Lawlessness from Guantánamo to Mobile

Yves Smith at Naked Capitalism tells the story of two home-owners cheated out of their lives by Chase, a.k.a., JPMorganChase whose CEO, Jamie Dimon, is high up on the Obama White House invite list. When getting a feel for just how ruthlessly corrupt this institution is, try to keep in mind that this is the outfit feted and celebrated by the Democratic Party stalwarts, not the usual suspects regularly fellated by bad old GOP figures like Romney, Bachmann and Perry. I introduce the harrowing tales this way to underline that we are experiencing a slow coup d’état by the financier/rentier class that has completely seized control of both major parties and is proceeding to beggar us in exactly the bipartisan fashion that Obama is so enamored of.

Here’s one of the stories: April Barnett bought a house in Oxford, Alabama in 2007. Her fiancé and later husband Jason helped with the down payment.

In 2010 the house burned down. It was fully insured. The insurance company paid Chase the full amount of the balance due on two mortgage notes.

Chase cashed the checks. Voilà. But not so fast.

Shortly thereafter, April, now pregnant, checked the online record of the mortgage balance. It was listed as unpaid. No one at Chase could tell her why.

April and her husband now started getting repeated harassing telephone calls demanding further payment. They could never get anyone at this ‘bank’ to check their own records to find that the full value of the mortgage was sitting in Chase’s accounts and had been for months.

Chase then began foreclosure proceedings—despite having received the full amount of the mortgage balance from the insurance company.

Eventually, the bank ‘discovered’ that it had received the money but somehow did not know what it was for, despite having clear instructions from the insurance company that had issued payment. But Chase then demanded an additional $8,000 to ‘bring the loan current’. [Hint: was this the real reason the payment was ‘misapplied’?]

Eventually, Chase was forced to admit that it had been paid in full and released the lien. However, when April and Jason later sought a mortgage for a new house, they discovered to their horror (but not surprise) that Chase had reported them to a credit bureau for the (unfair, illicit, negligent, whatever) foreclosure. Their new mortgage loan, which was going to be at 4.1%, suddenly shot up to 6.8%, a penalty of over $100,000 over the life of the 30-year note.

While preparing to sue the ass off Chase, the now destitute couple tried to buy a washing machine at a home supply store. Their application for a store credit card was denied because Chase still refused to take the phony foreclosure off their credit report.

Now, there has been a lot of talk about banks making ‘mistakes’. What happened to the Barnetts were not mistakes—they reflect a pattern of misapplication of monies engineered to cause phony arrears or defaults, which then enable the mortgage servicers to charge extra fees and browbeat, intimidate and torture defenseless consumers into paying off the extortion. It is absolutely in no way different from having to give Paulie and Christopher 500 bucks out of the till of your corner deli to avoid a broken kneecap.

Smith has a second, eerily similar story, which those with strong stomachs and not in a homicidal frame of mind already can read here that illustrates once again that these drive-by assaults on customers are not accidents, errors, mishaps, goofs, screw-ups or the result of a low-level clerk’s hangover. THEY ARE STANDARD OPERATING PROCEDURE FOR CRIMINAL INSTITUTIONS KNOWN AS BANKS.

That’s why the Wall Street-Geithner-Obama posture of not pressing ‘technical’ issues against mortgage abuses (like New York AG Schneiderman is trying to do pretty much solito and getting all kinds of heat for) that could ‘undermine the banking system’ is so much repugnant bullshit. Schneiderman wants to unearth and prosecute and eventually put a stop to concerted criminal behavior that, if left unchecked, can and will undermine the rule of law in business. If our present Masters of the Universe think the housing market is weak now, just wait until the great mass of citizens from Nevada to North Dakota gets the idea that having a bank loan means risking your face being ripped off.

For example: in the comments column of Smith’s post today, I read this from Caitlin O: ‘We’ll be looking for a retirement home in another decade or so and are saving for it now with the intention of paying cash. We also intend to have a full forensic title audit done before we close. Sadly, this seems to be the route a prudent person has to take today’.

Caitlin is answered by Alice who writes: ‘You are hardly the crazy one here. You are the smart one, and this is coming from someone who made a career in the mortgage business. The “biggest investment in your life” is what we told our loan applicants. I would never advise anyone to buy a home today. I have read the docs they are having people sign at closing, and the only thing the pretender lenders have left out are the requirement that you turn your first-born over to them’. [emphasis added]

I further believe that this sea of corruption is exactly and precisely reflected in that other festival of lawlessness known as the Bush Administration and specifically its successful introduction of torture into the accepted, standard practice of the government of the United States, along with suspension of habeas corpus rights, massive invasion of privacy and all the rest of it, now being celebrated and justified by Cheney on his book tour.

Both of these phenomena—the great bank rip-off and the torture regime—have been endorsed and strengthened by President Barack Let’s-Look-Forward-Not-Backward Obama, ie, the one now in office and towards whom any meaningful resistance must now be directed.