"The Prosperity Gospel": Pastors Took Bribes From Mortgage Originators — $350 per subprime mortgage

And probably people “of the cloth” from all denominations.

We are a nation of faith. Jesus angrily drove the money lenders out of the temple. How can we stand by and allow the borrowers to be driven out of their homes?

The fact is most of these victims were hunted down like a foxhunt, with strangers knocking on doors, experts giving them quiet assurance of how wonderful their house was and how much it was worth, how wonderful it was that the bank would approve such generous terms (because they weren’t playing with their own money), and with undisclosed yield spread premiums of unimaginable size sometimes in multiples of the mortgage amount itself.

I have already spoken about how in Florida they hired and got licenses for 10,000 mortgage brokers to act as bird dog originators — all 10,000 of them were convicted felons, mostly for economic crimes, many of whom just got out of jail. Translation: they needed people who would be willing to lie in order to get borrowers to sign. Yet that was not enough. “One theme emerging from these suits is how banks teamed up with pastors to win over new customers for subprime loans.”

It is probably not politically correct and even offensive to say that American society has one faith in common: money. Belief in money and in particular that almighty dollar is something that all of us seem to converge on from disparate facets of life, class levels and religious faith. The protestant ethic on which our country supposedly rests, is all but dead. People who conduct their lives according to the principles of hard work, building a foundation of quality and prospering in the end usually are derided as old-fashioned or even naive in “today’s marketplace.”

If you really want to know why this nonsensical mortgage meltdown could occur, look no further. For all the cries of “shame” and demands for justice, our society, as a whole is doing virtually nothing about making sure it never happens again and in fact has already launched the next round of speculation based upon a government bailout of the losses when they occur.

It no longer matters if you work hard. It doesn’t matter if you are honest. It doesn’t even matter if what you do is successful. You will be paid a king’s ransom as long as you are playing “the game.” When the cards come tumbling down, it doesn’t matter — you are rich beyond your wildest dreams and even if you have nothing left to do, you don’t need to work anyway. The fact that tens of millions of people can’t work, are NOT rich, and have no income or safety net is of no concern. It isn’t that these people all lack conscience. The inconvenient truth is that they are following the rules of our society.

One recurring theme coming up in many lawsuits is “business Model” adopted by the Top Dogs (Bank of America, Countrywide, Wells Fargo etc.) who simply repeated the multilevel marketing schemes that proliferate across our great land in search of another unearned dollar.

I have already spoken about how in Florida they hired and got licenses for 10,000 mortgage brokers to act as bird dog originators — all 10,000 of them were convicted felons, mostly for economic crimes, many of whom just got out of jail. Translation: they needed people who would be willing to lie in order to get borrowers to sign. Yet that was not enough. “One theme emerging from these suits is how banks teamed up with pastors to win over new customers for subprime loans.”

Just look at how much trouble we are having distributing flu shots and getting people to accept the flu shot. Channels of every type and place imaginable are hawking the shots (which by the way I think is a good thing, and yes, I got one) at tens of thousands of outlets and delivery points. MERS says it has 60+ million mortgage transactions in its data records. How do you reach 60 million homeowners?

Well it turns out to be easy in country where the overwhelming majority of the populace are people of “faith.”

I invite you all to take a look at “Did Christianity Cause the Crash?” by Hanna Rosin published in the current issue of The Atlantic, December 2009 at page 39.

A Case in Point: Beth Jacobson, witness for the prosecution in City of Baltimore vs. Wells Fargo. Just the facts Ma’am. Virtually none of the mortgage “specialists” any of us spoke to over the phone had any education, training or experience in mortgages, finance or even bookkeeping. They were trained on how to look like they were experts. They would lie to you eye to eye. And they were rewarded. “Sometimes the bank would send a Hummer limo to pick up Jacobson for a celebration, she says. She’d arrive at a bar and find all her co-workers drunk and her boss “doing body shots off a waitress.”

Like any “good idea” (without any sens of “enough”) the marketing model of establishing sales channels through houses of worship was irresistible. After all, congregants were in a vulnerable mood when they went to church, they were easily pacified by their faith in their clergyman, and any “Wealth Now” seminar assumes an aura of both credibility at the least and mandate from God at most. And the Pastor, the Church or some “program” of the church would get a $350 “donation.” It didn’t take long for those in the congregation who were prospecting for the next person they could fool to get the point — bring subprime mortgage candidates to the bank and get paid $350 per mortgage. So if they did 10 mortgages per week, they earned themselves $3500 per week.

The results are well known, but not particularly flushed out. People who are living lives of quiet desperation under a mountain of debt they would never escape suddenly saw the jackpot. And so while the mortgage meltdown was in its hay day their income jumped from what had been $35,000 per year to an av erage of $350,000 per year. And after 2-3 years they were convinced that they now were big earners. When the crash occurred, they were slow to realize or believe that they were no six figure earners and they never were. They were low five figure earners, and those jobs were no longer available so now they would need unemployment or other public assistance.

What bothers me is not that people of the cloth are like anyone else — subject to temptation and possibly who got there because of the protection it provides for all sorts of deviants or corruption. N0, what bothers me is that even as mainstream media publishes these stories, the underlying assumption is that the mortgage mess is still MOSTLY the fault of consumers whose eyes were too big for their stomachs.

The fact is most of these victims were hunted down like a foxhunt, with strangers knocking on doors, experts giving them quiet assurance of how wonderful their house was and how much it was worth, how wonderful it was that the bank would approve such generous terms (because they weren’t playing with their own money), and with undisclosed yield spread premiums of unimaginable size sometimes in multiples of the mortgage amount itself. And yet the victims continue to be portrayed as gamers who lost. That bothers me because until we get all the facts out on the table, there never be a solution to this mess, this confabulation.

Until there is real understanding of the facts, we will continue to protect the large banks that are “too big to fail” and continue to ignore the plight of the common man and woman. As long as we persist, we will not rebuild the middle class. Without a stable prospering middle class, we are nothing. That’s the real irony. The wealth needs to be in the middle class to have society that survives itself. Legally I have no doubt that the wealth is there but it has not been claimed. Practically, until Judges and lawyers and homeowners “get it” they will continue to blame the “borrower” and let the pretender lender do body shots “off the waitress.”

Tags: Apostle Garay, bailout, Bank of America, borrower, countrywide, disclosure, Florida, foreclosure defense, foreclosure offense, Jacobson, mortgage brokers, mortgage meltdown, securitization, subprime loans, The Atlantic
Posted in bubble, Corruption, Eviction, securities fraud |