Hold Wall Street Accountable! Occupy Our Homes Week of Action, May 18-25

Via OccupyOurHomes.org and OccupyWallSt.org:

Over the last few years, homeowners and residents around the country have taken a stand against the banks and fought foreclosures and evictions. The growing network of Occupy Our Homes supporters have signed petitions, made phone calls, and showed up to events to help families stay in their homes. Dozens of homeowners around the country have won their fights, but the crisis is far from over.

Communities have been destroyed as millions of families have already lost their homes to foreclosure, while millions more are underwater on their mortgages. The big banks are bigger and more powerful than ever. To date, no high level Wall Street executives have been prosecuted for their crimes, such as mortgage fraud and predatory lending. US attorney general, Eric Holder even admitted recently that in the administration's eyes, the banks are not only ‘too big to fail,’ they're now ‘too big to jail.’

As a new housing bubble fueled by Wall Street speculation is forming, it's clear that the financial industry didn't learn their lesson from the last mess. It's more important than ever for us to take action to demand meaningful relief for homeowners and prosecutions for the criminals at the top. Only through the power of thousands of organized homeowners taking action in the streets can we make the Attorney General and the President listen. Occupy Our Homes, the Home Defenders League, and others are joining fed-up homeowners who are ready to demand action-- join us the week of May 20th.

Over the next two months, Home Defenders from across the country will have an opportunity to tell their stories and fight back. Some will travel to Washington, DC the week of May 20th to make their voice heard directly at the Department of Justice. Join the fight! Sign up now to fight in your city. Scholarships will be available to attend the Department of Justice Action in Washington DC.

Click here to sign up

Moments before Ameia Egana, aged 53, was to be evicted from her fourth floor apartment, she clambered over the balcony railing and jumped to her death. Police at the scene said she died on impact. It is the second suicide in Spain in a matter of weeks; a man facing eviction in Grenada was found hanging in his home. A local judge called to the scene said the law on evictions must be changed. Al Jazeera's Peter Sharp reports.

On Monday, Spanish Economy Minister Luis de Guindos promised that no needy family will go homeless over mortgage arrears, responding to public fury over Egana's suicide as she was being evicted.

Via Reuters:

Facing accusations that politicians and banks are complicit in de facto "murder", Spain's banking association said its members would suspend eviction orders for two years for those borrowers worst hit by economic crisis and record unemployment.

Banks have repossessed close to 400,000 homes in Spain since a property bubble burst in 2008 and the nation subsequently sank into recession, throwing millions out of work and unable to keep up mortgage payments to the banks.

Nearly one million homes now sit vacant in Spain. A citizens' movement called "Stop Evictions" asked the banks earlier this year to forgive mortgage debt for properties worth less than 200,000 euros, and where all family members are unemployed. Currently under Spanish law, even when borrowers turn their home over to the banks, they must still pay the entire amount of the mortgage.

Police unions have agreed to support officers who refuse to participate in eviction proceedings. But until government finalizes reforms to eviction laws, there are those who will still face eviction and homelessness. Meanwhile, the banks are set to receive part of an up to 100 billion euro European bailout to offset their financial hardships as so many are unable to pay their mortgage debts.

The US’ housing bubble burst nearly six years ago, but the worst may be yet to come. After a landmark settlement, the major banks have lifted a freeze on foreclosures and government relief has been too small to make a difference.

Public housing budgets have been slashed, leaving larger numbers of people with no place to call home. The line between home ownership and homelessness is growing ever more blurry.

Meanwhile, popular anger is rising over the perceived impunity of the banks and some have found innovative ways of fighting back in an age of austerity.

Fault Lines travels to Chicago and California to see how people at the frontlines of the crisis are confronting the collapse of the American dream.

Watch Money, Power and Wall Street: Part One on PBS. See more from FRONTLINE.

Frontline:

FRONTLINE’s four-hour epic on the global financial crisis — the first two hours of which aired Tuesday evening — goes inside the struggles to rescue and repair a shattered economy, exploring key decisions, missed opportunities and the unprecedented and uneasy partnership between government leaders and titans of finance.

“Money, Power and Wall Street is demanding — this isn’t Finance for Dummies,” Evans writes in the review. “But it’s a compact and thorough lesson.”

In the first hour, FRONTLINE takes you inside the rapid rise of credit default swaps, including the voices of those who created them. With the real estate market booming, bankers successfully tweaked the credit default swap to bundle up and sell home mortgage loans to eager investors. But despite the money flowing into banks’ coffers, credit default swaps also loaded the financial system with lethal risk. And when the housing bubble burst, the credit default swaps — originally designed to stabilize the system — brought the global economy to its knees. Regulators, who had often stood on the sideline and allowed Wall Street to police itself, saw the ugly consequences rapidly unfold before them.

In the second hour, FRONTLINE investigates the largest government bailout in U.S. history, a series of decisions that rewrote the rules of government and fueled a debate that would alter the country’s political landscape. It offers play-by-play accounts of several secret meetings that permanently altered the financial system.

“The program feels fresh and vivid — and takes no prisoners,” writes Evans. “FRONTLINE finds plenty of blame to go around (Goldman Sachs and CEO Lloyd Blankfein take a particular bruising), but is most devastating in its dissection of the chummy collusion between bankers and the government leaders who should have been watch-dogging them.”

Part Two:

Watch Money, Power and Wall Street: Part Two on PBS. See more from FRONTLINE.

You can read the interviews at the heart of Frontline's "Money, Power, and Wall Street" online here.

"Money, Power and Wall Street" continues next Tuesday, May 1st, with an inside look at how the Obama administration, including a divided economic team, has handled the crisis and how the financial world has returned to many of the practices that created the meltdown in the first place.

The New York Times reports:

After months of painstaking talks, the nation’s biggest banks have agreed to a $25 billion settlement that could provide relief to more than two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad government settlement aimed at halting the housing market’s downward slide.

Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out because earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected.

Still, the agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders. In addition, 300,000 homeowners are expected to be able to refinance their homes at lower rates, while another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000.

Fannie and Freddie alone get a $150 billion bail-out, cash money, straight from your hard earned tax dollars. The victims of criminal actions on the part of the mortgage giants, millions of them, get $25 billion, sort of.

Note in the NYT's article, "It is part of a broad government settlement aimed at halting the housing market’s downward slide." The goal of this "settlement," such as it is, is to help the "market." It's anyone's guess whether or not this will actually help the precious market. But $2,000 isn't going to accomplish anything to ease the pain of a family after they've seen their lives destroyed by a bank that's raking in billions in profits every quarter. Don't forget now who it is that has the power in this country. Hint: It isn't you and me.

Conveniently, Yves Smith at Naked Capitalism has listed the top 12 reasons we should hate this mortgage settlement:

1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.

2. That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401 (k)s. Refis of performing loans also reduce income to those very same investors.

3. That $5 billion divided among the big banks wouldn’t even represent a significant quarterly hit. Freddie and Fannie putbacks to the major banks have been running at that level each quarter.

4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.

5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves. The framework is similar to that of the OCC consent decrees implemented last year, which Adam Levitin and yours truly, among others, decried as regulatory theater.

Read the rest of the list at Naked Capitalism.

Federal officials laughed at warning signals, and gushed that Alan Greenspan was totally awesome as the economy headed towards the biggest iceberg in about 70 years. Reading the Federal Reserve transcripts- available here - was much like watching "The Titanic," without the Grammy winning theme song or the romantic sex scenes between Kate Winslet and Leonardo DiCaprio.

Via:

As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”
...
Some officials, including Susan Bies, a Fed governor, suggested that a housing downturn actually could bolster the economy by redirecting money to other kinds of investments.

And there was general acclaim for Alan Greenspan, who stepped down as chairman at the beginning of the year, for presiding over one of the longest economic expansions in the nation’s history. Mr. Geithner suggested that Mr. Greenspan’s greatness still was not fully appreciated, an opinion now held by a much smaller number of people.

Meanwhile, by the end of 2006, the economy already was shrinking by at least one important measure, total income. And by the end of the next year, the Fed had started its desperate struggle to prevent the collapse of the financial system and to avert the onset of what could have been the nation’s first full-fledged depression in about 70 years.

The transcripts of the 2006 meetings, released after a standard five-year delay, clearly show some of the nation’s pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with shepherding. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.

I had friends already losing their jobs and homes in 2006. The people who should have been looking out for us, they were laughing. George W. Bush even put a medal on Alan Greenspan.

Timothy Geithner is, as you're probably all aware, our Secretary of the Treasury, and Ben Bernanke our current Chairman of the Federal Reserve, as well as the central bank of the United States.

Alan Greenspan (Or Mr."Terrific" as Geithner referred to him) is the former Chairman of the Federal Reserve of the United States from 1987 to 2006, first appointed by Ronald Reagan. Greenspan held economic views influenced by Ayn Rand, need I say more? Probably not, but I will. He also supported the idea of the privatization of Social Security, and deficit-spurring tax cuts.

Senator Harry Reid (D-NV) once referred to Greenspan as “one of the biggest political hacks we have in Washington.”