(A song about foreclosures for Wednesday.)
Mother Jones has two must reads if you haven’t already caught them. The first is from Andy Kroll and is about Fannie and Freddie’s Foreclosure Barons. Given that we are experiencing record high defaults and foreclosures, and will continue to in light of high unemployment, the actual practice of how people are kicked out of their homes needs more examining.
Here’s something for those who think people are motivated by incentives:
The business model is simple: to tear through cases as quickly as possible. (Stern’s company handled 70,382 foreclosures in 2009 alone.) This breakneck pace stems from how the mills get paid. Rather than billing hourly, they receive a predetermined flat fee for the foreclosure—typically around $1,000—plus add-ons for each of the related services. The more they foreclose, the more they make. As a result, consumer attorneys and legal experts say, even families who have been foreclosed upon illegally—and who can afford to make good on their mortgages—end up getting steamrolled…
In 2006, for instance, a federal bankruptcy judge blasted New Jersey law firm Shapiro & Diaz for filing 250 home-seizure motions presigned by an employee who had left the firm more than a year earlier. Calling it “the blithe implementation of a renegade practice,” the judge slapped Shapiro & Diaz with $125,000 in fines…
The mills have little incentive to cooperate with efforts to keep people in their homes. Indeed, notes foreclosure-defense attorney Golant, once these high-volume firms run through the current backlog of subprime defaults, some of them may find themselves with little to do. “They have an interest in this going on as long as possible,” she says.
Hmm. 250 homes at $1,000 a crack versus a probability of a $125,000 fine. Given how unlikely it is that they would get caught, seems like a great deal. Thank god they didn’t sell someone a pot brownie instead of going renegade in kicking them out of their homes. I wonder if pushing this envelope and seeing the low fine on the back end is a good signal for those that hire the firm? That this might attract volume instead of hurt it?
I’ve heard from friends of friends that the international service industry aspect of this is also worth investigating. Outsourced call centers set up in India and elsewhere where the people on the other end have to figure out whether or not to proceed on a home delinquency. Given language and cultural differences, quants have had to figure out mechanisms for determining how to filter out those who can continue to pay. Also the idea of a people whose primary work and cultural experience involves listening to people in Phoenix cry about how they don’t want to be kicked out of their communities. I need to look into that more….
Confessions of a Tea Party Casualty
The other is David Corn’s Confessions of a Tea Party Casualty about how Rep. Bob Inglis (R-S.C.), with a 93% favorable rating from the American Conservative Union, got ousted by a Tea Party challenger in his primary. It’s an amazing look behind the scenes for those who have to fund raise and deal with constituents on the right:
On June 22, he was defeated in the primary runoff by Spartanburg County 7th Circuit Solicitor Trey Gowdy, who had assailed Inglis for supposedly straying from his conservative roots, pointing to his vote for the bank bailout and against George W. Bush’s surge in Iraq…
[Inglis:]”During his primary campaign, Inglis repeatedly encountered enraged conservatives whom he couldn’t—or wouldn’t—satisfy. Shortly before the runoff primary election, Inglis met with about a dozen tea party activists at the modest ranch-style home of one of them. Here’s what took place:
I sat down, and they said on the back of your Social Security card, there’s a number. That number indicates the bank that bought you when you were born based on a projection of your life’s earnings, and you are collateral. We are all collateral for the banks. I have this look like, “What the heck are you talking about?” I’m trying to hide that look and look clueless. I figured clueless was better than argumentative. So they said, “You don’t know this?! You are a member of Congress, and you don’t know this?!” And I said, “Please forgive me. I’m just ignorant of these things.” And then of course, it turned into something about the Federal Reserve and the Bilderbergers and all that stuff. And now you have the feeling of anti-Semitism here coming in, mixing in. Wow….
I hated Bill Clinton. I wanted to destroy him. Then I had six years out [after leaving Congress in 1999] to look back on that, and now I would confess it as a sin. It is just wrong to want to destroy another human being and to spend so much time and effort trying to destroy Bill Clinton—some of it with really suspect information. We went on and on about Whitewater. We had talked about the strange things about Vince Foster’s death. The drug dealing at Mena airport.
Noted Bilderberger lackey Kevin Drum tries to convince you that the number has no meaning.
If anyone is close to these things, how much is the TARP vote a contributor to these conservative guys getting knocked out in primaries? If he had voted against the bank bailout, would he have been safe?
On one hand, the story is meant to be read as a sad tale about a decent conservative getting pummeled by the unleashed anxieties of the base. But I’m sorry, you reap what you sow in this life. The fact that Inglis spent the 1990s trying to convince the nation, funders and voters that the Clintons had Vince Foster murdered and was running drugs is at least as baseless, mean and destructive to politics than the idea that there’s something fishy going on with numbers on the back of your Social Security card.
The idea that Inglis helped build a GOP machine based on pandering, lies and stoking paranoia among the base towards Democratic leaders and then at the end the machine came for him too is a fitting end. This does foreshadow how ugly it’ll get if the GOP takes over the House – the endless GOP investigations to destroy the Clintons will look like a Frank Capra in comparison.
Rortybomb 
The idea that Inglis helped build a GOP machine based on pandering, lies and stoking paranoia among the base towards Democratic leaders and then at the end the machine came for him too is a fitting end.
You can say that about Robespierre, too, but a lot of innocent people got caught up in that before it was over. As tempting as the schadenfreude of “live by the paranoid conspiracy theory, die by the paranoid conspiracy theory” is, the political collateral damage is still too likely to be horrible for me to be able to relax and enjoy the petard-hoisting.
I think we can see Rand Paul playing this little game now. And it’s quite interesting to see Rand Paul’s facial expression when interviewed by Rachel Maddow (or any other journalist who doesn’t let a question slide off after the first pitch is called “ball one”). You can see the wheels turning in Rand Paul’s head “How far can I stretch this one??, What election is this answer going to snag me on in the future??, Have I in fact gone far enough for the toothless southerner who barley picked up his GED with this thing about the government not getting involved when black people or gays are denied service in private restaurants??”
Rand Paul will win his election this year. It won’t be much of a challenge, and he’ll cruise to victory. But will Rand Paul be writing or telling the next Bob Inglis “Poor Me, Woe Is Me, They Actually Took Me Seriously” Biography which details some private meeting he had with 20 tea baggers he had no clue were connected to the KKK and some fringe elements that thought blacks were some conspiracy from the planet Saturn???? Or would Rand Paul make up similar such story in a sad attempt at sympathy??? I foresee it’s going to be an interesting web of lies we get to hear then.