Senate Hearing on Foreclosure Mess Goes Badly for Banks

[Joanne98]

It’s become conventional wisdom to denounce Congressmen as know-nothings who routinely harass businessmen by hauling them before investigations and asking them uninformed questions.

Tuesday, we saw a refreshing and badly needed contrast to that stereotype in the form of a comparatively short (less than three hour) hearing by the Senate Banking Committee on the foreclosure/securitization crisis. The senators were informed, engaged, and well versed in most of the issues. The rushed timetable also helped, for instead of having the witnesses read their prepared testimony, each had to give a shorter summary, which gave the hearings a sense of urgency and meant most of the hearing time was spent on questions from the committee members.

What was striking was the contrast between the representatives of the banking industry, namely Barbara Desoer of Bank of America, David Lowman of Chase, and R.K. Arnold of MERS, versus the critics, who were Tom Miller, the Iowa attorney general, Adam Levitin, Georgetown law professor, and Diane E. Thompson of the National Consumer Law Center.

I strongly recommend you watch the hearings, they were very instructive and even entertaining at points (several Senators gave long form reports of how badly their constituents were being treated by banks). Even Richard Shelby had his moments. Shelby used to be in the title insurance business and roughed up R.K. Arnold, who looked like a rabbit in the headlights. Or you can read the liveblogs at FireDogLake by David Dayen and emptywheel

The financial services industry members offered not merely tired bromides, but repeated flat out lies: we always try to save borrowers; we don’t foreclose on people who aren’t delinquent; we don’t make money from foreclosing (no joke, the Chase guy said that); we never consider out second liens in our foreclosure decisions (huh? only true on a case by case basis, utter bunk at the institutional level); we don’t have any conflicts (double huh, every business has to make tradeoffs); yes, we make mistakes, but we correct them as soon as we learn about them (yeah, right). And this palaver did elicit reactions. Early on, when Lowman claimed that Chase was committed to working with homeowners, he was called a lair by a member of the audience from the audience. The session had to be halted while the offending truth-teller was removed. And the other witnesses often felt compelled to take the floor after a particularly egregious bank remark, as Levitin did on the claim that banks don’t make money from foreclosing, and offered evidence to the contrary.

Some highlights of the session:

http://www.nakedcapitalism.com/2010/11/senate-hearing-on-foreclosure-mess-goes-badly-for-banks.html

[xchrom]

1. those Thieves try to make themselves sound like Saints.

they committed CRIMES!

[northernlights]

2. first sentence lost me....

"It’s become conventional wisdom to denounce Congressmen as know-nothings who routinely harass businessmen by hauling them before investigations and asking them uninformed questions."

My conventional wisdom is that Congressmen publically rake the offenders over the coals, and then give them a slap on the wrist fine so small that it's written off as "appeasing little dirt under our feet as a cost of doing business" .. And then privately they all get together for drinks and a good laugh at us afterwards.

[dixiegrrrrl]

3. I agree. Remember the Attorney General hearings?

Remember the failure to follow up on rove ignoring the subpoenas?
No contempt of Congress action at all?
remember the fact that the Notarization bill was rushed through BOTH houses on voice vote, no record kept of votes?

we might could nominate the committees for an Acting award, but until I see positive ACTION ,
every single "representative" has to earn my trust, several times over.

[xchrom]

5. indeed -- people ought to be -- have a right to beangry at the people who steered the economy

off of a cliff and the people who we elect to protect and defend us and then didn't/don't.

[chill_wind]

4. I listened to much (not all) of it, but never once did I hear

the words FRAUD or THEFT (much less criminal). I did hear LIAR though, and all hell broke out under threat of arrest.