The Folks Who Run Our Economy Believe in the Easter Bunny

The folks at the Fed who run our economy apparently believe in the Easter Bunny. And Casper the Friendly Ghost. And Santa Claus.

I mean, I can only conclude the folks over there are completely unhinged from reality given their claim that no people–not a single homeowner–was wrongly foreclosed.

A months-long investigation into abusive mortgage practices by the Federal Reserve found no wrongful foreclosures, members of the Fed’s Consumer Advisory Council said Thursday.

Jason Grodensky, who paid cash for his house yet lost it to Bank of America in “foreclosure” nevertheless. The Fed says there were no wrongful foreclosures.

Christopher Marconi, who got foreclosed by Wells Fargo on a house he didn’t own and had never seen. The Fed says there were no wrongful foreclosures.

Jonathan Rowles, who never missed a payment, who got foreclosed by Chase while he was away in Iraq, in violation of the Servicemembers Civil Relief Act. The Fed says there were no wrongful foreclosures.

Granted, they came to this conclusion, in part, by defining wrongful foreclosure in a way that totally ignores title problems, failure to serve homeowners, and tack-on charges servicers have used to force people into default so they can foreclose.

During a public meeting attended by Fed chairman Ben Bernanke and other regulators, consumer advocates on the panel criticized federal bank regulators for narrowly defining what constitutes a “wrongful foreclosure.”

[snip]

Kirsten Keefe, a member of the Fed consumer panel and an attorney at the Empire Justice Center in Albany, New York, said the Fed’s report defined “wrongful foreclosures” as repossessions of borrowers’ homes who were not significantly behind on their payments.

And they’re not releasing the report–they’re keeping it totally secret! I can only presume that the logic and data (based on just 500 loan files) behind it is so laughable that releasing it would be more damaging than simply issuing this claim with no proof.

Nevertheless, as my list above makes clear, it is simply impossible to state that there have been no wrongful foreclosures and still claim to have even a shred of grasp on reality.

Which I guess, given the smoke and mirrors that has constituted our economy in recent years, is about what we ought to expect from the Fed.

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  1. radiofreewill says:

    Will Elizabeth Warren go through the looking glass with ‘the team,’ or will she stand with us?

    • earlofhuntingdon says:

      As with Dawn Johnsen, it looks like it’s time for Ms. Warren to resign in disgust and by submitting a thorough, detailed public letter of resignation. It’s clear this administration ignores her advocacy and considers her an inconvenient PR necessity, not a team member; she should stop acting like one.

      • econobuzz says:

        At this point, Elizabeth Warren is a joke — or worse. You can’t work for a crook and not become a crook.

        • earlofhuntingdon says:

          She’s nothing of the kind. But continuing to remain part of an administration that cares about Main Streeters about as much as a lion cares about an antelope is not consistent with her career of sticking up energetically, intellectually and forthrightly for the little gals and guys that the system purposely screws for fun and profit.

  2. manys says:

    I have to think this semantic dance is due to there still being a risk of civil suits against the servicers (at least).

    • wavpeac says:

      I guarantee the civil suits are a HUGE risk. As I have stated many times…the balances on most of these mortgages are bogus…along with the titles, the forgeries, and everything else. Google any one of these big banks…Gmac (they just keep changing names…so the bad stuff falls off), bank of the west, etc…and you will have literally hundreds of current complaints about bogus fees. It’s infuriating when the bank literally just plops an extra thousand on your account and doesn’t even bother to explain these fees…filed under miscellaneous. Along with all the other violations of Tila and Respa…And still, suing is difficult. These banks are managing to keep a lid on this part of the story, over and over again.

  3. earlofhuntingdon says:

    Statistical analysis using a sufficiently large database doesn’t work when the outcome is predetermined. This is more farcical than the self-written, self-administered bankster stress tests. It’s paid for, mind, by taxpayers who have been wronged by systemic foreclosure fraud and by the terms of the “everything’s fine, don’t change a thing” bankster bail out.

    • mzchief says:

      Looks like the self-written, self-administered stress tests is a trick the banksters learned from corporate fiction writers making responses to DoD RFPs. This is what deadwood looks like folks. The green shoots are going to come from the grassroots pushing up through states like Wisconsin.

  4. john in sacramento says:

    Thanks for pointing out the punchline

    A months-long investigation into abusive mortgage practices by the Federal Reserve found no wrongful foreclosures, members of the Fed’s Consumer Advisory Council said Thursday.

    ROFLMAO

    What a buncha f’ing assholes

  5. bittersweet says:

    According to the link at Huffingtin Post, “the Fed did find signifigant problems in banks mortgage operations”. The problem seems to be that they did not allude to these in the title of their report, and then did not release the report. Is it a white wash do to a misleading title? That is pretty lame. What entity would be the most appropriate party of a class action suit? There are plenty of losses to show cause.

  6. orionATL says:

    the big lie,

    the soviet-style reaallly big lie,

    i thought it would leave with g.w. when he left in jan, 2009.

    no such luck.

    turns out obama and his gang are big fans

    of the big lie.

    let’s see now:

    we’re withdrawing from iraq,

    we’re succeeding in afghanistan,

    al-quaeda still a big-time nat’l security threat

    guantanamo captives still a big-time nat’l security threat

    no problem with gulf oil spill quantity, damage, and reparations,

    public option in health care,

    bradley manning and other whistleblowers a nat’l sec threat,

    aig bailout necessary and appropriately done,

    bank executives bonuses just after bailouts,

    new laws reining in banks not needed,

    no unwarranted foreclosures have occurred.

    help me, what have i left out?

    • pappy says:

      Orionatl, The republicans had the biggest lie, Now with Obama the biggest lie was already there. He just ofrgot he had other options and did not use them. GWB left behind his big lie shoes and Obama stepped right into them and they fit real well. So we are hearing the same old song and sdance and the music never changeds— the dance partners are globalism, corporateers, and PLUTOCRACY for our goveremtn. Our congressmen are now owned by the corporateers who do the bidding of the corpoarions and the rich as their very on lobbyist. As of this day I have not figured out why the corporateers and the rich even have a need for the K street lobbyist as the congress is doing a fine lobbying job for them. Our country as I have knwon it has been flushed down the crapper. I can still hear that sucking noise Ross Perot spoke of. Its a loud sucking noise. We have lost our goverment.

      • radiofreewill says:

        Schultz and Neuman is about right!

        When it comes to the New American Century of “everything is fucked-up, and nobody goes to jail” – I think most folks would agree that ‘I know nothing!’ Obama has been indistinguishable from ‘What, me worry?’ Bush.

  7. Stephen says:

    So will the “Big O” have the guts to refer to this report as cover for his collusive inaction regarding foreclosures, considering the many questions that “might” crop-up in the run-up to the election in 2012 and considering he supported “The Ben Bernanke” as Fed chairman? By the way what happened to that watered down Fed audit which was to take place at some point in time?

  8. PeasantParty says:

    So the Feds investigated themselves and their member banks and found nothing wrong at all. Then they declared that they will not release their report and findings publicly.

    Why do they expect people to believe that marlarky?

    Our system is beyond broken.

    • frankiet1 says:

      They expect people to swallow because that is what they’ve done thus far. Professor Pain hasn’t enrolled enough Americans within his classroom yet.

      However, the day he does…it’ll be game over for the powers that be.

    • earlofhuntingdon says:

      I’m sure there isn’t an “FDL” party line, your snark aside. It would be helpful if there were less corruption and enabling of it in the highest reaches of government. Even if we were to move in that direction, it will be hard for the public to compete against the increasingly entrenched and enriched power of a small, wealthy elite.

      Allowing these MOTU’s to escape their frauds with no investigation or even a slap on the wrist will enrich them further and ensure that they continue to pose systemic, unacknowledged risks to national and international finance, as well as to the shrinking pocketbooks of most Americans. Their business models are already built on imposing fraudulent penalties and fees; this kid gloves treatment will make it worse.

    • marksb says:

      So what is the FDL party line these days?

      I speak only for myself, but I hang out here when I can and agree with much of the opinion expressed. Thus, if I may be so bold,

      -Truth, always. Not shaded, not withheld, not lies to advance a position or policy or convenience, just the F’ing truth. If it hurts, so be it. If the truth means we have to deal with more shit, pick up a shovel. Just tell the truth. Our constitution, our founders, our citizens expect and demand nothing less.

      -Honesty in all dealings with everyone. Citizens, businesses, governments, political representatives. This goes hand in hand with truth and shouldn’t have to be stated, but there’s almost zero evidence that anyone in power ‘gets’ it, so: Do The Honest Thing.

      -Our government should be By The People, For The People. Not for corporations. Not for the rich people. Not for the people from one party or organization or another. Not from one religion. For The People.

      -Free Speech, not limited in any way.

      -People unable to fend for themselves, for whatever reason, should be helped a bit. Helped out of the gutter, helped to heal, helped to pursue happiness, like the founding document said.

      Pay attention and do *everything* we can to clean up our act around energy and pollution.

      -At the same time, pay attention to costs and taxes, efficiency and clarity. Just do the Right Thing and do it well.

      Keeping or dumping the Fed? I dunno, just look at it in this context.

    • papau says:

      There are some very good economists on FDL that could suggest a direction on “Fed/No Fed” – I would tend to follow their ideas.

      I never worked as an economist although I had a bit at school and needed a bit as an actuary. I seem to recall a central Bank that created Money for a money supply that smoothed transactions as being a useful thing. I do not recall Federal Reserve Banks that are owned by the Banks they regulate as being a good structure. Indeed I do not know of Fed bank regulation – during and after the Greenspan period – as effectively even existing – Greenspan moved them into Ayn Rand – the market will correct itself – despite the meltdown in 1987 and 2007.

  9. AitchD says:

    It’s possible they’re not releasing the report owing to the discovery of many typos on every page: wherever ‘banker’ or ‘bankers’ should appear, instead the text had “bankster” and “banksters”.

  10. Teddy Partridge says:

    Surely we can at least Hope that this Mr Bernanke won’t be renominated for another term heading the Federal Reserve after this shameful showing today. Secret reports? Secret decisions? Secret meetings?

    Oh, wait.

    • ottogrendel says:

      Secret reports, decisions and meetings just add to their power and authority. Only the high priests are equipped and holy enough to handle the heavy mysteries of faith, while they read the mass in Latin with their backs to the congregation and later perhaps release a smoke signal or two to communicate with the ignorant, supplicating masses.

      Solutions and freedom lie in doubt and disbelief.

  11. Ironcomments says:

    This falls in line with other fake government reports; like we are winning in Afghanistan and Iraq, there is no oil in the Gulf of Mexico, the back of the recession is broken, we don’t ever torture in particular our own citizens, budget crisis, etc.

    • ottogrendel says:

      With your laundry list in mind, “fake government report” sounds quite redundant. Is there another kind? What’s that about the Ministry of Truth and who controls the past . . . ?

  12. gigi3 says:

    Let’s face it. This country is under the control of delusional sociopaths hell-bent on global domination (PNAC – Full Spectrum Dominance). Welcome to Techo-Neofuedalism.

  13. Gabriele says:

    There are no fraudulent foreclosures.
    The governor of Wisconsin ends collective bargaining rights.
    The governor of Michigan has authority to declare fiscal emergency and install his own private company to run any city or town at his discretion.
    Utah has declared that public records are no longer public.
    Onward to ending all unions, attack minimum wage, social security, Medicare.

    Welcome to the United Corporation of America!
    You have no rights.
    Democracy? That’s only something we pretend to teach other countries.

    • ottogrendel says:

      Same as it ever was, perhaps. The period in US history when the expanding empire was on top and largely unchallenged that lasted for two or three generations, and where largely stolen or borrowed wealth was distributed evenly enough to create a middle class may very well be an aberration.

      Think about government troops machinegunning striking union workers 100 years ago, or whole towns owned by coal mining companies, or railroad monopolies that regulated and owned huge swaths of the West, or the property theft and internment of tens of thousands of Americans whose parents happened to be born in Japan, or prohibiting more than half the population from voting for most of the nation’s existence. The recent past may be no declensionist narrative but a fading blip on an otherwise static trajectory.

      Frequently, when you scratch a tax-hating Tea Partier you find that their imagined, Edenic past was the 1950s—you know, when wealthy folks paid gobs more in taxes than they do today. I appreciate that the US’s new origin myth begins in WWII with the Greatest Generation, but was there nothing before Hiroshima and Nagasaki?

  14. ottogrendel says:

    “. . . given their claim that no people–not a single homeowner–was wrongly foreclosed.”

    From the Catholic mass: “These are the mysteries of faith.”

    The sacred myths and rituals as well as the integrity and authority of the priests must be maintained before the eyes of the faithful, who must never be allowed to peer into the sanctum sanctorum (or pull back the curtain on the Great and Powerful Oz, as the case may be–“Don’t let them see us. Don’t tell them what we are doing.”). These things are more important than observable, material reality. There are no institutional problems relating to child-molesting priests and there are no wrongful foreclosures. And once one has crossed the bridge to believing in an omniscient, benevolent, invisible man who lives in the sky, or perhaps at the Federal Reserve, what’s an Easter bunny or two?

  15. madprogressive says:

    Seriously, are you people still expecting anything remotely resembling truth or reality from the Obama team. Really! This guy is running around touting the strong economic growth that doens’t exist, and that no banksters had anything to do with the state of America nor broke any laws, yet still people seemed surprised when the Obama crew continues with this Alice in Wonderland approach to reality. I’ve long given up on Obama, say in 2009. But apparently there are still people out there who actually thinks this guy actually gives a damn. This guy is nothing more than a softer version of a conservative republican. Look at what’s happening to Bradley Manning, an ordeal this president could end in 5 seconds, if he wanted to. At this point, I see so little difference in Obama and Bush. And as long as progressives and liberals continue with this fantasy that the mean old Republicans are making him do these horrible things, then we need to just shut the hell up and stop complaining because it means we’re as out of touch with reality as the world the right exists in. Remember this, the report clearing the criminals, once again, didn’t come from the republican house, it came from Obama’s treasury and fed, and Bradley Manning is not be kept in horrid conditions by the right.

    At some point one party or group in this country has to start dealing with the reality we are daily confronted with, and that means, we have to deal with this duplicitous, dishonest, and bought and paid for President. He’s got to be held account, along with the nutcases on the right. Wisconsin wouldn’t be in the shape it’s in if progressives and liberals would stop protecting this guy as he continues to sell us out, because we would’ve made him stand up and fight, and then the right wouldn’t have walked back into power due to his failures. So, what’s happening all across this country with conservative and corporate attacks lies at the feet of Obama and the progressive movement as well.

    Here’s the most important question right now, WHERE THE HELL IS OBAMA SPEAKING OUT AGAINST ALL THESE ATTACKS ON WORKERS AND THE MIDDLE CLASS. He’s long since sold the poor out, and now, is willing to sell the rest of his base out too. As long as he raises his $1 billion to run for office in 2012, he could give a damn about anything else.

    • ottogrendel says:

      Don’t be too hard on Obama or Bush. They are only faces on the TV. One holds a Coke, the other a Pepsi. They don’t know what levers to pull. They are powerful only in so far as we believe in them.

  16. sadlyyes says:

    Reid: Dems ready to compromise

    By Josiah Ryan – 03/10/11 10:38 AM ET

    Senate Majority Leader Harry Reid (D-Nev.) said Thursday he’s ready to compromise on spending after a GOP spending-cut bill won more votes in the Senate than the Democratic alternative.

    “We accept the lessons of yesterday’s vote,” Reid said in floor comments. “We know we’ll have to make a sacrifice to reach consensus, and we are willing to do that.”

    http://thehill.com/blogs/floor-action/senate/148633-rei

    • papau says:

      Very True – but Reid appears to not mean the Dems are ready to fold – at least not until Obama says “fold”. The 57 billion cut GOP measure lost by a vote of 44 to 56, while the 6 billion cut Democratic bill was rejected, 42-58, as the Democrats lost 11 in the caucus (Sens. Michael Bennet (D-Colo.), Kay Hagan (D-N.C.), Herb Kohl (D-Wis.), Carl Levin (D-Mich.), Joe Manchin (D-W.Va.), Claire McCaskill (D-Mo.), Ben Nelson (D-Neb.), Bill Nelson (D-Fla.), Bernie Sanders (I-Vt.), Mark Udall (D-Colo.) and Jim Webb (D-Va.).

      In other interest stuff this week, approval of NAFTA based (job losing) trade deals is being demanded by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Orrin Hatch (R-Utah), the panel’s ranking member, who asked that the trade representative’s staff hold immediate technical discussions on legislation implementing the agreements, effectively demanding a start to getting to a vote – and yesterday we had Hatch’s threat at a Wednesday hearing with Kirk to hold up the South Korean deal unless the administration also moves forward with the Colombia and Panama agreements – it would be nice if all 3 deals never come to a vote – we lose fewer jobs in that case.

      Meanwhile, while the GOP promised not use these types of tactics to get their way in January, today Sens. Jeff Sessions (R-Ala.), Marco Rubio (R-Fla.), Jim DeMint (R-S.C.), Rand Paul (R-Ky.), Pat Toomey (R-Pa.), Mike Lee (R-Utah) and John Ensign (R-Nev.) threatened to hold up any Senate legislation that doesn’t specifically deal with reducing the nation’s debt, complaining about a lack of debate time on the two budget bills just defeated.

  17. WilliamOckham says:

    The sample size tells us the level of fraud they were looking for. Auditors use a rule of thumb that says pick a sample size that would give them a 95% chance of getting 3 bad items in their sample. They chose 500 as the sample size, so that means they would expect be able to identify fraud if it exceeded .006 (or .6% or 66000 of the 11 million foreclosures). The headline ought to read study shows that there are probably less than 60,000 wrongful foreclosures.

    • papau says:

      True – but does the sample design include a decision to accept the banks unaudited contention that folks were behind (a proven problem within my own family where no one was late but a credit rating was destroyed because one arm of BofA did not know what another arm of BofA had as records)? Indeed data quality – and auditing on underlying data – is always a problem. I recall when I had financial statements and their audits to worry about – and my Chief Accountant told me that the auditors never find errors more than 3 levels down in the summary sheets – and besides there is this concept of the error not being “material”. Fellow had a good Daddy who’s connections got him the top job in a Federal “banking” Agency.

      • WilliamOckham says:

        I was giving them every benefit of the doubt. They really do not deserve it. I would love to see how many of those 500 foreclosures were really honest. If you are behind on your payments, that does not give me (or MERS) the right to foreclose on you.

  18. ottogrendel says:

    “Statistical analysis using a sufficiently large database doesn’t work when the outcome is predetermined.”

    It can for institutions where Faith and Power converge, in the same way that a course on comparative religions at a Baptist university can demonstrate the inescapable conclusion that Christianity is the one true path.

  19. Gabriele says:

    I know it is not popular to bring up Hitler, but there are some stubborn facts.
    Hitler came to power because he was financed by powerful corporations. Many of them are still in existence and still enormously wealthy. And these corporations bought the politicians they found useful.
    Hitler abolished the labor unions.
    Our American politicians are bought and sold by corporations.
    Our politicians are in the process of abolishing the labor unions.
    Our politicians would love to shred what’s left of our social safety net.
    I would love to be able to ignore the similarities, but I find it impossible.

    Our government does not listen to the people. I have lost all hope.

    • ottogrendel says:

      “Lost all hope’?!? What, you’re going to let some unoriginal Fascist shits get the best of you? :)
      There is more under the sun than “leaders.” Don’t let those bastards get you down.

      • Gabriele says:

        Thank you so much. I realize where I made my mistake. I was born in Germany in 1947. My family told me that from the time I was 5 I always said that I would spend the rest of my life in America. I came here in 1967, and have been a citizen for many years. I idolized America, I believed that nothing like the horrible things that happened in Germany could ever happen here. I was aware, at least after having lived here for some time, that not all was always well in America.
        My mistake was that I thought we had arrived at a time when we were a civilized country, when we had a middle class that was doing well, that we had rights that had been established for so many years that nobody would even dream of taking them away. I’m not really sure how I could have been so naive.
        We will always have to fight for our freedom and for our rights, no matter which country we live in.
        I’m off to find my torch and my pitchfork. See you on the battlefield!

        • ottogrendel says:

          How coincidental. I lived in Germany for three years and have idolized it since, especially as the passage of time makes it seem more romantic. I miss it on a weekly basis. I felt at home there.

          Most of us, I suspect, want to believe the best about our situation and our future, even if that means being a little blind, because it beats being spooked by boogeymen at every turn or walking around in a nihilistic funk with a sandwich board that reads, “The End Is Near.” But in exchange for the warm fuzzies of that positive outlook we often pay the price of the pain that results when the scales fall from our eyes. And when it happens when you should have known better and still get burned, realizing you might have seen it coming usually makes it hurt more. But what are you going to do, get all scared and defensive? At least with all the shit going on we can’t complain about being bored.

          Hope they are easy to find. :)

  20. msmolly says:

    Waitaminnit!

    repossessions of borrowers’ homes who were not significantly behind on their payments.

    Aren’t people like Grodensky, Marconi and Rowles among those borrowers who were not significantly behind on their payments??? Since they paid cash or didn’t own the home or were protected while in the service of their country?

  21. Bluetoe2 says:

    OT, if anyone needs a good laugh jump over to HP and play with the trolls. It’s like shooting fish in a barrel. They are a barrel of monkeys.

  22. workingclass says:

    The Fed is a crime syndicate. This will finally be demonstrated to most people’s satisfaction when it is reported that all the gold is gone.

    • captjjyossarian says:

      Seriously! I don’t see how these folks are any different than the mafia.

      They are all above the law which they ignore/bypass/change when it becomes incovenient.

      When corruption got this bad in Argentina, they ended up having to completely replace their Supreme Court in order to have any hope of recovery.

  23. pappy says:

    If you have bought a home ,the Question is; will you ever own it. Hell, the banks probably they do not even know where the mortgage is at.