Monday, February 20, 2017

The banks in general

I am still answering the poster on my previous post about my mortgage mess. You may or may not be interested, but I am locking replies to that post.

The banks were not required to loan to the poor. That is a talking point that was written to make the banks look like the victims and not the architects of the mortgage loan bubble. If there is no dispute, can you point to any evidence that this ever happened? Or is it pure conjecture?

The fact is that Phil Gram was key in passing the Commodity Futures modernization Act of 2000, which PROHIBITED the government from interfering in those transactions.

The root of the banking bubble was the Gram Leach Bliley act of 1999. It was sponsored by three Republican Congressmen, and enabled banks to invest in real estate, something that had been illegal since the great depression, when banks losing gobs of cash in the real estate market triggered the depression. The architect of the Gram Leech Bliley act was Clinton's Treasury Secretary, who left the administration after the act passed, and became an executive at Citigroup, being paid over $17 million. Gram left Congress and wound up as an executive at UBS.

 Before these two laws were passed, all of these loans were regulated and the trading of mortgages was public record, as they were required to be recorded at the county courthouse. The banks had a plan for that, too. They created a private records database called MERS that was out of the view of the public and government regulators. This allowed the banks to trade in mortgages without those pesky laws covering public records allowing the citizens to see what was really going on.

Once the safeguards were eliminated, this allowed the main part of the plan to come together: Banks were able to make high risk loans to people who could not afford to repay them, and securing those with mortgages on property that was worth far less than what the loans were worth, in effect making them unsecured. They did this by using appraisers who would say the homes were worth whatever they needed to be for the loan to look legitimate.

Then the banks bundled those loans into mortgage backed securities that were rated as AAA investments, and sold off to institutional investors- the retirement and pension funds of the American workers. When those loans began to fail, the funds crashed and the banks, through their Republican and TEA party friends, blamed the pensions of the workers, and screamed that they (the banks) were about to fail, and collected nearly $2 trillion in taxpayer funded bailout cash. Over $1.6 billion of that bailout cash was used to paid bonuses to bank executives for pulling off the largest transfer of wealth in human history.

Sunday, February 19, 2017

California Budget

California's secession movement likes to point out that California is the sixth largest economy in the US, and that they are a net producer of funds. Let's take a look at that, shall we? This post will include a lot of numbers.

According to Ballotpedia, California collects a total of $138 billion in state and local taxes, while receiving about $55 billion in direct compensation from the Federal government. That is a total of $193 billion in government revenue. In FY 2015, it spent a total of $252.5 billion, leaving a deficit of about $60 billion. When Federal grants are considered together with ALL Federal spending, California receives more Federal money than any other state: a total of $343 billion in FY 2012.

Pew divides this spending into five categories:
Retirement Benefits. Just under one third, or $102 billion, was devoted to retirement benefits, including Social Security payments and veterans benefits.
Nonretirement Benefits. Less than one third, or $99 billion, was spent on nonretirement benefits, like Medicare, food assistance, and unemployment insurance.
Grants. About one fifth, or $67 billion, was devoted to grants, which includes those for Medicaid and other health care programs, transportation, education, and housing. (To capture federal funding for grants to states, Pew used—a site devoted to federal spending transparency. The site has well-known problems with data quality, and some of these issues may have affected Pew’s results.)
Contracts. About one seventh, or $48 billion, included money for contracts for the purchases of goods and services, like military and medical equipment.
Salaries and Wages. Finally, less than one tenth, or $29 billion, was spent on salaries and wages for federal employees, including military personnel. (Pew measured salaries and wages using sources that report salaries and wages by place of employment, rather than residency, which could distort this measure.)
All of that spending would need to be replaced. Some of it because it is needed, some because the voters of the state would demand it. California would have to pay for things that the Federal government currently pays for, but isn't included in the above numbers: National Defense, which according to this article, the supporters of CalExit think that they won't need, because they are going to be neutral, like Switzerland. If this were the case, I would imagine that the new nation of California would become either part of Mexico or part of China within a decade.

Replacing all Federal spending would mean that the proposed nation of California would not only need to build some sort of military, but would need to replace the roughly $8900 a year per capita that the Federal government currently spends there. Annually, California currently collects $138 billion in taxes, while the Federal government collects $405.8 billion from the state. This means that there would be a deficit of about $53 billion, which would require a tax increase of about $1,400 per capita, or about  $5600 on average for a family of four. This number represents about 10% of California's mean family wage.

Additionally, California will have to work deals to replace goods and services that they do not currently produce themselves. For example, it may be true that the northern part of the state provides much of the water that the state needs, the southern half of the state gets a large portion of its water from outside of the state, and that would need to be replaced, probably with a new pipeline that would need to be built and paid for.

All of this ignores the political aspect. The northern part of the state largely detests the liberal elites who live in the coastal and southern regions. How will they keep those parts of the state from breaking off and remaining in the US?

None of this concerns the Calexit folks, who say:

Yes California doesn’t have any policy positions. Its members don’t know how the new nation’s government would be set up. The group’s goal is to first have the state secede and then figure out how it should run.
“People are asking about the new nation’s vaccine policy, and I’m asking, ‘Are you high?’  ” said Karen Sherman, who holds group meetings at the gay dive bar she owns in San Diego. “We want to explore independence, not create a new country around vaccines.”
Secede first, and then decide how to run the country? Is that anything like passing a law to see what's in it? Like petulant children, they are angry that the election didn't go their way and want out, but they have no idea how to run things, no plan, and are doomed to fail. Like the Confederacy, they are incapable of making this work because of economic problems and an inability to actually BE a nation, but are doomed because they have  no idea what they are doing.

Saturday, February 18, 2017

Day without immigrants, life without a job

A group of immigrants decided to participate in a nationwide protest where immigrants refused to come to work. The boss told them to come to work, or they would be fired. They missed work, and were subsequently fired. Now they are complaining about it.

You don't get to decide when you want to work. If you don't like it, start your own business and see if your customers expect work to be done on time. You wanted to protest by showing your employer what a day without immigrants looks like. He responded by showing you what life without a job looks like.

Thursday, February 16, 2017

OPD loses gun

An Orlando police officer's patrol car is broken into while it is parked in front of his apartment and what is described as an "AR 15" is stolen. The cops claim the rifle was locked in a security device and the car had an alarm system. I seriously doubt this. I wonder if the AR in question had a happy switch or not.

This isn't the first time this year that OPD has lost weapons. An H&K UMP 45 was stolen from another patrol car just two weeks ago. This one DOES have the happy switch.

OPD makes a habit of this. Former OPD police chief (now turned democratic congresswoman) Val Demings had her service handgun stolen from her police vehicle back in 2009. She disciplined herself by sending herself a strongly worded letter.

The other curious thing is that it turns out that the press IS capable of typing "AR 15" and not immediately following that up with "assault rifle".

Wednesday, February 15, 2017

Is Universal Studios a school?

Universal Studios Orlando last year fired a concealed weapons permit holder for having a firearm legally stored in his vehicle. Even though there is a law in Florida which states that an employer cannot discipline an employee who has a concealed weapons permit in their vehicle, Universal claims that they are exempt because there is a school on the property.

They are correct in that the law states:

(7) EXCEPTIONS.—The prohibitions in subsection (4) do not apply to:
(a) Any school property as defined and regulated under s. 790.115.
But is Universal Studios considered school property simply because a small portion of the total property has a school on it? Let's see what 790.115 has to say:

For the purposes of this section, “school” means any preschool, elementary school, middle school, junior high school, secondary school, career center, or postsecondary school, whether public or nonpublic.
Perhaps, but that does open a can of worms for Universal. You see, that means that each and every employee, contractor, and vendor must undergo a background check per Chapter 1012 of Florida statutes:

Except as provided in s. 1012.467 or s. 1012.468, noninstructional school district employees or contractual personnel who are permitted access on school grounds when students are present, who have direct contact with students or who have access to or control of school funds must meet level 2 screening requirements as described in s. 1012.32. Contractual personnel shall include any vendor, individual, or entity under contract with a school or the school board.
They all must be rescreened every 5 years.

Then there is THIS law:

386.212 Smoking prohibited near school property; penalty.—
(1) It is unlawful for any person under 18 years of age to smoke tobacco in, on, or within 1,000 feet of the real property comprising a public or private elementary, middle, or secondary school between the hours of 6 a.m. and midnight. This section does not apply to any person occupying a moving vehicle or within a private residence.

 Does Universal REALLY want to go down that road?

Protecting the rights of child molesters

If you work at Disney and are arrested for more than 400 counts of producing child pornography and molesting children, you will be suspended because Disney cares about your rights, and doesn't want to fire you unless you are convicted of a crime.

Unless you are a gun owner and aren't accused of a crime, because guns.

Tuesday, February 14, 2017

TSA smuggling

TSA workers spent 20 years smuggling tons of cocaine into the US.

How did establishing the TSA improve security again? Are the competing with the BATFE for most useless and corrupt alphabet agency?

Monday, February 13, 2017

Mortgage scam

There are a few misconceptions in the comments to my last post, so I thought I would clear them up. See, I used to believe that the homeowners were just as much at fault as the banks. Maybe some of them are, but I have come to believe that the majority of them were defrauded by the banks. Let me explain:

I bought a house in the early part of 2007, right at the center of the housing bubble, although I didn't at the time know it was a bubble. I paid about $250,00 for a house. This was not outrageous, as I was making $85,000 a year at the time. I could easily afford the payments, so I was not being greedy, nor did I have any intent to defraud anyone. Later that year, the bubble burst. Within 2 years, my house was worth less than half of that amount.

At the same time, many other homes in the area saw declining value, meaning that the taxes paid on those homes decreased to the point where the Fire Department began closing stations for the day, rather than pay firefighters to staff them. This caused me to take a 25% cut in pay. I tried to work a deal with the bank, they refused.

Stuck with a depreciating asset and declining wages, I took the only viable option available: I filed bankruptcy. For those who are not familiar with it, Chapter 7 is not some painless process where you get to walk away from debts, no questions asked. There is a means test, where the court investigates your income. Then there are hearings where your creditors, the Trustee, and the Bankruptcy Judge try to liquidate your assets to pay your creditors. The Federally appointed Trustee gets a commission for any assets that he finds, so he is motivated. After all of this, you lose pretty much everything you own. Certainly nor painless.

It was during these hearings that my Original Mortgage holder lied and claimed that they still owned the mortgage and the note. THEY committed fraud, in that they lied IN COURT in order to make money. When I discovered that, I began doing research. I sued them, and they paid me nearly ten grand to drop the case.

Then they tried to foreclose. It turns out that they were not the owners of the note and mortgage. They tried to falsify the papers, and their lawyer was disbarred. He wound up fleeing the country with gobs of stolen cash. The foreclosure was dismissed.

This was all a scheme by the banks to get money using the government and a major fraud scheme. They lied and overvalued houses in order to make loans for FAR more than the homes were worth, to people who couldn't afford, nor qualify for them. The sold those soon to fail loans to investors, most of whom were pension plans and 401k retirement funds. hundreds of billions of dollars in the form of retirement nest eggs disappeared overnight.

The conservative talking point is that all of this was caused by a requirement for banks to lend to low income recipients. That is false. It was a bipartisan payoff where key members of both parties were paid off to change key laws and help the banks rake in profits.

With all of that, don't lecture me about moral obligations.

Sunday, February 12, 2017

The end of my mortgage story

For those of you who are not familiar with the story of my mortgage, here is the tl;dr version:

I had a house that lost two thirds of its value in the real estate crash. With no other way to stop the bleeding, I declared bankruptcy and was going to turn the house over to the bank. The bank testified to the bankruptcy court that they were the owner of the note and the mortgage, but were lying. They had sold the note and mortgage to Fannie Mae two years earlier.

I sued them for fraud and we settled out of court for almost $10,000. The mortgage holder that wasn't then sold the note and mortgage again, this time to Nationstar mortgage. They recorded the sale in the county clerk's office. At this point, there were at least four different entities that had claims to this mortgage: MERS, Nationstar, Fannie Mae, and the originating bank.

Then the originating bank tried to foreclose. The foreclosure was dismissed, and Nationstar claimed to not have any record of owning the mortgage.

The feds stepped in and sued the banks. I got another $4,000 in THAT lawsuit.

The originating bank continued to send me demands for payment, even though prohibited from doing so by the bankruptcy court, and the fact that they no longer own the note and mortgage. So after a few years of this, I got tired of it and sued several more times over the next few years. I wound up getting another $25,000 in damages from those suits.

Then, with only a month left until the statute of limitations was to kick in, the original bank filed papers transferring the mortgage from NationStar and Fannie Mae back to themselves. The only problem was that I had letters from both of them saying that they had no knowledge of these transfers.

The original bank then filed for foreclosure, claiming that they had lost the original note and mortgage, but (trust us, they said) we are entitled to foreclose.

I was all set to fight them in court. I had proof that they were lying, and I was going to keep the house. If I won, the statute of limitations would have passed, and the house would have been mine to keep.

They got a federal judge to rule that the bank's lying was immaterial, because I had declared bankruptcy. A person who has declared bankruptcy, he wrote, cannot fight lawsuits from creditors, even ones who were only creditors because of their own fraudulent activity and statements, without undoing the bankruptcy. I was told by the judge's staff that he wasn't about to give away free houses. This would have exposed me to my old debts, along with 5 years of interest and penalties. I had to give in, and they got the house.

At least they have finally left me alone, paid me a total of about $50,0000, and I got to live in that house for five years, rent free. Still, they committed fraud and got away with it.

Don't feel sorry for the banks. They made hundreds of billions of dollars.

Saturday, February 11, 2017

Cut off the cash flow, they'll deport themselves

So word is out that illegal immigrants are going to fight deportation and attempt to clog the court system. I have an idea that I think will get rid of the problem by using existing law, and will force illegals to deport themselves.

Currently, the law is than an employer can be fined $2,000 for the first offense, and up to $10,000 for subsequent offenses, of hiring of each illegal immigrant. That includes companies who hire contractors with illegals in their employ. Fines can be even larger if RICO statutes are used for bigger  companies. So here it is: go after the source. Give an award of 50% of the fine collected for any person who provides information that an employer is hiring illegal immigrants.

If a business has hired 4 illegals, and the person who turns them in will get between $4,000 and $20,000 in reward money, legally hired employees will be lining up to turn in their bosses for a shot at the cash. Employers will know this and will stop hiring illegals. With jobs much harder to come by, many illegals will self deport.

I have seen first hand how Disney is saving millions by hiring contractors to perform services at their hotels and movie theaters. The contractors hire illegals, and are thus able to make money by paying them low (in many cases less than minimum) wages.