Matt Taibbi summed up 2013 before the year was even half over with his brilliant story “Everything Is Rigged: The Biggest Price-Fixing Scandal Ever“:
“Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.”
And he’s exactly right–everything is rigged. Those aren’t empty words, either. To a large degree, a lot of the year’s major (and some not-so-major) stories were about the extent to which everything is rigged.
The rigging is of course further exacerbated and certainly enabled by the NSA spying that Edward Snowden and Glenn Greenwald brought to the forefront of the American consciousness. We have a Bigger Brother than Orwell ever imagined (or maybe Big Brother just grew up a lot in the 29 years since Orwell’s prophetic date) as seen on the streets of Seattle, for example:
With all that in mind, here are some big stories from the crazy mix of foreclosures, fiascos, and fraud that was 2013:
Chase has the dubious honor of being subjected to the largest monetary settlement ever with the government. But of course since the theme of the year is the rigged game, that settlement is but a farce, as Salon’s David Dayen pointed out:
“Meanwhile, almost all of the deal, save a $2 billion penalty to the U.S. Attorney’s Office in Sacramento to settle a civil lawsuit, is tax deductible as a business expense. Assuming a 38 percent rate for deductions (as JPMorgan does) on $7 billion in business expenses, this knocks another $2.66 billion off the real cost to JPMorgan Chase. A ballyhooed $13 billion settlement winds up being closer to $2.74 billion. That’s less than what BP or GlaxoSmithKline paid in their Justice Department settlements.“
And of course, The Daily Show did an excellent breakdown of that and a few of the other settlements that prevented the big boys from going to jail and essentially making crime and fraud simply a cost of doing business. You can see the Daily Show video here.
2. Glaski v. Bank of America
A big breakthrough for homeowners fighting foreclosure, Glaski means the following, according to Sidley Austin LLP:
“However, Glaski v. Bank of America, National Association, et al., in which an Appeals Court found that borrowers have standing to challenge void assignments of their loans, even if they were not a party to or a beneficiary of the assignment, stands out as a particularly significant California decision in 2013 affecting real estate contracts.”
And let’s not forget that this decision was threatening enough to the banksters that they wanted to have it de-published once it had been published. Thankfully, and counter to the overall theme of 2013, the decision remains published and ought to be precedent for courts in California. However, in keeping with the 2013 theme, California courts have so far declined to use it as precedent:
“Dahnken joined a growing line of California federal trial courts that have rejected the Glaski court’s analysis. For instance, the United States District Court for the Southern District of California expressly refused to follow Glaski in Diunugala v. JP Morgan Chase. There, after stating that it found “the reasoning in the [pre-Glaski] case law to be more persuasive than that in Glaski,” the court held that the plaintiff borrower lacked standing to challenge the defendants’ compliance with the terms of a PSA.
Likewise, after noting that “no courts have yet followed Glaski and Glaski is in a clear minority on the issue,” the United States District Court for the Eastern District of California in Newman v. Bank of New York Mellon decided that “[u]ntil either the California Supreme Court, the Ninth Circuit, or other appellate courts follow Glaski, this Court will continue to follow the majority rule.” See also Subramani v. Wells Fargo (declining to follow Glaski in favor of the majority rule). In short, Glaski is meeting resistance in California’s federal trial courts.”
Would courts be ignoring precedent unless everything were rigged? The question answers itself.
3. Cyprus Bail-in
If everything were not rigged, would banks be able to steal their depositors’ money in order to make the banks whole? Again, the question answers itself. The Forbes writer at the link above sums it up well:
“The difference with the ‘bail-in’ is that the order of creditor seniority is changed. In the end, it amounts to the cronies (other banks and government) and non-cronies. The cronies get 100% or more; the non-cronies, including non-interest-bearing depositors who should be super-senior, get a kick in the guts instead.”
4. Pope Francis statements
So nice to finally have a prominent, apolitical public figure that will actually acknowledge the truth of what is really going on with the economy and that the media will actually cover. Pope Francis certainly knows everything is rigged:
“’Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world…This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.'”
5. US Bank PDF
Judges have had a field day denying homeowners due process of law throughout our current foreclosure crisis, and one of the big obstacles they have put in front of homeowners is the idea that the homeowners aren’t a party to the securitization of the promissory notes that the homeowners signed at closing. Jeff Barnes and company at Foreclosure Defense Nationwide came across an admission from US Bank in that company’s own literature stating that homeowner/borrowers are, in fact, a party to the securitization. Truth be told, homeowner/borrowers are the most important party to the securitization because without them, there’d be nothing to securitize. Quote from the US Bank document as documented by Foreclosure Defense Nationwide:
“We have been provided with a copy of U.S. Bank Global Corporate Trust Services’ “Role of the Corporate Trustee” brochure which makes certain incredible admissions, several of which squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower ‘is not a party to’ the securitization and is thus not entitled to discovery or challenges to the mortgage loan transfer process…The first heading of the brochure is styled “Distinct Party Roles”. The first sentence of this heading states: ‘Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee, each with their own distinct roles, responsibilities and limitations.’”
6. Bank of America gift cards
How much would you require to sell out your fellow debt slaves and see them put out on the street? Apparently some Bank of America employees will do it for the price of a gift card to Target or Bed Bath and Beyond. Anybody still not getting that everything is rigged? Here’s how we put it here at Liberty Road Media:
“From the declaration under penalty of perjury of former BoA ‘senior collector’ Simone Gordon we learn that it was the policy of Bank of America not just to tell borrowers that BoA hadn’t received borrowers’ modification documents when they had in fact received them, but also to put the accounts of those same borrowers into foreclosure status. And the employees that met certain foreclosure status quotas were rewarded with cash bonuses and gift cards to stores like Bed Bath and Beyond and Target.”
7. “Paper terrorism”
This is where the fact that everything is rigged gets really perverse, because it’s apparently not enough for these people to rig everything. No, they have to invent pejorative, inflammatory terms to apply to us when we do exactly what they do. As in the case of Barbara Bratton, alleged “paper terrorist.” Supposedly she filed false documents in the land records of San Bernardino County, California, just like she believed her “lender” had done. When they do it, it’s just business. Or it’s just “robo-signing.” When she does it, it’s “paper terrorism” and she gets thrown in jail. Unbelievable. Again from Liberty Road Media:
“And that’s the problem–no judge or district attorney seems willing to label the banks as ‘terrorists’ even when the banks engage in what those same judges or district attorneys would readily call ‘paper terrorism’ if a private citizen did it. It’s a distinction without a difference, i.e. the same behavior is considered A-OK if banks do it but it’s punishable by solitary confinement if a private citizen does it.”
8. George Babcock v. Merrill Sherman and MERS
How’s this for everything is rigged–one of the premier anti-foreclosure attorneys in the country has his cases consolidated and overseen by a court-appointed Special Master. And turns out the Special Master is a former banker whose bank was a member of MERS, one of the main parties in many (if not nearly all) the cases brought by our premier anti-foreclosure attorney. Of course we’re talking about attorney George Babcock and Special Master Merrill Sherman, which was covered at Babcock’s site, providing the necessary documentation of Sherman’s connection to MERS:
“Attorney Babcock has recently discovered that Special Master Merrill Sherman, the Federal Special Master, appointed with the task of managing the In re: Federal Mortgage Foreclosure docket, has previously sat on, and currently sits on the board of 2 different banks that are MERS members. She likewise served as the Chief Executive Officer of a Bank that was at that time and is currently a MERS member.
Special Master Merrill Sherman currently sits on the board of Brookline Bancorp, Inc.. Brookline Bank is registered as a MERS member and works directly with MERS. Coincidentally, it is estimated that 65% of the cases that are under the watch and direction of Special Master Sherman involve MERS as a defendant. Please see below for details on Special Master Sherman’s relationship with Brookline Bancorp and Bank RI and the status of both Banks as MERS members.
‘It appears that MERS runs the mortgage industry in Rhode Island’ said Attorney Babcock. However, despite MERS involvement in the state’s mortgage industry, Attorney Babcock and his team continue to press on, ‘We have managed to save hundreds of homes, and aid thousands of families without the help of any government or state agency, despite what appears to be a major conflict of interest between MERS and the Special Master.’ Click here to watch his video blog reaction to Sherman.”
9. “National Mortgage Data Repository”
And speaking of MERS–itself a great indication that everything is rigged–this year saw the proposal of the very MERS-like “National Mortgage Data Repository” which would be MERS but with the blessing of the federal government. Here was our take on it back in July (as always, David Dayen did an excellent job of covering the details):
“But it also shows that, by God, they want to make as many Americans homeless as possible, and they want to be able to do it on their say-so. That’s why the new proposed registry will still be private–again, just like MERS. The banks’ sole interest is power and control, and they figure it’s time to make it all nice ‘n’ legal with a real-life, honest-to-goodness law (usually anathema to them). After all, isn’t that what everybody complained about with MERS, that there was never any law authorizing MERS? That MERS was just created and rammed through the property records without any legislature ever ratifying it beforehand?
Oppose this joke of a ‘bill’ with all your might. This is a proposal to legalize paper terrorism–for banks, natch, and not for you and me. The sponsor is Jeb Hensarling of Texas (how sweet for the banks if a Texas representative got this done since MERS is currently being challenged hot and heavy in Texas). This new MERS is part of a larger bill called the Protecting American Taxpayers and Homeowners Act (PATH). Shut it down!”
10. Nueces County anti-MERS decision
Just because we get some good news every now and then doesn’t mean everything isn’t rigged. Some of the best news came when Judge Nelva Gonzalez Ramos in Nueces County, Texas ruled that MERS is not a beneficiary (despite deeds of trust saying that MERS is a beneficiary) and that MERS and the banks intended to cause harm to the recording system of Texas counties. Importantly, Ramos herself said these very obvious things–she was not quoting the Plaintiffs when she said them. Finally some sanity in Texas and the 5th Circuit. From the link above (which got the most Facebook shares of any post here this year), here is just a taste of Ramos’ great denial of the banks’ motion to dismiss:
“1. ‘MERS does not, however, hold any beneficial interest in the deeds of trust, and it is not a beneficiary of the deeds of trust. It is merely an agent or nominee of the beneficiary.’ (p. 14)”
11. Independent Foreclosure Review abruptly stopped, Warren grills banksters
Just about a year ago, in a move to try to cover the fact that everything is rigged, the “Independent Foreclosure Review” was abruptly shut down and it was decided that all affected homeowners would receive a paltry sum to “settle” the banks’ wrongdoing that they neither admitted nor denied (which is the same as an admission). Elizabeth Warren got some great and damning testimony regarding the farce that was the Independent Foreclosure Review (our take on all that here):
“Sen. Warren: All right, so let me ask it from the other point of view. You now have evidence in your files of illegal activity, I take it, for some of these banks. I get that from the evidence you’ve released about the charts, who’s going to get paid what, so if someone believes that they have been illegally foreclosed against, will they still have a right under this settlement to bring a lawsuit against the bank?
Mr. Stipano, OCC: Yes.
Sen. Warren: All right. Now, if a family wants to bring a lawsuit, you’re both lawyers, would it be helpful, if you’re going against one of these big banks, would it be helpful for these families to have the information about their case that’s in your files. Mr. Ashton?
Mr. Ashton, Fed: It would be helpful, obviously, to have information related to the injury, yes it would.
Sen. Warren: Okay. So, do you plan to give the families this information? That is, those families that have been victims of illegal foreclosures, will you be giving them the information that’s in your possession about how the banks illegally foreclosed against them? Mr. Ashton?
Mr. Ashton, Fed: I think that’s a decision that we’re still considering. We haven’t made a final decision yet.
Sen. Warren: So you have made a decision to protect the banks, but not a decision to tell the families who were illegally foreclosed against?
Mr. Ashton, Fed: We haven’t made a decision about what information we would provide to individuals, that’s true, yes.
Sen. Warren: Mr. Stipano?
Mr. Stipano, OCC: Same position.
Sen. Warren: So, I just want to make sure I get this straight. Families get pennies on the dollar in this settlement for having been the victims of illegal activities or mistakes in the bank’s activities. You let the banks – and you now know individual cases where the banks violated the law, and you’re not going to tell the homeowners, or at least it’s not clear yet whether or not you’re going to do that?”
Happy New Year, everybody! Liberty Road Media debuted in 2013 and had a great year–thanks for all your support! Here’s to 2014 and beyond…let’s un-rig the system this year!