BrainiYak

Are you also in this boat?

Washington Post columnist Dana Milbank told a personal tale today that is illustrative of much of what’s wrong with our plutocrat-run country:

Turns out Citibank, which had been collecting hundreds of dollars a month from us to pay the insurer, hadn’t made the payments. It was, I later learned, one of the usual tricks mortgage servicers use to squeeze more cash out of their customers.

About a month later, I learned of another trick: Citibank informed us that it was increasing our monthly payment by nearly $300.

Along the way, a simple refi became a months-long odyssey: rates misquoted, interest charged on a phantom account, legal documents issued in wrong names, a mortgage officer who disappeared for days at a time . . . a bounced check from Citibank’s own title company, and the freezing of our bank accounts.

[C]onsumer advocates tell me these are typical of the screw-ups by the big banks that service home mortgages. And these errors – accidental or otherwise – are driving large numbers of people into default and foreclosure when it otherwise would not have happened.

© 2011 Dana Milbank, Behind the foreclosure crisis, big banks’ reign of error, Washington Post (06 March 2011) (paragraph split)

This pattern of deliberate deception works because there is no countervailing socioeconomic force

For more than half a century, I have seen an erosion of business integrity that today, in sum, is rather astonishing.

Today, integrity clearly gone, the financial sector gets away with profit-filled “fraud masked as incompetence” tactics because the socioeconomic power balance in this country is so out of whack.

Legal recourse for ordinary people does not work because it (a) is much too expensive, (b) too time-consuming, and (c) most statutory and case law favors the powerful entities that bought the minions who write, enforce, and interpret them.

Despite the inferentially fraudulent intent of Citibank’s (industry-emulating) treatment of Milbank’s account, criminal intent would be impossible to prove, given the way the courts define fraud.  Financial institutions’ defense would predictably be, “Oh, we make some mistakes.  We don’t know why they all were slanted to profit us.  You know how hard it is to get good help today.”

There is no countervailing force to keep large-scale plutocratic marauders in line:

The nascent Consumer Financial Protection Bureau . . . could rein in these abuses — which explains why the banks, in concert with House Republicans, have been working to strip funding and responsibility from the new agency.

© 2011 Dana Milbank, Behind the foreclosure crisis, big banks’ reign of error, Washington Post (06 March 2011)

Tagged: banking, Behind the foreclosure crisis, Citibank, Consumer Financial Protection Bureau, Dana Milbank, financial, financial sector, mortgage, plutocrats, refi, refinance