales and losses into the overall foreclosure plan of action.  These states had special problems and issues, separate and apart from most other states and all they did is bring down the whole housing industry by trying to blend them altogether. 

We had a plan that would have saved millions of homes from foreclosure, containment of the loss of property values, most profit sharing and retirement investments would have been protected -  that was the way to buy time to resolve the issues.  But they really needed people like us who had been in the trenches for 48 years to explain to them how to prevent further damage and save our economy -  All of those economist do nothing but take paychecks and did not have a clue.  In 1995, the second chance auto dealers became second chance home dealers - (wall street) and they made out like the bandits they really were. 

Neglect of oversight was intentional.  I just cannot get over it.  Closing banks early on and not doing anything to stop the bleeding back in 2007 and 08 - where was she -  I would have walked off of the job if I was not able to put in plans that were effective instead of going along with just making comments, but nothing being done.  This was one of those times - when the good people in the regulatory, the congress and other agencies - should have walked on the administration - and they did not.  I have left more than one job because of the intentional harm being bestowed on the American people -  why didn’t they do the same.

Good for you Joyce.  Would love to know more about what you do and know.  Join our online community at

Joyce, while you are correct in your general assessment, I think you may be too hard on Bair and the few others that were trying to get through to Treasury and Congress while they still had the standing to do so.  Quitting is always an option, but then ALL the doors close.  Chastizing those who had the nerve to speak up at some point and speak to reality, seems to me to be counterproductive.  Our anger should be directed at those who knew better but did nothing, or rather facilitated the sham.  Which would be about 90% of the players in DC.

James B Storer

July 14, 2011, 10:53 a.m.

It is impossible to adequately express appreciation for M Bair’s FDIC service (including an outspoken and successful stance against the senseless “too big to fail” policy).
She comes with an incredible lifetime resume.  I must agree with comments by others that here was a brilliant light and ray of hope in the murky, corrupt beast that is our federal government.  Is she presidential material?  -Absolutely, without question, with a caveat or two here and there:
  I will not vote for a Republican candidate no matter who it is.  I am very dis-enchanted with both parties, as they are merely doormen for corporatism.  I am with efforts to unify the present third parties into one large party, as this is the only possible road to success for third party movements.  In this scenario, M Bair would be the perfect presidential candidate.  It is time for the seemingly indefatigable and much respected Ralph Nadir to cease running for president, and serve as an elder statesman for a unified third party.
  I applaud M Bair’s selfless decision to forego corporatism upon leaving the FDIC and go to the non-profit foundation.
  Skartishu, Granby MO

Thanks Will and grape e good -  I have been there and done that and the only thing that saves my consciousness today is the fact that I did exactly what I thought was the right thing to do and did not wait to get the approval from those that had wrongful intentions - and then after that, I went to work saving as many as I could from being foreclosed on which I say, I was somewhat successful.

I have been able to do more on the outside than I ever could while on the inside.  Most of the task prevention committees that were supposedly attempting to help the governors and even the FDIC did not even have a clue as to what I was talking about in 2007 - 

I wrote my book on “not in my backyard Mr. Lender in 2006”.  My biggest disappointmnt was writing the book and then not publishing it since I was one of those down in the trenches and I saw the good simple basic procedures we had in place be set aside so the wrongdoers, the banks and the regulatory could do their thing and that they did - they brought this economy to its feet.

I will never worry about burning bridges with people who do not have the best interest of the American people .  And trust me, Bair is a good woman I am sure - but let’s face it, her work was not accomplished when she sat in on the meetings and could have let them have it -  she is a smart lady - what’s not to know.  That is why America is suffering today - those that can - didn’t and those that could went about it the wrong way.

The real anger should be directed at the banks who created this overwhelming nightmare.  The banks refuse to comply with the laws of the land.  They refuse to cooperate with the courts.  They stonewall, obfuscate, lie, and steal our homes.


Which is more important?  Words or Actions?  Well, for the past three years we have had nothing but words, ploys and government intervention about something they knew nothing about.  Or did they? 

The rule of law has stepped up to the plate to be challenged and as such to be known by all that our judicial processes that protected the consumer were disappearing -  All flying in the face of the American people who simply have not accepted this fact yet.  That 5% of the homeowners who have been through so much were the catalyst that said - wake up America -  you are far too silent - now see what you have done by not minding the store.  We now must follow the rule of the Banks -  the rule of law is nowhere to be found.

Thanx Joyce.  We are kicking tail in Oregon with these banks and are looking for whistle blowers that will help us with a few issues.  We dig into the SEC files and find a lot of dirt but are still hitting a few walls.  We’d love to talk to you.  Join our online community at

Loretta Paraguassu

July 14, 2011, 11:08 a.m.

I, personally, am pained by the numbers of foreclosures that are being allow to continue to go forward. Isn’t anyone home in the government who cares? The well-to-do are scooping up real estate the way some people buy shoes. It’s worse than disgusting.

I think I could be one of those millions they did not think was Worth It! I started my loan mod in Sept 2010 only 3 months behind. Provided all the paperwork as many others had. I was a victim of Bank of America’s games I provided everything to the Hamp Counselor told I qualified after numerous bogus number from Bank of America being hung up on, asking for paperwork I know I sent. I was finally got an unsigned form letter in Dec 2010 stating I was denied due to incomplete financial documentation. I went for a mediation in Chicago in Jan 2011 met with a counselor there again she submitted the papers again I received a call from a rep at Bank of America I explained I was strung along for so long by them I didn’t know if I was coming or going, leaving or staying. He assured me that they were aware of the mishaps and mistake made by BOA but he was there for me!! 2 to 3 weeks later I received a letter stating I did not qualify for a mod I was only entitled to short sale and deed in lieu which mean give away my house because the amount I owed was too much I later received a notice stating the amount I owed was 160k when this first started Bank of America’s law firm stated I owed 142k which mean Bank of America added an additional 20k in late fees etc… I am lost I feel like any day myself and my daughter are going to tossed out on our heads.Afraid they are going to knock the door down daily. I know nothing about this process what I do know is wrong doings. Now I am torn between This and Bankruptcy! I told my daughter if I should die from a stroke or heart attack etc…she should go after BOA!! Because they most certainly caused it!

Adrianne,  There are a lot of support groups around.  There are millions of us going through this.  We have been in our home 30 months now and there is no resolution in site.  The good news is that we are still here and expect that we can buy at least 2 more years by challenging them.  Hang in there.  Grape E.

We know the banks don’t care.  We know the politican’s don’t care because they are essentially sponsored by the banks, or those who have interest in keeping the corrupt status quo.  The only real solution for the long term would be something along the lines of a grassroots, third party coalition like James is talking about.  Put aside social issues like abortion and gay marriage, and rally grassroots America around the fact that the vast majority of us are no longer represented in govt.  While we argue over opinions and cultural issues, our country is being stolen out from under us.  Short term; for those caught in the foreclosure mess, do what you have to.  Fight if you have the strength.  File bankruptcy if you have to.  Walk away if you have to.  Don’t beat yourself up over losing a game that was rigged against you.


July 14, 2011, 11:54 a.m.

When I worked for the FDIC in 86-88 in the last go round closing failed banks in Iowa there was a much stronger political climate to: 1) hold banksters accountable; 2) and sympathy and policy response for those hurt (farmers, chapter 12 was enacted in fall 86).  In 95, when BAPCPA was enacted there was no sympathy for consumers - in fact, the opposite.

After that start, I’ve been a bankruptcy & debtor / creditor specialist my entire career.

There is surely a shortage of folks with integrity to speak the truth and the policy we have reflects it.  The HAMP and mortgage mod programs have been a massive fraud on the public that didnothing more than create political cover for Congress and the Administration to step up to the podium and say:  “We created a program to solve this, we are doing something.”  Never mind that the something was a crock, a sham and doomed to failure to begin with.  Anything that is voluntary or leaves the banksters in control goes nowhere.

The policy solution has to include taking control & the power to coerce outcomes away from the banks and put in some other hands.  The bankruptcy courts did a fine job with Chapter 12 cramdowns on farm ground in the 80-90’s, they can do it again, on a case by case basis with distressed assets today.

By creating a program that allowed the banksters to stay in control, then Congress and the administraiton has ceded control for the mortgage mod programs to an industry still full of crooks.  This is the same industry that the FCIC recently concluded:

“• We conclude there was a systemic breakdown in accountability and ethics. The integrity of our financial markets and the public’s trust in those markets are essential to the economic well-being of our nation. The soundness and the sustained prosperity of the financial system and our economy rely on the notions of fair dealing, responsibility,
and transparency. In our economy, we expect businesses and individuals to pursue profits, at the same time that they produce products and services of quality and conduct themselves well.
Unfortunately—as has been the case in past speculative booms and busts—we witnessed an erosion of standards of responsibility and ethics that exacerbated the financial
crisis. This was not universal, but these breaches stretched from the ground
level to the corporate suites. They resulted not only in significant financial consequences
but also in damage to the trust of investors, businesses, and the public in the
financial system.
For example, our examination found, according to one measure, that the percentage
of borrowers who defaulted on their mortgages within just a matter of months
after taking a loan nearly doubled from the summer of  to late . This data
indicates they likely took out mortgages that they never had the capacity or intention
to pay. You will read about mortgage brokers who were paid “yield spread premiums”
by lenders to put borrowers into higher-cost loans so they would get bigger fees, often
never disclosed to borrowers. The report catalogues the rising incidence of mortgage
fraud, which flourished in an environment of collapsing lending standards and
lax regulation. The number of suspicious activity reports—reports of possible financial
crimes filed by depository banks and their affiliates—related to mortgage fraud
grew -fold between  and  and then more than doubled again between
 and . One study places the losses resulting from fraud on mortgage loans
made between  and  at  billion.
Lenders made loans that they knew borrowers could not afford and that could
cause massive losses to investors in mortgage securities. As early as September ,
Countrywide executives recognized that many of the loans they were originating
could result in “catastrophic consequences.” Less than a year later, they noted that
certain high-risk loans they were making could result not only in foreclosures but
also in “financial and reputational catastrophe” for the firm. But they did not stop.
And the report documents that major financial institutions ineffectively sampled
loans they were purchasing to package and sell to investors. They knew a significant
percentage of the sampled loans did not meet their own underwriting standards or those of the originators. Nonetheless, they sold those securities to investors. The Commission’s review of many prospectuses provided to investors found that this critical information was not disclosed.”

to James Storer:

I too come to the table with quite a resume as well, but that means nothing if it is not used in the most effective way possible.  I do like your stance though, it is quite meaningul.  I also think Sheil Bair could of done more.  But mine comes from being on the front line defending people who are not able to defend themselves.

Jim :  Great post and all of the rest of you seem to be on top of what is and has been happening for years.  The question now becomes - why can’t we stop it - because we certainly have not been able to so far.  All those groups need to coordinate into one and like I have been said for years -  the only voice missing in the whole mess if - “the people’s voice”  I can’t hear you.

Joyce,  I agree.  When Michael Moore did his research for Capitalism a Love story, one of those wall street wizzards he intervied said the following after Michael asked him “Aren’t you afraid of the people”.  The wizzards response was.  “We don’t worry about the Sheeple.  We would only get concerned if they ever organized”.  Some of us are getting organized.  Unfortunately there is still a lot of terf wars going on over organizing the people.  Our group does not allow political discussion as to who is right or wrong.  We are coming together as neighbors not Pubs, Dems or Teas.  We are constantly on the phone buidling coalition alliances where ever we can to have our “Voice Heard”.  Grape E.

Grape E. -  Best news I have heard in a while.  You must unite as one.  By the way, Sheila is to be commended for going to work for the non profit.  It is very rewarding. 

In the past five years, we have helped hundreds of families stay in their homes because our people understood good loan servicing technique and the bankers didn’t have a prayer.  The first thing I tell them is that although we are non profit, we do not accept money from the the government, realtors, attorneys, mortgage companies and in fact, accept no donations from anyone and the people are not required to pay for our services.  We utilize our on personal funds and have until January 2011. 

I know that I have a lot of counterparts out there as well who do not accept pay for working in a non profit organization as we do.  Not that it is not deserved, but there is a big difference in that we are actually busting our rears strictly for the people because it is not just a job we can remain objective when we go after the mortgage companies.  WE don’t want their money and we have never asked to be certified by HUD - a do nothing organization which helped bring us to where this economy is today.

Don’t think I am a hard person because I am not -  but I sure am not going to pacify the very people who ruined this country through their misdeeds and deceptiveness -  After 48 years I never dreamed the very industry that we were once so proud of had been devastated and by our own government in their neglect of the people and their rights.  And it is not going away.  Sheila Bair in my opinion could have done more, but then I guess we all could have.  Keep in mind that there were those that defnitely had an agenda for this country and the housing crisis was only 1/4 of that agenda -  Let’s not wait for the other 3/4 - which I believe is already well on its way to be accomplished.

I would indeed like to offer what I can in such a way that it is meaningful and productive.  I will join your forum and thanks for the invite.  Years ago while working a task force for the preention of foreclosures for the Governors office, I happen to mention that the biggest danger beginning in 2007 with the Bush recovery act would be that the servicers not only would be able to handle the assignment, but they had no intentions of doing it, thus most homeowners were meeting the servicer at the gates of hell during these last 4 years.  The gentleman on the committee at that time ask me “what’s a servicer”.  I stayed on that committee for about 2 months and knew I could do more good working for the people.

One last comment here is about the President’s claim that he might not be able to fund the social security an disability checks to the people scheduled to receive them.  I thought about that and then remembered last summer when so many people on the blogs were talking about withholding their own deposits received from their employers from their bank accounts to see what, if any effect that would have on the banks -  They never did it of course, but then many spoke the words.

If the President withholds the social security checks, etc., just how many of those go directly into the banks for deposit straight from the feds.  I believe 27 B is paid out to the people (seniors and disabled), a how would that affect the banks financials.  Of course they would get it fairly quickly because the people will have to be paid under the law, but just a thought.  The banks may not even care - who knows.  any comments.

“Naturally the common people don’t want war [political division and wealth disparity]. But after all, it is the
leaders of a country who determine the policy, and it’s always a
simple matter to drag people along whether it is a democracy or a
fascist dictatorship, or a parliament, or a communist dictatorship.
Voice or no voice, the people can always be brought to the bidding of
the leaders.  This is easy.  All you have to do is tell them they are
being attacked and denounce the pacifists [progressives,liberals or any group that refuses to go along with the lie] for lack of patriotism and for exposing the country to danger.  It works the same in every
  —- Hermann Goering, Hitler’s Reich Marshall, in prison after World War II.

I know most of us are familiar with this quote to some degree, but do you see how relevant it has become in our current economic and socio/political environment?  We are being distracted and divided so that we don’t rise together in opposition to the corrupted status quo.  If enough people can be misled to blame socialism or Obama, or conservatism and Boehner, then few will see the truth that it is corporatism and a plutocracy that has brought us to this point of economic hardship and joblessness.

will harper -  EXCELLENT

This is really my last comment -  Sheila Bair was incorrect in her statement ” mortgage industry did not think borrower’s were worth helping”.  It was, as we all know, the industry that set up the borrowers, along with Wall STreet (they could not have done it by themselves) that took these homeowners and this economy to its demise.

It was actually due to the greed that was expended for the huge profits they would make - all at first on the backs of 5% of homeowners who first defaulted on their loans. The Congress along with others did a great job of convincing regular homeowners who made all the right choices and who were not used as guinea pigs to believe that it was the borrower who committed all of the wrong doing.  Now the whole nation of homeowners know that was definitely not true, but the pathetic part is we lost all that time doing nothing.  Then as the remianing homeowners fell victim to the trickle down effect of a failing economy, the rest of the nation got the picture.  It was the banks people, not the borrowers.    Let’s be clear - the mortgage industry needed these poor souls to make good on their agenda and when they got through with them they tossed them aside - they had served their purpose and anyone who thinks differently, I beg to differ with.  And they are still getting away with it.  We had more foreclosures in 2010 than the years before - something wrong with this picture because now the feds, Wall Street and the banksters all know which part they played has come to light and nothing is changing.

This is really my last comment -  Sheila Bair was incorrect in her statement ” mortgage industry did not think borrower’s were worth helping”.  It was, as we all know, the industry that set up the borrowers, along with Wall STreet (they could not have done it by themselves) that took these homeowners and this economy to its demise.

It was actually due to the greed that was expended for the huge profits they would make - all at first on the backs of 5% of homeowners who first defaulted on their loans. The Congress along with others did a great job of convincing regular homeowners who made all the right choices and who were not used as guinea pigs to believe that it was that 5% of the borrowers who committed all of the wrong doing.  Now the whole nation of homeowners know that was definitely not true, but the pathetic part is we lost all that time doing nothing.  Then as the remaining homeowners fell victim to the trickle down effect of a failing economy, the rest of the nation got the picture.  It was the banks people, not the borrowers. 

  Let’s be clear - the mortgage industry needed these poor souls to make good on their agenda and when they got through with them they tossed them aside - they had served their purpose and anyone who thinks differently, I beg to differ with.  As the foreclosures proceeded, at one point I thought to myself, they aren’t just trying to foreclose and the property back, they are trying to get rid of all of the subprime borrowers they made loans to.  AFter all, after the loans started going south, the investors knew sub prime was not going to be a viable produce and those portfolios would be tough to sell.  And they are still getting away with it.  We had more foreclosures in 2010 than the years before - something wrong with this picture because now the feds, Wall Street and the banksters all know which part they played has come to light and nothing is changing.

Rob Harrington

July 14, 2011, 2:07 p.m.

Load of crapola… Sheila is no babe-in-the-woods on this matter.

The FDIC is just as much part of the homeowners’ problems. Just ask any WAMU homeowner fighting JPMChase.

Thanks Joyce!

Here is another source you may be interested in:

James B Storer

July 14, 2011, 2:18 p.m.

Great comments, all.  We tend to drift off topic in these comments, but this is because whatever the subject, all are part of the same dilemma, namely the take-over of our country.  From mid-2008 until this past April I was incapacitated due to harsh chemo treatment.  In now trying to bridge my past with today, it seems that the problem of encroaching corporatism, which has been in the works for decades, has now reached the ear of the nation and is also reached the point of, possibly, no return.  It has also caused economic distress on nearly all.  Further, the ethical and moral standard of this corporatist elite is beneath contempt, consisting entirely of greed.
  Both parties are hamstrung, and our efforts must be toward a coalition of all present third parties.  This will be a most difficult endeavor.  The effort must incorporate a principle I owe to a President Truman quote, that “it is amazing what can be accomplished if no one cares who gets the credit.”  This is awfully hard to adhere to in a political organization
  “grape e good,” your sentence “Our group does not allow political discussion as to who is right and wrong” is essential to the effort (if I understand your meaning correctly).  This is a most difficult tenet to adhere, but it must be enforced.
  We are getting close to the time when organization and campaigning must begin in full swing for the 2012 election.  And, such an organization must plan through to the 2016 election, which is really critical for a viable unified third party.  We must each find a niche to work in.  A first goal is for you guys to agree on and publicize a central place to begin coordination.
I will be of limited help, as I am 78 and will probably be out of the picture before the next election rolls around.  As it is, I am not very mobile due to the debilitating chemo.  Each to his, her own ability.
Skartishu, Granby MO
PS: It is essential that women have a fully active part in such a venture.  The United States has done good in the world, but this has been balanced by much bad.  I believe that the greatest contribution the U.S. has contributed for long time respect by other nations is the great effort they put forth in gaining equal rights.  They were not given these by men.  They fought like hell for them.

Hi Rob,  Long time no hear from.  How is the WAMU group doing?  In Oregon we now have 5 major wins.  If we challenge the banks they are just cancelling and paying attorney fees.  Just got the first threaten today that they will come back Judicial.  Guess they will have to get to work manufacturing more docs to do that and it will take about 2 years.  Miss Grape E.

Joyce Cauthen

July 14, 2011, 4:10 p.m.

James Storer:

I have enjoyed reading your very thoughtful and exacting posts.  They do indeed reach to the heart of things.  I must tell you however, that I was not attempting to chastize anyone but to try to get those that do have such formidable talent and resources to better use it as such and continue to.  Do not lose the ray of light.

Everyday I say I am not going to take another phone call.  But then I think back about the Katrina victim who called us late one night about 11:30 - a kidney dialisys person who was on the transplant list and Washington Mutual had been harrassing her for years trying to over collect on an escrow account.  She had contacted four different non profits , all to no avail and she has had no rest from their harrassing treatment for months. She said the NACCP had told her to call us that we might be able to help and she said, I know its late, but I simply cannot go on.  If you can’t do anything, just tell me now.  Do not lead me on.  Strange thing she said wasn’t it.  Sounds like even the non profits had been wasting her time as well.  After listening to her story, I told her, you won’t ever hear from these people again. You go to bed and I will deal with them from now on.  She had paid down her loan to $2500 but they said she owed $19,500 in escrow deficit.  Well, like I told her, the next day I would start giving back to them what they had been dishing out to her over the past couple of years -  It took me a while and it was tough, but we got her release of lien.  Sad to say however, that I told her on Wednesday evening about the good news and by that Friday, she had been murdered in her home by a family member.  She was a professional hard working person and when they moved to Houston after Katrina, never asked for any help moneywise like so many others. She was an outstanding person and would have been back in her home had we been able to get the matter settled sooner.  But it was not to be.  So many stories - to tell, and those that are supposed to protect us, our homes and our rights - sit back and do nothing but try to arrange for minimal fees to be paid and settlements that will never make up for the horrendous treatment so many have endured.  Like I said, meeting the servicers at the GAtes of Hell after their loan was originated would be the second victimization of the homeowner,  the foreclosure mills the third, the feds the fourth and then of course the debt collectors and their deficiency collection process.  And to all those homeonwers that were able to hire attorneys (they thought were working for them), they simply took their money and most did not perform during the first few years - it is a little better now and at least the Judges are beginning to a very small degree to accept the fact that the attorneys are the real bandits here.  They actually wrote the paperwork on the PSA’s that brought this country down.

Mr. Storer:

Second thoughts - I read again your post.  Do you realize that if we had more people like you to come out and say what you just said, how effective that would be.  I thought back several years ago that I was not going to be around either, but even though I am supposedly in good health, I had a valve replaced and had no warning that anything was even wrong.  I went through the open heart surgery deal and thought, oh my, how will I finish my work.  When I got home three days later, the phone was still ringing off the hook and I picked it up and that was all she wrote.  My recovery was quick and was the direct result of my being able to be engaged in other people’s issues.  I never thought once about the surgery again after I came home that first day as I was quite nervous leaving the hospital.

Do your thing with the chemo and get ready to help us all keep on top of that wonderful strategizing that you just talked about.  I am 70 years old myself and for some reason I have more energy than ever before.  A fox news affiliate borrower was in trouble on his loan when he called for help and asked where I had disappeared to.  I said it was only temporary my friend only temporary - and then we went after Bear Stearns.  You know, the one we bailed out for 28 billion and then sold to chase for 287 million -

Life can be good when people become actively engaged in doing for others that which they cannot do for themselves - and trust me the administrations have made it that difficult.

to Jim:

Just wanted to take time out to recognize your statement that “there is surely a shortage of folks with integrity to speak the truth”  - oh how right you are.  You hit the nail on the head even though, I do hope through some miracle, that the generation following us will somehow, take that position -  you know, the one we used to teach our children so when they grew up, they would not want to harm their brother.

Thank you.

James B Storer

July 14, 2011, 8:32 p.m.

Joyce, re your comment today 5:48:  Your statement “my recovery was quick and was the direct result of my being able to be engaged in other people’s issues.”  That is usually a concept that should be suggested to anyone who is suffering, though it does not cover all cases.  At times I will undergo a period of rather intense sickness, and the tendency is to lie there and feel sorry for my predicament.  However, I have learned that getting suddenly involved in problems at large or in another person’s problem soon eliminates the sick feeling entirely.  It is like magic.  I suppose it has something to do with the subconscious.  I am not at all a religious person, and do not credit God, or whatever.  (Of course, I may be proved wrong there one day, but I will worry about that when the time comes.)
  At any rate, forcing ourselves to dig into another problem often works like a magic potion.  I am exceedingly grateful to you for bringing this to our attention.
  Skartishu, Granby MO

Thank you for your kind words -

To give you a little more incite, it just so happened that I answered the front door to a gentleman who had been a fighter pilot in the war.  He was a retired Leiutenant Colonel and had dropped by that morning to leave some papers.  When I invited him in, I told him to have a seat and we would go over the paperwork.  And then, all of a sudden, everything went black, I remember nothing.  But there he was telling me, that there was no time to call an ambulance that I was literally turning blue.  He said he tried three times to resuscitate me and nothing seem to work.  Then he said to himself, well I am 65 years old and I need enough breath to try it one more time.  And sure enough he took that one last breath and it did the trick.

Now how is that for having the right person at the right time who knew all that he needed to know to bring me back.  I married the old boy a couple years later.  My first husband of 48 years had recently passed away.  But as I said, I guess I had some unfinished work to do.  Today, I feel great and look 50, talk about second chances, well four was a charm.

Better times are just around the corner Mr. Storer no matter how bad it is at the corner where you are now.  You will get there and you will never have to look back.  Visit me at my website (which I am just now putting up -  I want to be able to make some comments regarding the New YOrk Times REporter on her book Reckless Endangerment -  I wrote a book very similar and one can see the difference between one that has been researched and one that lived the experience..  I did not purblish mine because of the concern back in early 2008 when everything was just breaking loose.  Too bad, people would have known a lot more a lot sooner.

So absorbed are we in our own minute lives that we can’t see what’s before us.

Why is it told that there is power in numbers when WE as American’s can get NOTHING done.


This reminds me of a plan I put into action at a school district where their meals and overral conern were substandard and their was an outrage by parents. When all else failed, I initiated a plan….whether it went to fruition or no the plot remains the same. 

In the simplest terms….

Make lunch for your children for a week!  That’s right!  Make it the night before or get up 30 minutes early and make that lunch!  Do not feed into a system that no longer works for you or YOUR CHILD and has no remorse.

The loss of income was/or would have been substantial….

Without that funding from so many hard working mothers and fathers the reverberations would have been felt, possibly throughout the district!  I’ve no idea if this went to fruition but the plot remains the same.

Do NOT feed into a system that shuns you on ALL levels!  Shun the banks for they are NOT going to be there for YOU…. NOR is the Government!

Keep your cash liquid AND close at hand!  Do NOT deposit your checks, do not invest and let us then see what comes of this.

WE are in control although so many are blinded by the menial and trivial pursuits of congressmen and women….NEEDLESSLY.

We do have the control but so many are ignorant or don’t want to see the truth.  They are the sheeple, blind to the reality of what is and are easily manipulated.  I am very so sorrowfilled for their blatant ignorance zane/or laziness.  I’m simply not sure which it is.

Joyce, I commend you for your continuous attempts at helping those less fortunate but what you MUST understand is that THEY must take those first steps in which to help themselves and NOT at the expense of those who truly try to help.  The PIPER must be paid… “some” form. 

Where’s the end? 

I’m no soothsayer.  I’ve no answers but unless we band together and spread the word… will be a continuous demise of which no one can comphrehend.

Joyce Cauthen

July 15, 2011, 6:26 p.m.

Hi Kathy:

Please understand that when most people come to FAirway ADvisory which is me, they have already been to four or five other places TRYING TO HELP THEMSELVES.  I have been in the Court rooms with some of these people and they never had a prayer.  To say that most people are not helping themselves first, is just not true.  I have been in this business for almost 48 years and I can assure that after running several mortgage divisons, CFO for mortgag companies, trouble shooters for the VA and Fannie and Freddie that I have been on the front line for a long long time. 

What was done to the homeowners of America will always be the shame of this country.  I do not know how many people you have worked with but trust me, when I get through with them, they have been schooled in such a way that, if it was their faught, I tell them why, but if it was the lenders faught, well we go after them.  None of this I am waiting for the AG’s the Justice Department or some Elizabeth Warren or Sheila Bair to fight our fights because those are just two women that mean well and are good people, but let’s face it, when I worked on the committees that advised the FDIC through the task prevention, they took the idea, but did not have a plan or a strategy for pulling it off nor did the feds intend that they could or would pull it off.  Why do you think the modification programs did not work - yes, I think you for commending me, but most people do not have a clue about the real pain and suffering - 

I do wonder if you recall the statement by a Fannie Mae repreentative when she said “they will feel the pain”  It was in all of the newspapers and what Fannie Mae meant was that if you walk away from your home without dealing with the servicer, we will make it painful for you.  I presume they meant the deficiency judgments that would be filed against the homeowner which we now know most were foreclosed on without the alledged investor even owning the property.  There is no way these individuals can fight this system by themselves even though I know quite a few who are standing up to the Courts and doing all that they can to win their cases.

These people do not have the money to hire attorneys and when they do, I want you to read the stories of how supposedly good attorneys were helping individuals.  Most just took their money and did nothing in return - therefore the homeowner again was additional prey to that legal aspect of it. Not to mention all of the scams that went on during the modification process because these people, trying to help themselves, believed in what the feds programs were supposed to be.  No thank you, it is suicide almost for an individual to try to fight them on their own. 

I wish I could say better things about our judicial system but listen to me here and now -  America gave up the rule of law to a great degree when the feds as they are standing right now along with the AG’s are doing nothing to help these people recover their losses.

One attorney general was praised because he was going after the debt collectors that were collecting on the deficiencies.  Well, as far as I am concerned that AG needs to be out of office - why wasn’t he some four years ago going after the banksters and the very people who made it possible for debt collectors.  You think the individual homeowner can fight for himself.  Trust me - they can’t believe a word even what the non profits tell them.  You know the groups that took hundreds of milliosn of dollars to do absolutely nothing that would have benefited the homeowner.  Another ploy to make it look like the feds were doing something when they knew the vultures of our financial system took these homeowners, hook, line and sinker.  It upsets me that no one has come to the rescue of these homeowners in such a way that they at least for now have lost their homes, families, communities and of course their jobs -  Now you tell me how can they help themselves.

I don’t mean to be brass, but I would like at least for some of these homeowners to get the understanding from those that seem to be prospering to let them know, their days as well, may be numbered. 

Unless, the people give up -  my hope that they will not and I will start putting out what information I can on Kindle that will address the issue for the homeowner - I am sick of the books written by research people who have never originated a loan, funded a loan, sold a loan, serviced a loan and then bundled up in a portfolio to be sold to investors who did not even have enough sense to read the prospectus.  Don’e even start me on the subject of violation of state laws, etc.  It is all over the place and the AG’s let it happen to you.  The people who voted those sorry suckers in -  Look at your foreclosure laws for your state so you can see all that the politicians have done to protect the special interest and the banksters.  They better be glad I am not up there running things because they would have to answer the questions - not the pony shows that our weak congressman have put on.

And now we are saying they are not ivnestigating thoroughly enough.  That means to me that the financial people have bought enough time to steal enough homes so they can enjoy a lot more of what is coming down the pike.

Before it is over with, the government will own the homes and assigning them to homeowners -  remember Russia -  seems like homes were owned by the state and then they did the right thing and changed their system back.  At least that is what I think.

If you think it is hard working 24/7 for nothing for the past five years helping these individuals save their homes or at least understand why what is happening is happening, then you would see I am not doing it for my health. -  Somebody has to physically do something besides talk, talk, and talk.

As you can see, I have been around the block more than once.  Don’t mean to offend anyone, but the truth of the matter is - before we know it, there will not be a home in this country that has good title even though you may have paid for it.

Thank you

Joyce Cauthen

July 15, 2011, 6:44 p.m.

And another thing -  we have been trying to blog and get people to band together for the past two years - we all knew then and we all know now, that even getting our voice in at this late date, that the degree of satisfaction will be greatly limited.

Get four good mortgage people together and perhaps one real estate attorney and present the plan that we came up with in 2008 and had that plan be followed more than likely it would have prevented this whole rotton mess.  We would have bought the time we needed to investigate and come up with resolutions while the people were in the homes, the investors were paid (including Wall STreet to my dismay) minimal jobs lost .  The most important aspect of the plan was that if you had minimal foreclosures, and people would continue to live in their homes, no REO management fees to the lender,  mimimal depreciation on properties, values which has destroyed today’s market, there is just so much this program would have done.  All the banks had to do was work with us on the Partnership program (no modifications needed).  It would have taken about 15 B to take care of the first 1 M homes across the nation and in doing so, you would not have had the trickle down effect and the damaged economy while we worked through the horrendous mess made by the financial entities who broke just about every rule in the book as far as I am concerned.\\

Thank you.  Yes I am mad - because I keep saying the same thing over and over - where is the voice of the people now that the homeowners who are doing well, understand that it was not the homeowner who bought a home he could not afford, it was a planned agenda on the part of Wall Street and the Banksters, with the stamp of approval from the government at least until they step up and clean up this mess.

@Grape e Good :)
Thank you for the support I really need it.If you or anyone else have other support grps can you please let me know? I think people need to see a face and lives that are being ruined and not look at this as just a building that we overextended ourselves for. I never overextended myself. I bought out of necessary to provide a place for my ill mother and my only child. I worked everyday at the same company for 20 yrs. I alone put down payment of 15k 14 yrs ago. I just wish people knew we are decent people in a bad situation. My self esteem is suffering because of all the horrible names we are called scammer, freedloaders,bums, etc… How can I raise a child to be accepting of people when I look like a failure. Especially in the neighborhood I raised her in for the past 20 yrs. I achieved alot on my own I raised a child w/o a single dime of child support,received my degree, nursed my mom until her death, helped my daughter through every aspect of school and now she is in college. And yet No one will admit the banks screwed us all. I recently saw some online articles “Down but not out, faces of long term unemployment!” People willing to tell their stories but also put a face to them and they have received an overwhelming amount of feedback. I think that would be something we can do. If not for Propublica and people like yourself and the others I mentally could not take another day of no sleep, no eating, crying and just heavy hearted.

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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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