Tuesday, April 27, 2010

Richard Zombeck of ShameTheBanks.org - Kicking Ass, Taking Names!


Richard Zombeck, HuffPo mortgage blogger and the founder of ShameTheBanks.org, where I have been blogging about our mortgage hell, is kicking some serious ass.

He is getting ready to go to Washington today armed with thousands of personal stories from people like us who are being kicked out of our homes by the very entities who caused this economic debacle in the first place - the banking/financial sector.

Richard has just been profiled by Bob Sullivan of the Red Tape Chronicles at MSNBC,  and ShameTheBanks is bringing to light the fact that these foreclosures are not anomalies or the result of consumer irresponsibility, but a business model for the banks which will not change until or unless they are forced to.

I want to give a big shout-out and thank you to Richard, for helping me and helping others get their stories out there, and showing that each one of us can find a way to bring about change. It's daunting, given the enormity of the forces (and finances) arrayed against us, but it is not hopeless.

Roll on, Richard!

Friday, April 23, 2010

Update: Reprieve (for now!)

Well, friends - it ain't over till it's over. That's all I'm saying.

Last week, we were sure we were toast. We talked to St. June on Friday morning, and she said that she didn't think that we were going to be able to pull this off; that they wanted our house and that was it. She said to my husband, "Why don't you give them a call yourself and see what they have to say." When he called, to our surprise we found out that not only was there no new sale date (we had been told that the new sale date was the 26th of April) but we had been taken off the foreclosure list.

Apparently the bankruptcy filing had put the house on hold. The bank asked my husband to take the house off of the bankruptcy hold so that they could 'offer him a loan mod'. St. June said to do no such thing; what they wanted was to lift the restriction so that they could take the house. Remember, OneWest bought IndyMac at a fire-sale price; this means that they bought our loan for pennies on the dollar, which means that the profit margin on our house is enormous. They have no interest in letting us stay in our house unless we make it more difficult to foreclose than to work with us.

This does not mean that they won't ultimately take the house, but it does mean that they're not taking it right now, which is a vast improvement.

I'll take limbo. Limbo beats 'game over'.

Friday, April 16, 2010

On Greed

(cross-posted at ShameTheBanks.org)

Hello, my friends.

Today, I would like to talk to you about greed.

In the course of trying to save our house, it has become necessary to publish our personal business - something I was not excited about doing.

I realize that in reaching out for help in public, there are going to be people who are supportive, and also people who are critical. When you put your business in the street, that is part and parcel of the deal. It would be ridiculous to expect any different. If you can’t take the heat, stay out of the kitchen. As a blogger, I know and accept those terms.

I have laid myself open to the finger-pointers, and I would like to respond.

My friend JP, who posted about my situation, wrote me today, saying,“People are already speculating that you guys are greedy and I had to tell them, No, they’re not.”

That is, if I may be so bold, high-larious.

If only.

This is how it always comes down for the individual.

In my post Entrepreneurship, Greed, 'Moral Hazard' and Music I tried to lay out some ideas that would explain what I’m talking about, but perhaps I can make it more clear here.

This is a microcosm of the kind of thinking that has brought our economy to its knees, and kicked the legs out from under the middle class.

Let me start by asking a question.

Is it ‘greed’ when a small business owner secures financing to pay for the first year’s operating expenses while the business gets going?

Would any sane person expect a business to start up with no capital, just saying, “Hey, if you can’t make enough profit to pay your bills as soon as you start, then you shouldn’t be in business”?

I would hope not.

But that seems to be what people expect of us.

As I wrote in the aforementioned earlier post, my husband and I are entrepreneurs. We are a small business - a two-person business. My husband is a session singer and songwriter. He has been in that house since 1983, including having to refinance to divide up the worth of the house during his divorce. He does not work for a company that pays his salary. His capital is his talent and experience. And that talent and experience have made it possible to live in a house in Los Angeles for over 25 years. We do whatever we can to get through the lean times so that we are able to produce our product. During one of those ‘lean times’ my husband wrote a TV theme song that paid our bills for five years. But if we had thrown in the towel instead of sticking with what we do as well as anyone in the world, that never would have come about, because we would not have been in the professional music environment where that kind of work opportunity exists.

Up until three years ago, we were able to weather the ups and downs of our unpredictable business, cutting back as our particular field got more and more difficult to make a living in. With careful management, we have been able to keep a home that our kids could grow up in. But when you have a business that is feast or famine, one thing that will not happen is that every bill will be paid on time. However, every bill does get paid. And we have had to understand that our credit score is going to reflect this, even though we live up to our obligations. 

Guess what? Not having a perfect credit score does not make one ‘irresponsible’. It means that the way our income comes in is different than people who are salaried or guaranteed a certain amount of money per week, month or year. And when we’re out of work, there is no unemployment insurance to cover us till we can find more work.

I am sick to death of being accused of being ‘greedy’ for doing what we need to do to stay in a modest home. I am tired of being constantly pressed to defend my choice of profession - especially when one of the main reasons people give for deregulation is that regulation ‘penalizes risk-taking and stifles entrepreneurship’. Yes, it’s really important not to have any limits on how much money people can make by whatever means they can - but only if it’s a certain kind of entrepreneur, I guess. It's vital to the American Way of Life™ to encourage risk-taking in pursuit of riches. You want to talk about ‘greed’ - let’s talk about the idea that allowing credit card companies to charge arbitrary and usurious interest rates is ‘competitive’ instead of predatory.

When people say “You shouldn’t own a home if you can’t afford it,” that is really not what they mean. They are making a knee-jerk moral judgment about you. Let me clue you - it would not be cheaper to live in an apartment or rent a house. And, guess what? You have to have some kind of decent credit score to rent the crappiest house or dinkiest apartment. They throw around this word ‘greedy’ without having the least idea of what that entails. I am not going to dignify these attacks with specific numbers - you don’t get to judge how my family lives our lives or spends our money because we have made public our situation with a predatory lender.

My issue is not with being broke - my issue is with being lied to, cheated and stolen from.

The reason that we took a predatory loan is that no other ones were open to us, and that we were told that taking a high-interest loan for a year would improve our credit score, and that at the end of that year we could get a better loan. When you do not have the luxury of knowing in advance how much or little money you will be making, you have to do the best you can with what is at your disposal.

We kept up our end of the bargain.

We made those outrageous payments on time for a year.

Had IndyMac kept up their end of the bargain, we would not be having this issue. But it took two more years of those usurious payments to break us.

Dear friends, our ‘greed’ is not the issue. We willingly forgo things that most of you would not consider doing without. Our priorities are not material things - new cars, clothes, vacations, furniture, restaurants; everything we have is second-hand, thrift-shop, broken, or old. We do not use credit cards, and have no credit card debt. Our only debt is our home. Our priorities are our kids, our time together, our music. But one thing we will fight for is a home that our children can feel secure in. 

We will not stand by and allow ourselves to be cheated and stolen from by a company whose greed was a major contributing factor to the collapse of our economy, simply because we don’t work for someone who pays us every two weeks and should be ashamed of ourselves because of it.

If we were in the same situation, and had a ‘regular’ job with steady pay, and were laid off, people would not be accusing us of being ‘greedy’ and irresponsible. But it's happening to those people too. The real ‘greedsters’ have raped the rest of the country - and been bailed out for doing it! No one is taking any money away from them; they’re simply given more - out of our pockets! 

I have had it up to here with living in Opposite World, where the biggest and greediest are admired for risk-taking, lying, and outright fraud in search of the biggest profits, and those of us who are trying to make our way in the world without starving or living under an overpass are condemned as ‘greedy’.

It is Big Greed, in fact, that has brought this country to the economic disaster we are now experiencing. It has taken somewhere around thirty years for it to happen but the policies of union-busting and deregulation have resulted in such an unequal balance of power between corporations and individuals that real wages have gone down steadily for thirty years for all but the one-tenth-of-one-percent, who have seen their income skyrocket 400%. Wages - money made from actual work - are taxed at 30%, and investment income - dividends from speculation (not used as a pejorative term; merely descriptive) - are taxed at 15%.

So let’s think about that. Since 1980, it has happened at an incremental level - not a giant crash, but in a imperceptible, ‘boiling frog’ kind of way, where it just gets a little harder each year to stay where you are, lifestyle-wise. So, people don’t realize that as a group the middle class - the American triumph of the twentieth century - has fallen farther and farther behind, until the inevitable happened - they could not spend any more.

Rather than wagging a disapproving finger at people who use more and more credit, we should be asking, “Why are people being put in a position where they need credit just to stay in the same place?” Why should you have to go into debt just to sustain a normal, middle-class lifestyle? Why should you have to owe the cost of a small house just to go to college? It was not that way when our parents went to school. We are simultaneously required to spend money to keep the economy afloat, and blamed for it at the same time.

We have been systematically stolen from for 30 years and the bill has finally come due. There is nothing left to steal.

So, please, keep your sanctimonious remarks about ‘greed’ to yourself.  Go insult someone else. You have no idea what you are talking about.

Thursday, April 15, 2010

The Up Side Of Hard Times - A Little Help From My Friends

When hard times are upon you, it's good to know you have people in your corner. I have gotten so much support from friends old and new - some are complete strangers, some are dear friends that I have known for years; some I've met and some I have never met in person.

One reason I have put the time and energy into blogging that I have is because of the blogging community. I have met some wondeful people who have become like family even though we have not seen each other face to face. Bloggers take care of our own.

I'd like to take a minute to say 'thanks' to my bro JurassicPork from Welcome Back to Pottersville. One of the coolest projects I've ever taken on as a blogger was a Photoshop extravaganza of "It's A Wonderful Life" recast with some of our favorite political and social characters from the Bush years. JP wrote the copy and designed the pictures; I did the Photoshop. I have to say I thought it was brilliant. I laughed my ass off while doing it.

JP has been kind enough to throw a blast my way re: our mortgage debacle.

It's this kind of thing that gives me motivation to keep on keeping on. Thanks, bro!

Monday, April 12, 2010

Obama - For the Supreme Court, Let Limbaugh Be Your Guide!

Dear President Obama,

You have been warned by your Republican friends that if you dare to pick a Supreme Court nominee who is anything less than radically right-wing, that a filibuster will be the result.

But, never fear! Your good buddy Rush Limbaugh has some words of advice for you! Sure, they may be a couple of years old, but I'm sure he means them just as much today as he did in 2005.

Rush said to tell them to shut the hell up:

"I'm tired of these Democrats acting like they won the election. Somebody needs to stand up and say, "When you win the election, you pick the nominees. Until then, shut up! Just shut up! Just go away! Bury yourselves in your rat holes and don't come out until you win an election. When you win an election, you can put all these socialist wackos, like Ruth Bader Ginsburg and Stephen Breyer, all over the court, but until then, SHUT UP! You are really irritating me."
So, come on, Obama! What are you waiting for? It doesn't matter who you pick - the Republicans are going to act like you nominated William Ayers. Might as well be hanged for a sheep as for a lamb, right? Go for a big fat socialist wacko! The biggest, fattest, socialest wacko you can dig up! Rushbo's got your back - what more do you need?

Sincerely, Alicia Morgan

(wow - thanks to a heads-up via fellow blogger Steve J at RADAMISTO , I find that Bartcop linked to my cross-post on The Smirking Chimp! Cool beans!)

Friday, April 02, 2010

Hey There, Tom Hoenig - Do You Like Big Blondes?

My new financial crush? Kansas City Fed President Thomas M. Hoenig, who makes me all swoony when he advocates for breaking up the megabanks, criticizes 'too big to fail' and says oh-so-seductive things like "I don't think we have any business guaranteeing Wall Street when we're unable to guarantee Main Street."

The U.S. should bust up its megabanks and impose strict laws curbing the size and complexity of financial institutions, a top Federal Reserve official told the Huffington Post.
In a 45-minute interview this week, Federal Reserve Bank of Kansas City President Thomas M. Hoenig, who's emerged as one of the few influential voices calling for a fundamental redesign of a broken U.S. financial system:

  • Lambasted the tilted playing field that benefits Wall Street banks over Main Street banks;
  • Called the idea that the U.S. needs megabanks to compete globally a "fantasy";
  • Said Congress should mandate simple, easily understood and enforceable rules -- rather than guidelines -- so regulators can restrain financial firms and rein in the financial system;
  • Prodded the Senate to get tougher on permanently ending Too Big To Fail by enacting laws that would take away much of the discretion currently held by policymakers (who bailed out financial firms when confronted with these decisions in late 2008);
  • And criticized the Federal Reserve's ongoing policy to keep the main interest rate near zero because it "guarantee[s] a spread to Wall Street", enabling unearned profits and "encourag[ing] speculation."
Hoenig's criticisms echo those made by reformers pushing to remake a financial system that melted down in 2008 after years of excessive risk-taking and loose regulation finally took its toll, causing the worst economic collapse since the Great Depression and costing the nation more than 8 million jobs.

Talk dirty to me!

Thursday, April 01, 2010

Deadbeats Debtors vs. Doing Business? Double Standard? Depends.

What's wrong with this picture?

A homeowner who walks away from an impossible mortgage which is double what his property is worth is a deadbeat who will suffer for years, credit-wise, for his decision.

But for the big boys? Not so much.

The rules are different, though, for the walkaway of all walkaways.

That title is reserved for what happened to one of New York's trophy properties, the 56-building Stuyvesant Town and Peter Cooper Village complex. Spanning 80 acres on Manhattan's east side, it's the largest single-owned residential area in the city. Its red brick buildings, built by Metropolitan Life in the 1940s for World War II veterans, are still a haven for the city's middle class.

Commercial real-estate firm Tishman and its partner, investment firm BlackRock, paid $5.4 billion to buy the property from MetLife in late 2006 -- right at the market's peak. They hoped to make money by converting rent-regulated apartments into luxury condos and raising rents.

Then the housing crash hit. The value now: $1.8 billion.

And you thought you overpaid for your house.

Tishman said last week that it was turning the property back over to creditors to avoid filing for bankruptcy protection. In recent weeks, Tishman failed to restructure $4.4 billion in debt, and couldn't find another buyer, according to a statement from the company.

Tishman exits the deal with a ding to its reputation, but it will be fine. It still has Rockefeller Center and the Chrysler Center in New York, and dozens of properties in cities worldwide. The company has about $33 billion in assets.

Helping homeowners stay in their homes is rewarding irresponsible and reckless behavior. After all, no one 'deserves' to own a home. Just because for 60 or 70 years the mantra of home ownership has been touted as the American Dream, and the tax structure ridiculously favors owning over renting, and just because people were told that buying a home is the best investment you can make, and that there was no better time than now to buy - in fact, not to buy would be the height of stupidity - doesn't mean you shouldn't have known better. Even though every financial pundit and economic expert was shouting it to the rooftops, somehow Joe and Jane Worker, with their in-depth knowledge of the intricacies of speculation, derivatives and credit swaps, should have known more than all of the Wall Street Masters of the Universes put together.

Yes, and they must be punished.

Do you have cable TV? Do you have a cell phone? Do you buy name-brands at the grocery store? Why, you irreponsible, greedy lout! Do you have a gym membership? Do you ever go to the movies instead of watching (non-cable) TV? Do you ever go out to lunch instead of brown-bagging it? Do you ever buy a latte at Starbucks? Why, you profligate spendthrift, you! No wonder you're in trouble, the way you just throw money around. That's the problem with you people. You just want everything, without ever thinking about whether or not you can afford it.

It's called moral hazard, and you deadbeats will continue to take advantage of those of us who are industrious and thrifty if you are allowed to get away with it.

Unless, of course, you are the CEO of the banks or investment firms who got rich off of stealing from homeowners. Then, the idea of being penalized in any way - by not getting your multi-million-dollar bonuses, by a salary cut, by getting your ass booted out into the street (or into jail) - is not to be considered. Why should you be punished, just because you caused the collapse of the American economy? You were just being a savvy businessman. That's the beauty of the Free Market™! We can't go around stifling initiative and discouraging entrepreneurship, can we? What are we, Russia?

Moral hazard? Don't be ridiculous. That's only for the little people.

So, how to make it better? Vilify the victims, pamper the perpetrators.

Carrot-and-stick? Sure! Here's how that works: beat the homeowners to a bloody pulp with the stick, and offer the golden carrot to the banks. If you have the temerity to offer any criticisms to the banksters whatsoever, be very sure that they are covered in 'pretty pleases' and are the mildest of suggestions only, which the banks are free to disregard - in fact, just forget anything was said, and please accept the abject apologies for implying that their behavior was anything less than honorable.

Putting the blame on homeowners for taking the advice of the experts, who are paid handsomely for their expertise, is like blaming the patient for following the advice of their doctors - not just one doctor, but the entire AMA - for prescribing an expensive medication that makes them sick. Maybe the doctors didn't know - or care - how dangerous the drug was, but they sure as hell all made a fortune from the pharmaceutical companies who gave them huge amounts of money to prescribe it, so it's no skin off their back.

And, let me tell you, this makes me sick.

Double standard? Depends.

Yes, I'm wearing them. I'm that pissed off.