The federal government's main regulator of home loans is objecting to mortgage-related bills in California and says they could end up increasing lending costs and harming the housing market.And who would this main regulator's point person be? Alfred M. Pollard. He is General Council to the Federal Housing Finance Agency, the organization now in charge of Fannie Mae, Freddie Mac and making sure, in his own words before Congress, that people are foreclosed on efficiently.
Pollard testified before US House Committee on Oversight and Government Reform back in March, laying out the reasoning behind his agency's lack of interest in keeping people in their homes when, instead, they could be being foreclosed on. Efficiently.
It would be very valuable for states and localities to pause in their passage of rules that may create impediments to smooth foreclosures... and the movement to efficient and professionally-undertaken foreclosures.Now he's peddling his wares in Sacramento, doing his damnedest to continue to allow California banks to evict your grandmother (and your aunt, and your neighbor, and the sonuvabitch who lives a few blocks away that just got laid off -- yeah, him too).
A week ago Mr. Pollard wrote a letter to the California Joint Senate and Assembly Committee considering Attorney General Kamala Harris' Homeowner Bill of Rights, informing lawmakers what a terrible idea it would be.
... Pollard said ...His reasoning makes sense -- to a bureaucrat with ice running through their veins.
the bills, if signed into law, would encourage borrowers to sue lenders.
"Increasing legal risks for lenders and investors - where existing remedies exist and where new language creates incentives for litigation - ultimately creates harm for all homeowners," he wrote.
He particularly objected to a bill intended to address "robo-signing," a practice that was targeted in the national bank settlement... the wording is so vague that the legislation could end up penalizing lenders even for unintentional errors or omissions...
Pollard also objected to a bill seeking to protect tenants from being forced out of their rental homes by foreclosures...
What he fails to mention in pages and pages of testimony but which has been documented so many times that you'd think Borneo's hunter-gatherers would know by now (e.g., in this diary from a few days ago) is the incredible abuse the banks subject their "customers" to; their lies, their cheating, and the devastation that millions of now former homeowners have incurred because of banks' perfidy.
He talks about the time it takes for a bank to complete a foreclosure (1). He never talks about the fact that many of the foreclosures are fraudulent in the first place.
He talks about the costs to banks, future borrowers and taxpayers if foreclosures are delayed (2). He never mentions the human and societal costs of throwing families out onto the street.
He talks of the foreclosure process as if it is something banks do only as a last resort (3). He never mentions the banks' all too common practice of foreclosing on homeowners while they are still in the process of negotiating loan modifications. In fact he even makes the astounding counterclaim that
Throughout the process, homeowners are protected against improper actions by lienholders...Mr Pollard is apparently a learned man, being a Professorial Lecturer at Georgetown University and the author of a two volume text on banking law. Yet as far as I can tell he has absolutely no clue as to what banks really do. Has he ever sat and listened to some of the horror stories foreclosure victims have told?
...should a borrower be treated improperly, the law has always provided protection for them for fraud or deceptive practices.
Fortunately, both California's Attorney General Harris and the Chair of the Committee, Senator Noreen Evans, have called him on his bullshit.
"It's the same old tired excuses we've been hearing from the large lenders for years. They want to continue their abusive practices as always," Evans said in a telephone interview. "The whole idea that shutting down abusive practices by servicers and lenders is going to cause them to pull out of the housing market or cause them to raise prices is a red herring. It's more of 'the sky is falling.'"Unfortunately, there are other members of the committee and members of the Legislature who could easily be influenced by his letter, especially ConservaDems who get plenty of contributions from banks and are looking for any excuse not to vote in their constituents' interest but in the interest of their real masters.
We can only hope that three other Democrats on this six member joint committee also see through the cow crap being emitted by Mr. Pollard, ignore him, and vote out strong versions of the bills constituting the Homeowner's Bill of Rights. (I'm not sure when the committee is voting, but it should be soon. Check footnote (4) for the list of committee members).
Once it is out of committee we have to hope that twenty one Democrats in the Senate and forty one in the Assembly have enough integrity to pass the legislation, because you can be sure no Republicans will vote for any legislation that would regulate business practices, no matter how despicable.
But back to Mr. Pollard. You might reasonably ask, if Mr. Pollard is an employee of the executive branch, overseen ultimately by the President, why on Earth would he be spouting this nonsense?
It turns out that's all is not quite as it seems. He is indeed one of the key senior staff of the Federal Housing Finance Agency. But the head of the agency, the acting director, is Edward DeMarco. DeMarco has been at the Agency as interrim director since 2008, a Bush appointee to a lower position who stepped up into the job. In 2010, President Obama nominated Joseph Smith to take DeMarco's place, but as the Senate has refused to confirm him DeMarco has stayed on the job. (This despite claims by some that the President has the ability to replace him, or make a recess appointment, but chooses not to.)
The single largest obstacle to meaningful economic recovery is a man who most Americans have probably never heard of, Edward J. DeMarco...It is not surprising that such a person has retained as his General Counsel and apparent hatchet man someone who appears to have a similar philosophy, to wit: Your grandmother who can't afford her mortage any longer because of bank fraud, losing her job or medical expenses -- bad, your grandmother's bank which regularly practices fraud and customer deception -- good.
DeMarco steadfastly refuses to allow Fannie and Freddie to help distressed homeowners by writing off principal balances on their mortgages...
"He is standing in the way," Rep. Jerrold Nadler, the New York Democrat, told me on Thursday. "He is single-handedly saying that he's opposed to any write-downs because all he cares about is the fiscal solvency of Fannie and Freddie..."
Rep. Elijah E. Cummings, the Maryland Democrat... wrote
"It appears that your refusal to follow Congress' direction and allow principal reduction programs is based more on ideology and the fear of political backlash than on a straightforward analysis of the interests of American taxpayers."
I just wish he's stay the hell out of California, in person and by mail.
These are all taken from Pollard's testimony before Congress.
In non-judicial foreclosure states, the actual time period from foreclosure referral to foreclosure sale... averages nationally somewhere over 250 days; in judicial foreclosure states, the time period is closer to 350 days.
Simply permitting homeowners to stay in their homes for five or six hundred days or longer while not paying their mortgages, costs neighborhoods, costs lenders and, ultimately, costs taxpayers and future borrowers...(3)
Many state laws that stretch out the period for legitimate foreclosures -- after every effort is made to avoid foreclosure and to keep homeowners in their homes -- result in no added benefit for the homeowner and produce harm to the housing finance system and to neighborhoods.
once a bona fide and robust effort is made to avoid foreclosure, then foreclosure must be undertaken and undertaken as provided by law.(4)
Give them a call!