Daily Nonsense

I found this article on the local Seattle PI web site and I think that it’s important enough to reproduce here.

Wily legal maneuver is holding off foreclosures

Homeowners demand to see original papers

By MITCH STACY
THE ASSOCIATED PRESS

ZEPHYRHILLS, Fla. — Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.

And just like that, the foreclosure proceedings came to a standstill.

Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.

During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.

Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.

“I’m going to hang on for dear life until they can prove to me it belongs to them,” said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. “I’ll try everything I can because it’s all I have left.”

In interviews with The Associated Press, lawyers, homeowners and advocates outlined the produce-the-note strategy. Exactly how many homeowners have employed it is unknown. Nor is it clear how successful it has been; some judges are more sympathetic than others.

More than 2.3 million homeowners faced foreclosure proceedings last year and millions more are in danger of losing their homes. On Wednesday, President Barack Obama will unveil a plan to spend at least $50 billion to help homeowners fend off foreclosure.

Chris Hoyer, a Tampa lawyer whose Consumer Warning Network Web site offers the free court documents Lovelace used to file her request, has played a major role in promoting the produce-the-note strategy.

“We knew early on that the only relief that would ever come to people would be to the people who were in their houses,” Hoyer said. “Nobody was going to fashion any relief for people who have already lost their houses. So your only hope was to hang on any way you could.”

Tom Deutsch, deputy executive director of the American Securitization Forum, a group that represents banks, law firms and investors, dismissed the strategy as merely a stalling tactic, saying homeowners are “making lawyers jump through procedural hoops to delay what’s likely to be inevitable.”

Deutsch said the original note is almost always electronically retained and can eventually be found.

Judges are often willing to accept electronic documentation. And lenders are sometimes allowed to produce other paperwork to establish they are the holder of a loan. Still, assembling such documents to a judge’s satisfaction takes time, which to homeowners is the point.

Lovelace filed her produce-the-note demand last fall after the bank acknowledged that her original mortgage document had been lost or destroyed. Since then, there has been no activity on the foreclosure — no letters from the lender, no court filings.

The law firm handling the foreclosure for the lender refused to comment.

A University of Iowa study last year suggested that companies servicing mortgages are often negligent when it comes to producing the documentation to support foreclosure. In the study of more than 1,700 bankruptcy cases stemming from home foreclosures, the original note was missing more than 40 percent of the time, and other pieces of required documentation also were routinely left out.

The first big success of the produce-the-note movement came in 2007 when a federal judge in Cleveland threw out 14 foreclosures by Deutsche Bank National Trust Co. because the bank failed to produce the original notes.

Michael Silver, a lawyer for two of the families in that case, said at least one eventually lost its home. Still, he considers the case a success.

“From the perspective of the person who’s in the home, you may have kept them in the house another 10 or 12 months,” he said. “If I can get a result with economic benefits to a client, then I think I won.”

Democratic Rep. Marcy Kaptur of Ohio endorsed the strategy in a fiery speech on the House floor during debate on the federal bank bailout last month.

“Don’t leave your home,” she said. “Because you know what? When those companies say they have your mortgage, unless you have a lawyer that can put his or her finger on that mortgage, you don’t have that mortgage, and you are going to find they can’t find the paper up there on Wall Street.”

April Charney, head of foreclosure defense for Jacksonville Area Legal Aid in Florida, said the strategy has been so successful for her that she now travels around the country to train other lawyers in how to use it. She said she has gotten cases delayed for years by demanding that lenders produce paperwork they cannot find.

“This is an army of lawyers getting out there to stop foreclosures so we can get to the serious business of creating solutions,” Charney said. “Nothing good is going to happen as long as we continue to bleed homeowners.”

[Thanks, SeattlePI]

As the ripples of the economic debacle continue to spread we will be seeing more cases like WaMu.  Washington Mutual collapsed in September and was acquired by JPMorgan for $1.9 billion. It was this nation’s largest bank failure in history.

Hopefully it will be the last such failure, but my guess is that the greed and malfeasance that fueled Wall Street for so many years under the tutelage and consent of still president Bush will find other companies at the brink of disaster.

WaMu cutting 3,400 Seattle-area jobs, 9,200 total

JPMorgan Chase & Co. is eliminating the jobs of 3,400 Washington Mutual employees in the Seattle area, part of 9,200 job reductions nationwide, a spokesman said Monday.

By TIM KLASS
Associated Press Writer

SEATTLE — JPMorgan Chase & Co. is eliminating the jobs of 3,400 Washington Mutual employees in the Seattle area, part of 9,200 job reductions nationwide, a spokesman said Monday.

Outside of Seattle, where WaMu is based, the biggest number of job cuts is 1,600 at credit card call centers in San Francisco and Pleasanton, Calif., and layoffs are generally no more than a few hundred in other areas, JPMorgan spokesman Thomas A. Kelly said.

None of the more than 20,000 workers in branch banks are being cut, he said.

"Our branch staff is not changing at all," Kelly said. "We need all the branch personnel we have now."

Washington Mutual, the nation’s largest savings and loan, collapsed in September and was acquired by JPMorgan for $1.9 billion. It was the nation’s largest bank failure in history.

WaMu had between 41,500 and 42,000 employees nationwide at the time, and the 3,400 Seattle-area layoffs amount to about 80 percent of the bank’s local work force, leaving about 900 workers, mostly at branches.

Earlier Monday, JPMorgan chief executive James L. "Jamie" Dimon met here behind closed doors with about 200 WaMu employees from retail branches. His visit came on the final day of WaMu pink slips, although "the vast majority were notified previously," especially in the last two weeks, Kelly said.

Dick Conway of Dick Conway & Associates, an economist and regional economic forecaster, said the job losses underscored his prediction that the four-county region that includes Seattle will have fallen into recession by the end of the month.

King, Pierce, Snohomish and Kitsap counties already have been hard hit by the construction and homebuilding industry collapse, making layoffs in other sectors especially painful, "but this one doesn’t appreciably affect the (regional) forecast," Conway said.

The WaMu jobs being eliminated are almost entirely white-collar positions ranging from executives, managers and supervisors to less highly paid workers in areas where JPMorgan staff can assume the added load, Kelly said.

Kelly said 4,000 positions nationwide, including 1,500 in the Seattle area, will be gone by the end of January while another 5,200, including 1,900 in the Seattle area, will help with the transition to the new ownership, with some work extending through the end of 2009.

All are getting severance packages based on longevity under WaMu policies, and transition workers are being paid at twice their previous rate until their jobs end, he said. The Seattle Times quoted unnamed bank sources as saying that severance consists of five weeks’ pay for each of the first two years of service and two weeks’ pay for each succeeding year.

"The transition employees are helping us move from WaMu computing systems, accounting systems and branding to the Chase brand," Kelly said.

The extra pay for transition staff will cushion the impact of the layoffs "but will not in the end prevent it," Conway said.

Loss of the WaMu headquarters in the 55-story Washington Mutual Tower will likely boost the downtown Seattle office vacancy rate, especially as new buildings that were started before the economic tailspin are completed, he added.

Washington Mutual was weighed down by its deep exposure to the crumbling mortgage market, which has been the hardest hit area of the markets since the middle of 2007. As mortgages increasingly defaulted beginning in 2007, Washington Mutual was forced to set aside billions of dollars to cover losses.

Shares of JPMorgan fell $5.54, or 17.5 percent, to $26.12 Monday as the broader market tumbled as investors continue to worry about the sagging economy.

[Thanks, Seattle Times]

In spite of the promises by Detroit and the lavish spreads in Popular Mechanics, the flying car I was promised in the July 1957 is really no closer to a reality now than it was then.  Sure, there are some one off solutions, but honestly, who can afford to drive or fly something with the price of gas today?

In the 8 long years since still President Bush has been in the White House, my automobile desires have turned down a different path.  One that makes both good economic sense and good environmental sense.  For the most part, those dreams have centered around the ‘Smart Car’ type of vehicle. 

Small, urban and with great fuel economy, the only detracting factor has been the long distance potential of these vehicles.  In short, there is non long distance potential.  If I owned one of these as my only vehicle and wanted to visit my sister in Portland I would have to consider alternative transportation methods.  Train, bus or maybe even a rental car.  Not the best of choices as far as I’m concerned.

But now, the story is a little different.  Volkswagen AG is announced the forthcoming production of a diesel-electric hybrid that promises almost 70 miles to the gallon.  That was not a typo – 70 miles to the gallon.  Just where do I sign??

Coming Soon from VW: A 69.9 MPG Diesel Hybrid

By Chuck Squatriglia

It’s official – Volkswagen is unveiling a hybrid to challenge the mighty Toyota Prius. And not just any hybrid, but a diesel-electric hybrid it says will deliver 69.9 mpg.

VW’s been experimenting with hybrids of the gasoline-electric variety since the early 1990s, but the Golf hybrid it will unveil next month at the Geneva Motor Show is the first production model the German company’s rolled out. Volkswagen isn’t offering much in the way of details, but the car is expected to have a  parallel hybrid drivetrain with a 2.0 liter engine. Look for it to have an all-electric mode at low speed, start-stop capability, regenerative braking and a 7-speed DSG double-clutch transmission, according to Auto Express and AutoBlog Green.

What’s all the techno-jargon mean? The Golf Hybrid will get almost 70 mph mpg (ed. note: D’oh!) while meeting Europe’s stringent Euro V and America’s Tier 2 Bin 5 emissions standards, making it green enough even for California. The car is said to emit just 89 g/km of CO2. (For comparison, the Prius emits 104 g/km and Honda Civic Hybrid emits 116.)

The hybrid Golf may be just the start.

According to Britain’s Channel 4, VW is considering the hybrid drivetrain in a Jetta and Audi A3. DailyTech says it also could appear in the VW Tiguan and Audi Q5 crossover utility  vehicles.

Auto Express says the Golf hybrid will be offered for sale in Europe by the end of next year. No word yet on when we might see it on this side of the pond. VW hasn’t released a picture of the hybrid, so we’re offering a shot of its diesel Golf Bluemotion.

[Thanks, Wired]

The ‘Big Three’, General Motors, Ford and Chrysler, have spent billions of dollars in the past few years betting that the American public doesn’t really want fuel efficiency.

That sounds like a harsh statement, but look at the facts:

1. The Hummer
2. Any Denali
3. Chevy Suburban
4. Ford Expedition
5. Cadillac Escalade
6. No electric car
7. Average MPG by manufacturer.

• Daimler-Chrysler: 24.7 mpg
• Ford: 29.9 mpg
• General Motors: 31.9 mpg
• Toyota: 38.5 mpg
• Honda: 39.6 mpg

The ‘Big Three’ have spent billions and billions to ensure our dependence on foreign oil.  Billions and billions to promote excesses in fuel consumption.  They could have learned, they could have done something.  But they CHOSE not to.

The following article lists 7 Key Questions.  But, CNN has missed one.  Question #8, what’s the payback?  Do you plan to take my hard earned tax dollar and simply continue the way that you have?

Here’s my thoughts:

1. Any bailout will be paid back in full with prime interest rates applied.  And you’ve only got 5 years to do it.
2. The bailed out car manufacturer will have an electric car for sale, nationwide, for model year 2010.  And there must be guarantees of sufficient stock on hand.
3. The bailed out car manufacturer will have a ‘Smart Car’ vehicle for sale, nationwide, for model year 2010.  And there must be guarantees of sufficient stock on hand.
4. Force closure of 50% of your dealerships.  Just stop selling cars to some of the lower producing dealers.

Without 100% compliance you don’t get the money, and if you renege then you get closed down with all assets sold to pay the debt.

Also, read Campbell Brown’s take on the bailout HERE.

Detroit bailout: 7 key questions

As Congress takes a look at whether to help the struggling U.S. automakers, here is what you need to know about what’s at stake for the Big Three.

By Chris Isidore,CNNMoney.com senior writer

Last Updated: November 18, 2008: 9:32 AM ET

NEW YORK (CNNMoney.com) — Congress is set to begin a heated debate on whether Detroit’s Big Three automakers — General Motors, Ford Motor and Chrysler LLC — will be next in line for a federal bailout.

Democratic leaders in Congress are in favor of some kind of help, as is President-elect Obama. But the Bush administration has balked on proposals to let the automakers tap the $700 billion Wall Street bailout approved in October.

Many leading Congressional Republicans have suggested that a better option is bankruptcy, enabling the Big Three to restructure and ultimately emerge as leaner and viable businesses.

How this debate plays out could determine whether this important industry survives — and in what form. Here are some quick answers to seven key questions about the crisis.

What do the automakers want?

The automakers are asking for about $25 billion in loans to help them survive until 2010. Advocates for a bailout argue that if the Big Three can hang on until then, they’ll be in position to be competitive long-term.

That’s because billions of dollars in annual savings won in the 2007 labor agreement with the United Auto Workers union kick in that year, including shifting the responsibility for retirees’ health care costs to union-controlled trust funds.

What’s more, it’s likely that car sales will pick up again by 2010 and that plant closings between now and then will bring the Big Three’s capacity in line with this demand.

How many jobs are at stake?

GM (GM, Fortune 500) has about 120,000 U.S. employees. Ford (F, Fortune 500) has about 80,000 and closely-held Chrysler LLC has about 66,000.

In addition, the three automakers have about 14,000 U.S. dealerships that between them employ another 740,000 workers.

The suppliers used by the Big Three also employ an estimated 610,000 people.

Add that up and you have more than 1.6 million jobs tied to the auto industry.

What happens if there’s no bailout?

GM risks running out of money later this year or early in 2009 without a bailout.

GM burned through $6.9 billion during the third quarter, leaving it with only $16 billion on hand as of Sept. 30. But it needs $11 billion to $14 billion to continue normal operations.

Ford and Chrysler have more cash relative to their needs, mostly from money they borrowed prior to the current credit crunch.

But each of those automakers could also run out of cash during 2009 without federal assistance.

What happens if an automaker goes bankrupt?

There are two types of corporate bankruptcy under U.S. law.

Chapter 11 allows a company to continue to operate as it sheds debts and contracts it can not afford.

In Chapter 7 bankruptcy, the company goes out of business fairly rapidly as its assets are sold off to try to satisfy its creditors.

What are advantages of an automaker going into bankruptcy?

Some argue that bankruptcy judges will be able to force the automakers to shed brands and dealerships as well as get the Big Three out of labor contracts they can not afford.

Other U.S. industries, such as steel companies and airlines, have used bankruptcy in the past to return to profitability without putting federal dollars at risk.

What are the arguments against a Chapter 11 bankruptcy?

Given the current credit crunch, many experts question whether automakers would be able to get necessary financing from lenders to help them during the reorganization process.

There are also doubts whether consumers would buy new vehicles from a bankrupt automaker due to concerns over their resale value and warranty. In effect, an automaker that files for Chapter 11 could eventually wind up going out of business anyway.

What are some of the other broader economic impacts if an automaker goes out of business?

Nearly 2 million Americans get their health insurance directly from one of the Big Three automakers. Most of them would lose that coverage if their company goes out of business. A failure of one of the Big Three could also cause a string of bankruptcies among suppliers.

And beyond the job losses at the automakers, dealerships and suppliers, media companies that generate a lot of revenue from auto advertising as well as retailers in towns where plants are located could also have to cut many jobs. The Center for Automotive Research, a Michigan think tank that supports the bailout, estimates that between 1.4 million and 1.7 million jobs indirectly tied to the Big Three would be lost in the first year following widespread auto failures.

[Thanks, CNNMoney]

In overnight trading European and Japanese stocks fell so sharply that futures of US stocks quickly lost value as to reach their maximum permissible free-fall loss of 6%.  Apparently we are not the only nation to be facing economic recession.

But we are the nation who is at the root of the global issue and the blame can be squarely placed on the shoulders of George W. Bush and Dick Cheney.  How’s that for a legacy Georgie?  You not only bring down the American economy simply to further line your pockets and those of your corporate buddies, but now your bringing down Europe and Asia as well.

Well done you piece of filth.  God has a special place in mind for you, it’s called hell.

Global Shares Plummet on Gloomy Data
By ALAN COWELL and JULIA WERDIGIER

Published: October 24, 2008

PARIS — Stocks plummeted worldwide on Friday, and United States futures fell so steeply that they reached their daily permissible limits, indicating a sharp decline in share prices when official trading opens in New York.

Futures on the Dow Jones Industrial Average fell by 550 points and both it and the Standard & Poor’s 500 Index were locked, although the New York Stock Exchange and Nasdaq said trading in the official market would open as normal at 9:30 a.m., Eastern time.

The global rout was propelled by dismal corporate earnings and economic data around the world pointing to a profound global slowdown.

In Europe, major exchanges opened with falls of around 5 percent that then turned even lower.

In Japan, the Nikkei 225 index plunged 9.6 percent, hitting its lowest level since April 2003.

[Thanks, NY Times]