Showing posts with label Mortgage Fraud. Show all posts
Showing posts with label Mortgage Fraud. Show all posts

Saturday, December 17, 2011

Do we let abandoned buildings rot while our people are homeless and unemployed?

I woke up this morning thinking about the stereotype of The Bronx, the abandoned tenement buildings with abject poverty, homeless people everywhere, squatters in the abandoned buildings, and so on. My girlfriend lives in a part of the Bronx that doesn't fit this stereotype, so it's nice to know the Bronx is not entirely a destroyed city full of abject poverty and abandoned buildings. At the same time many cities have many abandoned buildings tying up properties which could be put to productive use.

The current phase of US history we have lots of unemployed people, presumably a growing homeless population, housing foreclosures happening at a rapid pace, and hence lots of empty buildings.

The housing bubble a few years ago involved building too many homes and buildings, and selling them to people under shady mortgage situations, and in some cases to people who didn't have the proper financial wherewithall to be buying a house.  This meant vast swaths of mortgage fraud, people forced out of homes, home foreclosures, and so on.  I have not seen it with my own eyes, but understand their are plenty of U.S. cities with huge numbers of foreclosed-upon unoccupied properties.


We don't yet know what will happen in those areas with many newly empty buildings.  Will they go like the other areas with lots of empty buildings, and become slum lands?   Will the economy recover and people start returning to those areas?  Or will they crumble in the wind?  Whatever will eventually come of those places, we do know one thing. They are a missallocation of resources.


On the one hand we have abandoned buildings, and on the other hand we have homeless people.

One thing going on is groups who are aiding people in fighting against foreclosures on their homes.  Coincidentally Rachel Maddow had a piece on her show about this last night.  The Occupy groups are in some cases "Occupying" the homes of people threatened with foreclosure and eviction, and in some cases winning against the banks.  There are also groups who've been doing this work for a long time, and Maddow interviewed one of them (see below).

The other thing going on is a discussion of matching up homeless people with abandoned buildings.  But there is an issue of ownership.  The owner of an abandoned building probably isn't interested in having their building become a homeless shelter.  At the same time a building where the owner has abandoned the building, it has no occupants, it is not being maintained, etc. shouldn't there be a procedure where such properties can be taken away from the owner and turned to positive use?  Should a property owner who is exercising no control over a property retain the right of ownership of that property?

The following perhaps proves that I don't know how to write laws, and proves how difficult it is to write a law that specifically identifies a specific class of properties. In any case this attempts to precisely describe the class of unnocupied unmaintained buildings, and create a process where those properties will be put to use.

What should happen to abandoned land and buildings?  What is the extent of "property owners rights"?   Should a property owner be required to maintain some control or make use of their property?

In the macro-economics scheme any unused property is an under-utilized asset.  Should society step in and steer under-utilized assets to being utilized?

PROPOSAL

Land and property owners of unoccupied properties, within the boundaries of an incorporated city, are required to maintain their properties, and if not ownership of the property reverts to the local government.
  • this section applies to land or properties within the boundary of an incorporated town, village, or city
  • this section applies to such land or properties which has no occupants
  • by property and properties, we mean buildings such as homes, apartments, duplexes, office buildings, retail buildings, factories, warehouses, etc
  • an occupied property includes one or more of the following conditions
    • the actual owner of the property (or agent) lives in the property, or visits it regularly. For an example, the owner might retain a security company to have someone patrol the property
    • a renter or lease holder who has contractual rights to the property lives there or otherwise appropriately uses it regurlarly
  • maintaining the property includes one or more of these actions
    • for property that is simply land (no buildings) the requirements are minimal
    • if the property is occupied as set forth in the previous section, this law does not apply perhaps, but what about buildings with renters where the landlord does nothing to maintain the building?
    • ensuring the building stays in working order
    • painting, landscaping upkeep, and other routine duties
  • when these conditions are met (no occupants, no maintenance) then the building and it's land becomes owned by the incorporated city whithin whose boundries this property is The city is required to place these properties for sale or otherwise set forth a plan to put the properties to use with occupants and maintenance.





Friday, October 28, 2011

Crusading state-level Attorneys General seeking to take down corrupt financial industry - Maddow

This week a major focus on Rachel Maddow's show is the corrupt financial industry that nearly killed the U.S. economy.  The deed was enabled by corrupt business practices that were in turn enabled by relaxed regulatory regime.  Largely speaking, even though many companies in the financial industry died, bankrupted, merged, etc, the people who committed the practices are often still employed in the same financial industry, and the regulatory system around them has changed very little.

As Maddow recounts, earlier in this decade a crusading NY Attorney General, Elliot Spitzer, took down several corrupt NYC financial industry titans.  That was before he went on to a prostitute scandal and a stint as a CNN host.  In her coverage this week she focused on two Attorneys General, Eric Schneiderman from New York and Beau Biden from Delaware.   One take-away from this is that Change can happen when bright people pursue a course of correcting wrongs, and use their position of power to enable change in the world.

Of course there is positive change and negative change.  Someone in a position of power can create a corrupt system, or work to remove corruption.  It depends on how they apply the power their position gives them.

These people who are in public service - ideally their job is serving the better interests of all.  Consider the Attorney General job.  It's about seeing justice is served, lawbreakers are found and punished, the law is applied in a just manner, etc.

But history is replete with people who used positions of power to instead feather their own nests, or work with cronies to feather each others nests, or create a regime of dictatorial control, or .. etc .. on and on ..  There have been plenty of Attorneys General who used their positions of power to hide corruption, to stonewall investigations, etc.  Again, it's a matter of how each individual uses their time in the position of power.

During the interviews below, Maddow asked Beau Biden (son of Vice President Biden) why these investigations are happening at the state level rather than the federal level.  Interesting question, and he answered that while there is a lot of state-level investigation, that it seems the state level investigators are cooperating, there is also federal level investigations.

 

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This starts a little slow with analysis of Republican advertisements, the poor pitiful state of Democratic advertisements .. etc ..  The segue point is a Democratic ad that really hits hard on the mortgage crisis corruption.   Almost half of Arizona home-owners are "under water" with foreclosures "everywhere" but Romney's message to Arizona is that he wants the mortgage crisis to "hit bottom" and that home-owners are on their own.

In other words - the banks (e.g. the rich 1%) got bailed out, while we the 99% get foreclosed.

Would it work to brush the corruption under the rug and ignore it?  The business-friendly Republicans want to brush this aside, but does this mean they think "business-friendly" means "corruption-friendly"?

A lot of the base raw feelings driving the Occupy protests is this exact issue.  Rampant financial corruption and corrupt practices.  Who is going to step up to the plate to correct this?  A minute ago I suggested that people in positions of political power have a choice, to use their power for the good of all, or to use their power to protect corrupt practices keeping the game going.

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Later in the show they had Glenn Greenwald on to shill for his latest book, but this weaves into the same narrative.  This book, With Liberty and Justice for Some: How the Law Is Used to Destroy Equality and Protect the Powerful, "lays bare the mechanisms that have come to shield the elite from accountability" and "shows how the media, both political parties, and the courts have abetted a process that has produced torture, war crimes, domestic spying, and financial fraud".

The book has a chapter titled - Too Big To Jail - great meme.

Basically, he was there to talk about officially sanctioned corruption and the general pattern that the rich get away with things we little people would be in jail over.

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In this segment Maddow shows, with numbers charted on a graph, the effect of the system.  Note that Greenwald identified a tipping point 40 years ago when Richard Nixon got pardoned, and by being pardoned started this "Too Big To Jail" precedent that's been used to let others get off with little or no punishment for misdeeds.

Here the graph shows how, upon the election of Ronald Reagan, the economic well-being of the 99% and 1% began to diverge.  The Rich got Richer far faster than the rest of us, creating an enormous gap in financial well-being.  Reagan did a lot to remove the regulatory system that had kept the financial system in check, keeping corruption out of finance.  One thing that enabled was for the rich to get richer, and it enabled the rampant corruption.

Oh, and this more-or-less proves how bogus were the "Trickle Down Economics" of the Reagan era.  We see right here that there's no trickle-down.

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This is the segment where she talks about Elliot Spitzer in the period he was the crusading New York Attorney General, the role now held by Eric Schneiderman above.  The segment starts with a quote from the Chamber of Commerce complaining about Spitzers effectiveness.  From the Chamber of Commerce perspective we can imagine they saw Spitzer as a threat, but that just fits the meme where "business-friendly" really means "corruption-friendly" doesn't it?

Thanks to Spitzer, Wall Street was being "perp walked" for stuff they used to routinely get away with.

Sure, investments are not a sure thing and investors should certainly know this.  THe one thing investors deserve is honest advice.  Instead what they got was crap self serving advice that actively misled investors to investing in crap.

Visit msnbc.com for breaking news, world news, and news about the economy

Immediately after the prior segment, we have Beau Biden (VP Biden's son) on to talk about what Delaware is doing.  Where Delaware enters the picture is jurisdiction.  Where Delaware is the preferred state to register corporations, those corporations are subject to accountability by Delaware's judicial system.

Beau Biden as the Delaware Attorney General has just launched a lawsuit against the entire mortgage industry.

The allegation is that in the mid 90's the banks privatized regulation of mortgage notes, so that mortgages could be securitized so that they can be traded on the open market.  A result of the securitization was that it's now nigh-on-impossible to determine who actually owns a given house, because the mortgage originator securitizes the mortgage to sell the mortgage securities on the market.

 

Friday, October 21, 2011

Dylan Ratigan from October 2009 covering a large protest against bankers in Chicago

Highly recommended video to watch to remind us about what was happening with the banking system bailout, and what he calls fraud and stealing.

Dylan Ratigan demonstrates the fraudulent shell game leading to the 2007-8-9 mortgage crisis

The youtube video is from October 2009 and has Dylan Ratigan, Eliot Spitzer and comedian Sherrod Small play a game of credit rating theater. There is extreme truth in this little bit of comedic fiction, including the fact that absolutely nothing has changed. Pass this one to a friend.