October 1, 2016 – CFPB Complaint

On August 16,2016 I filed a complaint with the Consumer Finance Protection Bureau regarding the deceptive nature of the Loan Modification application process.

America’s Servicing Company responded with a ridiculous (often non-sensical) bullet point style reply that can hardly be considered a response but rather a constructed narrative that continues the deceptive actions documented in this blog.  The representative Desiree Lagerquist called me to discuss it.  In her absurd litany of reasons why they cannot restore my property, Ms. Lagerquist made the comment that I did not provide them with enough detail in the complaint.  Then I pointed out to her that I included an attachment which was a copy of most of the posts in this blog.  I added that this is an extraordinary amount of detail.  This gave her pause and she stumbled.  Then she said something along the lines of “….Oh,…Oh ya…um, we did review that”.  This must be a boiler plate justification… but at any rate, I caught her in a blatant lie.

Their response to my complaint is in this attachment.


MY RESPONSE DATED 10-1-2016

I filed this complaint in order to give the federal government details useful in restoring balance to our market based society. I will not get into a positivistic argument with the bank. Review of the attachment in my original complaint shows that this futile war has already been waged and consumers are not equipped to win this fight. The purpose of documenting the foreclosure process was so that a narrative could be constructed that reveals truths about the infringement on the rights of consumers in our pursuit of prosperity; infringement perpetrated by oligopolistic, unregulated market participants in the financial sector.  This is a case study involving the trespass on the American consumer and the harm done. It shows a progression of events in the first year of a 5 year fight in a documentary style that closely corresponds to objective reality rather than a legalistic, subjective, constructed narrative heavily influenced by corporate bias.

The banks response to my complaint was worded in the typical bank fashion which is to construct a legalistic, positivistic argument that is designed to hold up in a court where the rules have been manipulated by the Oligopolies. My interest in working with the federal government in it’s attempt to bring balance back to society is not motivated by any interest in a legal fight. I’ve already sued the bank and have discovered that homeowners of meager resources have no chance because the private legal industry is also influenced by the income provided by large corporations. My interest as a graduate of one of the best advertising schools in the country is to see balance restored to the market system (i.e. western society). In order to argue for change, it will be necessary to use federal regulation to address deception rather than the courts to remedy a contractual breach.

I can’t argue with bullet points regarding notifications, but through my documentary narrative, I can describe several problems with the loan modification application process. 1) They were deceptive on an on-going basis. 2) I was meticulous in my effort to comply with all of their reasonable requests (and even most of the unreasonable ones). 3) I was diligent in my effort to obtain adequate and accurate information needed to become rational in my decisions on how best to rectify the delinquency. 4) The delinquency was caused by conditions outside of my control. 5) Within 5 months of the first date of the delinquency, I was solvent, capable of resuming payments at their original amount. 6) The effort to deceive caused me harm. 7) I made multiple attempts to get the formula for determining NPV but the bank refused to provide me that information. 8) The NPV formula was necessary so that I could determine how to best spend the cash on had in order to qualify for the loan modification after their exorbitant fees put the full delinquency amount out of my reach.

In short, I struggled and spent hundreds of hours and over four years trying to save my home through the loan modification process and through a lawsuit that cost me over $40,000.00 and forced me into virtual bankruptcy. The bank never intended to help me with a modification because my home had equity. Consumers do not have the resources needed to fight the trespass of large corporations; this is the express purpose of the federal government. I hope that the CFPB and the Federal Trade Commission will make even half the effort that I did in this fight. By using the well developed case law and regulatory rules regarding deception, I know that the power of the middle class and hence, the principle of equality in western society will be preserved. If this does not happen, then we have reverted back to the middle ages where the wealthy aristocracy has ultimate power and the regular people have no opportunity to build prosperity for ourselves and our families.

Merry Christmas from Wall Street

I decided to separate December 2010 out in its own post.  The reason is that each year, there is a flurry of activity created by the banks attorneys.  They wait until the end of the year because many law offices are closed for vacation the last part of December which puts the homeowner at a further dis-advantage as they try diligently to secure a loan modification, or fight off a foreclosure.  In December 2012, the bank accelerated the note.  This year, I got a notice of the HAMP (federal loan modification) denial on December 29th.  Throughout the month, I had been trying to find out their formula used to determine the denial but they gave me the run-around on that question just like the rest of the application process.

December 10, 2010 – DATABASE ENTRY – Main database record (documents received)

December 21, 2010 – DATABASE ENTRY – Main database record (document received)

December 22, 2010 – DATABASE ENTRY – Main database record (Outbound call completed)

  • Rep says that the HAMP denial letter way sent out Monday the 20th and it takes 7-10 business days.  I asked about NPV calculations.  the letter does not include NPV calculations.  Rep is sending an email to npvremediation@wellsfargo.com to ask them to call me regarding the npv calculations.  They also said they needed a P&L for November.  I should also send a revised Financial Worksheet. Here is another official denial for the HAMP program.  The letter is sent out on December 20th when it’s difficult to get legal help if you don’t have it already.  The reason that they gave for my denial was “Negative NPV”.  When I tried to nail down what that actually meant, I got no answers.  I found out that there is a formula but they bank does not disclose what that formula is.  Wikipedia has lots of information on what Net Present Value is and how it’s used.  I don’t know the accuracy of the article but it suggests numerous problems with this method of accounting because it seems to be subjective in its efficacy (would love some comments here from finance professionals).  A year earlier, an assistant secretary of the US  Treasury, Herbert Allison gave written testimony before the House Financial Services Committee.  Here is a copy of the testimony (Link). In the document, I highlighted the testimony (Pgs 6 and 7) that talks about the “standard net present value (NPV) test”, The design of the HAMP program and who it was intended to help, and the transparency requirements that lenders must follow to inform the homeowner of the reason for denial.  In my series of HAMP applications, these rules were not followed (when the documentation throughout this post supports this argument, I’ll point it out).  Notice at the top of Pg. 8 there is acknowledgement that there are multiple implementations of the “Model” and the initial implementation is determined by the bank, not the federal government.

December 24, 2010 – DATABASE ENTRY – Main database record (call completed)

  • Call regarding: Loan Processor changed to Nora Lindsay (803-578-8624 ph; 866-590-8910 fx).  I told rep that I’d send updated documemts January 1 to show income for December. Another Change of my loan processor.  More confusion for CHRISTMAS EVE.  Merry Christmas!

December 28, 2010 – DATABASE ENTRY – Main database record (call completed)

  • Call was regarding documentation to find out if I’d had a chance to fax it in.  I told them I’d send it after the 1st.  Foreclosure date is Feb 1.   I also told the rep that I had not heard from anyone about the NPV. I asked again to have someone from the NPV department to contact me about the HAMP denial and cooresponding NPV calculations.  Rep said that she would send another request for them to contact me and that there was no phone number for that department but then decided to do some research and found a number.  803-396-7529 NPV Mediation.  This goes to show that their representatives handling the loan modification application process had no idea what they were doing, causing major mistakes to be made.  It should be clear in a court that this is a wrongful foreclosure but in state district court, none of it was even considered (from what I could tell, anyways).  I’m not sure if this is my attorney’s fault or the district judge, problems with the market itself, or all of the above.  These are some of the questions I want to get answered if I’m able to locate an expert who will work with me on this case.

December 28, 2010 – DATABASE ENTRY – Main database record (outbound call completed)

  • I called 803-396-7529 and it went voicemail.  There was no department name in the voicemail greeting, just a rep name and it identified the company as Wells Fargo.  I left message asked her to call me about NPV values. (This was a follow up on the previous phone call from the same day.  Was this really a department or just a rep posing as the NPV Mediation department?)

December 29, 2010 – DATABASE ENTRY – Main database record (document received)

  • Received today – HAMP denial letter (link).  According to Herbert Allison of the US Treasury, there was supposed to be a denial code in this document.  The code is not there.  According to the Allison testimony, the banks would be audited by the Federal Reserve to make sure they were using an NPV model that meet the treasury’s NPV specifications.  So if I find out that my bank is not doing that (by failing to provide a denial code) then why is there no way for me to request the Treasury audit the bank?  Also, in a court of law shouldn’t it be considered clear evidence of wrongdoing if the bank does not follow the federal regulations?

December 29, 2010 – DATABASE ENTRY – Main database record (document received)

A Coordinated effort by ASC to Scrap my Application

This post covers May 1st 2010 to November 29th 2010 and documents the loan modification run around, misrepresentations, and sabotage efforts by ASC representatives.  These are entries from my database with links to documents that were scanned and attached.  My comments about the events described in the entries, are highlighted in blue.  On the attachments, I marked up in red where necessary to make it easier to see the relevant information.  (Warning: There’s some pretty shady stuff in here).  Notice the frequency of entries, the amount of documentation sent, phone calls made/received, the level of complexity of the bank’s/investor’s Requests for Information (RFI’s), and the number of bank representatives that I had to keep up with.  It might make your head spin just reading the organized version here.  Actually going through it is much worse.

As you read, Imagine that you are a middle class, homeowner who has never gone through anything like this and believe the bank’s statement that they are trying to help.

May 10, 2010 – DATABASE ENTRY – ASC Debt Collection Department (outbound call completed)

  • Returning call – Moniqe ext. 59073 – Did not Answer – Left message.

May 12, 2010 – DATABASE ENTRY – ASC Debt Collection Department (call completed)

  • Documents needed for Loan Modification – 4506 Form with 2007 & 2008 years filled in. 2) Extension form for 2009.  3) MHA questionaire – Fill out every box including N/A where applicable. 4) February Profit/Loss – make sure 1st through end of month is report period. 5) Updated Budget

June 1, 2010 – DATABASE ENTRY – ASC Debt Collection Department (call completed)

  • left message informing her that a foreclosure process had been started and a sale date was set.  Requested that they send a letter to the law firm to stop the process.

June 2, 2010 – DATABASE ENTRY – ASC Main Database Record (fax sent)

June 4, 2010 – DATABASE ENTRY – ASC Main Database Record (call completed)

  • Scheduled date for approval of loan mod is 6/10/2010.  Could take up to 3 weeks.  There will be a trial offering once the approval goes through.  after 3 payments a final offering will be given.  first year interest is 2% then moves up to 5% by the 5th year and stays fixed for the life of the loan.  If I don’t get an offering by the end of June, I need to call to get them to fill out a foreclosure suspension form that will go to their foreclosure department where they can communicate in real time (messaging) with the law firm to stop foreclosure.

June 17, 2010 – DATABASE ENTRY – ASC loss mitigation department (call completed)

  • spoke with customer service rep.  Foreclosure Sale Date has been moved to Sept. 7th.

June 22, 2010 – DATABASE ENTRY – Main Database Record (documents received)

  • RFI Documentation June 18 – Received Today via fedex.  (At the bottom of page 2, ASC states that “the government guidelines only allow you one opportunity for mortgage payment relief under the Home Affordable Modification Program.”)  I’m willing to bet that the federal guidelines stated no such thing, particularly since, ASC later stated that I could reapply if my income situation changed. (Misrepresentation of fact) 

June 22, 2010 – DATABASE ENTRY – ASC Federal MHA Department (outbound call completed)

  • Left message asking how to respond to Request for information (link) (received June 22nd).  Item 2 requests signed tax returns for all borrowers who are salaried employees.  I notified her that I am the only borrower on the note and I am not a salaried employee.  Asked if she still needed additional copies of my tax return. (The document, Item 2, is confusing because I wasn’t a salaried employee).

June 24, 2010 – DATABASE ENTRY – Main DB Record (Documents mailed out)

  • Response to June 18 RFI (link) (received June 22) (ASC requested a revised 4506T because the other one was incomplete) and 2008 & 2009 Form 1040 – Fedexed today

July 15, 2010 – DATABASE ENTRY – Main DB Record (inbound call completed)

  • Paul – calling to verify information.  Said that my H.A.M (HAMP) reviewer is Derick Alexander.  there is one more process to go bofore they make the decision on whether I can qualify for the program.

August 11, 2010 – DATABASE ENTRY – ASC Loss Mitigation (outbound call completed)

  • “Derick Alexander is my H.A.M (HAMP) processor. Ext. 85596.  Called and left message asking about update on status.”

August 19, 2010 – DATABASE ENTRY – ASC Federal MHA Department (outbound call completed)

  • Tried to leave a message for Maria Negron to call me back but her voicemail was full and the phone system would not let me leave a message. (This makes the process confusing when I cannot get my questions answered)

August 19, 2010 – DATABASE ENTRY – ASC Federal MHA Department (outbound call completed)

  • called customer service, option 3 (Lisa) she “pulled up 106” (don’t know what that means).  Very talkative..sounded like she was stalling.  As of 28th it’s pending final decision before sending it to the investor.  As of the 18th it was suspended waiting for procedural direction for no longer than 7 days.  If I don’t hear anything by August 28th, I should call ASC to request a postponement of the foreclosure sale date. (The ASC rep recommended a second postponement of the foreclosure sale date.)

August 28, 2010 – DATABASE ENTRY – ASC Federal MHA Department (outbound call completed)

  • Requested a foreclosure postponement.  said that it was up to the investor.  Also said that I need to send in updated hardship letter, paystubs and financial worksheet.  This is the only notice I’ve gotten about updating the documents.  I have not received a notice by mail or a phone call requesting documents.  I was told previously by phone, that they had all the documents they needed. (ASC failed to send a notice that documents needed to be updated.  Note that according to the phone rep, ASC allows their investors to determine whether or not a homeowner gets a loan modification! Who is the bank’s customer here?  I thought I was the customer since I pay a significant amount of interest to the bank. (If I had known that an investor had that decision making power, I would never have agreed to the terms of the loan.  Here is a great example of a lack of adequate and accurate information in the market which prevents consumers from making rational decisions).  Also I would argue that the situation is a conflict of interest and banks should not be allowed to pit the investor against the homeowner (consumer).  Democratic society, given the knowledge of such a conflict and given a choice, would not allow this situation to occur.  Also note that in Texas, recent lawsuits have determined that homeowners are not considered consumers under DTPA legislation (which is the only legislation that allows consumers to sue vendors of products and services).  Sounds like a convenient way for a business friendly government to resolve this massive conflict of interest (on paper only), allowing sellers of loan servicing services to avoid any accountability in the market (making Texas attractive to large corporations) and hand out economic growth benefits to big business even if it comes at the high price of chopping off the economic legs of the individual citizen.  What about the economic growth of the family or independent contractor?  I guess, in Texas, we don’t matter to the legislature or the governor’s office).

August 30, 2010 – DATABASE ENTRY – Main database record (documents faxed out)

  • Faxed updated documents today (documents that were requested on August 28)

September 1, 2010 – DATABASE ENTRY – ASC Loss Mitigation (outbound call completed)

  • “Lisa Shemp 480-375-4761 – Lisa was a proccessor on my account with the Investor Team.  Lisa is no longer a processor and referred me to  Jamie Versteeg.” (Here is an example of the bank constantly changing representatives and referring me to other departments.  They also had different titles for representatives that changed throughout the two year process.  Talk about confusing!!!)

September 1, 2010 – DATABASE ENTRY – ASC Loss Mitigation (outbound call completed)

  • Jamie Versteeg – Told me that the Request was made by Wells Fargo to the Attorney’s office on the 31st.  Atty made a note on the account that the loan was not eligible for sale.  She said there were “title issues.” (What are these title issues?  If there were title issues, then was it legal for the bank to continue with the foreclosure proceedings)

September 9, 2010 – DATABASE ENTRY – Main database record (outbound call completed)

  • called in response to their voicemail RFI – The representative did not show that there was any need for additional information.  She did note that I was not qualified for the HAM modification but I was under review for other modification programs.  The first representative transferred me to the line that helps people who have been denied the HAM program.   He said that the HAM program is backed by the federal government and the denial came from them…not the investor.  He said that I would get a letter in the mail from the Treasury department about it.  After I get that letter, I can call back and discuss it with them.  He also said that I was under review for in-house modification programs which are backed by the investor. (One rep tells me that they need more information, but when I call in another rep tells me that is not true.  I’m told that I don’t qualify for the HAMP program.  I’m also told that the federal government denied me, and not the investor.  The rep that I talked to on August 28th told me the investor makes the decision. ( A misrepresentation uncovered by ASC’s own statements)  Since that time, I’ve found out from attorneys, and other banks that the federal government does not make the decision on approval, nor do they dictate the formula used by banks in making the determination (that fact will prove another material lie later on).  At the time I didn’t know that it was a lie.  More confusion!)

September 17, 2010 – DATABASE ENTRY – Main database record (outbound conference call completed)

  • Called 888-995-HOPE and talked to Heather who put me us on this conference call with ASC.  Spoke with main number and was transferred to Loss Mitigation. (This is the number for the homeownership preservation foundation (link).  I called them to get help with the loan modification application process.  They initiated a conference call which uncovered more confusion and reinforces my conclusion that I did qualify for the program but the bank ignored that fact intentionally.  Here are the handwritten notes with markup in red (link).

September 22, 2010 – DATABASE ENTRY – Main database record (outbound call completed)

  • June Marie left me a voicemail to call in.  I called loss mitigation and was told that Ms. Carol Michael was my new processor.  I was told that I was under review for an in house modification and that the processor needed updated financial documents – hardship letter, financial worksheet, PL.  I’ll also send the 2009 schedule E and both rent contracts.  The rep notified me that I could request a foreclosure postponement today so I did.  The rep issued the postponement email (GEM, he called it) to the investor. (Another new processor!  The fact that they moved me into an in house modification review without my knowledge indicates that this was a denial for a modification under the federal program.  This one of more than 20 times I had to request a postponement in order to stop the foreclosure while under review for a modification.  It makes me wonder why the bank doesn’t just put it on hold until the review process is over.  Maybe this is done in order to create and unfair environment in favor of the investor?  During this call, the rep said that I could refax updated documents for re-evaluation if I believed the figures they used were wrong. See the markup on page 2 of the written call notes (link) to see the inaccurate information they used to justify the denial.

September 22, 2010 – DATABASE ENTRY – Main database record (Fax Sent)

  • Sent in a fax (This fax was in response to the representatives document request that I received verbally on September 22nd during the conference call (Here are the documents again) (link).  On the fax cover page (link), I note explicitly that the numbers used were wrong and the supporting documents included in the fax show the proof of my statement.

September 24, 2010 – DATABASE ENTRY – Main database record (Outbound call completed)

  • called to follow up on RFI to find out numbers used
  • They put in a request for the original MHA processor to call me.  Her name is Debbie Jay.  She plugged in the numbers for the MHA application and can answer my questions.  They also put in a request to have the MHA application resubmitted using the 9-22 documents.  I’m supposed to call back in 5 days (29th). to find out if the MHA application will be re-processed and also find out if the sale date postponement will go through.  (Notice that the onus is on me to make sure that the home is not sold at auction.  This means that the bank takes no responsibility to notify the homeowner that the modification review is still being conducted or that a decision has been made.  This adds to a preponderance of evidence that the bank is not acting in good faith even though it represents to the homeowner otherwise.  This is more mis-representation.  During this call I put in a request for my processor Debbie Jay to call me to answer questions that only she could answer.

September 24, 2010 – DATABASE ENTRY – Main database record (Fax Sent)

  • Sent Fax – Tenant Leases

September 29, 2010 – DATABASE ENTRY – Main database record (Conference call completed)

  • Called Brice Vander Linden & ASC in the CCCS office with Debrah Watts
  • The gave me the run around regarding the foreclosure sale date postponement request.  Turns out the request was cancelled by the same person that submited it. (See The Attached Call Notes (link).  These notes document an ASC employee rescinding a request to have the foreclosure sale date postponed.  This is after ASC represented to me that they would make the request on my behalf during the September 24th phone call.)

October 4, 2010 – DATABASE ENTRY – Main database record (Outbound call completed)

  • called for status update
  • Rep verified the sale date is postponed till November 2.

October 11, 2010 – DATABASE ENTRY – Main database record (Outbound call completed)

  • I called to follow up on courtesy call on Oct 8.  It was a collections call.  For the loan modification review, they don’t need any other information from me.  I asked to speak with my processor and the rep told me that she did not have contact information for the processor but would send her an email asking her to call me back.

October 12, 2010 – DATABASE ENTRY – Main database record (Outbound call completed)

October 21, 2010 – DATABASE ENTRY – Main database record (Inbound call completed)

  • Rep on behalf of Carroll Michael.  They wanted clarification on the lease agreements and advised that when the leases are extended, to send updated documents.  Also advised that the foreclosure sale date was postponed to December 7th. (Another Postponement.  This happened on a monthly basis)

November 1, 2010 – DATABASE ENTRY – Main database record (Documents Received)

  • MHA program loan modification starter kit.pdf (Another MHA starter kit was received by mail)

November 4, 2010 – DATABASE ENTRY – Main database record (Documents mailed out)

November 10, 2010 – DATABASE ENTRY – Main database record (Phone call & Documents mailed)

  • Returned voicemail from this morning.  The call was regarding request for more documentation – 1) Hardship letter 2) 2 paystubs from last 30 days 3) 2009 Tax return. (They already have this information.  More work for me.  This happens over and over again which is a huge burden, particularly when you have other things you could be doing, such as looking for full time work, or networking, or trying to close new business.

November 11, 2010 – DATABASE ENTRY – Main database record (Documents received)

  • RFI Letter (attachment) received (Here ‘s an example of the complexity talked about in the post dated 10/07/13 (link).  I think the processor, on behalf of the investor, is picking apart my documents looking for any and all ways to make the process more complex.  It’s a perfect example of the obscene level of complexity that the banks and investors have concocted to be able to profiteer off of an economic collapse which they created. Here the bank represents that the federal government determines the deadlines and documentation requirements for the review process.  I’m willing to bet that is a mis-representation.

November 13, 2010 – DATABASE ENTRY – Main database record (documents sent)

  • Mailed documents via fedex overnight 7964 3494 5428 (Documents included the 2009 Tax Return / P&L Statements / another RMA affidavit and the IRA income explaination.  The IRA income on my tax return came from the liquidation of my retirement account which was necessary to pay for living expenses, including the mortgage.

November 15, 2010 – DATABASE ENTRY – Main database record (Documents received)

  • Foreclosure sale date notice (link) – 12/07/10 sale date, 4 copies. (Another of more than 20 foreclosure sale date notices that were received.  They sent 4 copies each with a different tracking number.  They appeared to be identical but a diligent homeowner would need to read each and every one every time to make sure they were aware of any information that the bank might attempt to slip through without your knowledge.  That’s 80 to 90 foreclosure documents that needed to be reviewed. 

November 16, 2010 – DATABASE ENTRY – Main database record (inbound phone call & documents sent out)

  • phone call and mailed documenet
  • Loan processor called to get information on ira dispursement and ask about documents that I sent
  • Also the tax return was signed in the wrong place.  Today I sent the 1040 page 2 via usps.

November 19, 2010 – DATABASE ENTRY – Main database record (documents sent)

Raising money – what for?

What’s The Money For?

After reviewing the history on consumer protection law and regulation (a history that has been developing since the 1600’s in England), I’ve found that the cause has historical support in case law but needs the right people who are passionate about freedom from oppression.  For nearly a century, Americans benefited from a general assumption that consumers must be protected.  Those benefits were removed through market manipulation by shady individuals and organizations (mainly sellers in the market). According to experts, the big picture shows that, in consumer related case law, there are shifts in the trend but, the overall long-term trend in America is toward consumer protection because of our dependency on the market system in our society.

After filing the lawsuit, the bank’s attorney’s requested a motion for summary judgment (MSJ hearing).    The MSJ hearing was September 17th.  If we had won (that was looking probable based on the feedback that my attorneys gave during preparation), then we would have started to prepare for a trial.  The trial phase would require a different attorney that has lots of experience in that area (this fact was not disclosed to me when I hired the attorney).  The problem was that there were no attorneys that would take the case on a contingency basis so money would need to be raised to fund the trial.  We did not make it past the MSJ hearing because the judge decided there was no finding of fact in our petition.  In hindsight, I believe that the petition was not properly written but I can’t be sure without a pro-consumer minded attorney working with me to review the MSJ documents.  This would be someone with knowledge of consumer protection law.  Once that is done, then I’ll have a better Idea of what all of the options are moving forward.  DeLeon and Washburn are done with the case and I believe that there may have been a conflict of interest in their involvement.  They were chosen based on a referral through my church which gave me confidence that the law firm would act in good faith.  In retrospect, they may have been a bad choice due to a possible conflict of interest related to their main source of revenues coming from businesses rather than consumers.  It’s looking likely based on how the MSJ part of the case was handled.  (If only there were some mechanism in place that would give consumers access to information needed for making a rational decision on which attorney to hire!)  What that means is that I’m now on the hook for $40,000 and still have not gotten my day in court.  The next steps are to find a consumer protection attorney to help with review of the MSJ procedures and to advise on whether there are any other avenues to explore at the state or federal level.

I’ve reduced monthly payments from $750.00 to $100.00/mo. because that’s all I can afford.  I also don’t know what will happen if I stop payments altogether asserting that my attorneys did not act in good faith (in other words, did not give the services promised for the fee negotiated).  I’m working with take home income of $32,000 per year (varies year to year).  I’m also paying $250.00 per month to the second mortgage company (the loan was originated as an 80/20) on the house which I no longer live in (payments continue for another 5 years).

Services needed to be funded are:

1) Hiring a consumer protection attorney and possibly file additional appeals/suits on the state level or in federal court depending on what the attorneys believe is the best course of action.

2) Paying outstanding invoices on any valid invoices for legal services already performed.

3) Advocacy to obtain “official consumer status” for homeowners and other legislation that gives homeowners protection from the kind of deceptiveness, and misrepresentation that was intended by congress with federal FTC and state DTPA legislation.  This is much needed to compensate for the power imbalance in the market that has been increasing over the last 140 years.

If all you have is $1.00, it will help greatly.

Thanks for reading and I welcome your feedback.

,Blake

MAN OR MACHINE? Part 1

With this multi-part thread, I will show that history has borne out the consumerist position that the market is so thightly intertwined with society that it exists to provide for Man’s quality of life, hence: The Market must serve Man or else American society can no longer call itself free.

UT Austin has an excellent Advertising School.  When I attended in the late 90’s, I remember seeing national statistics year after year, ranking us in the top 3 or top 5 in various categories.  In a few categories we were number 1.  I was invited to participate in the Media Track (the only such program in the country) by its founder Dr. Elizabeth Tucker.  I chose not to accept the offer but only because I got into the IPS sequence in the RTF School (Intensive Production Sequence – the film school).  My last semester, I was talking to one of my former Advertising classmates who partook of Dr. Tucker’s Media program.  She informed me that all of the Media Track students already landed internships with GSD&M.  I remember that GSD&M was hard to get into because they were red hot and the employment competition was fierce.  They had a policy that all new employees had to do an unpaid internship before getting hired, which meant instant career for probably most of the interns.  

I took a very interesting course titled “Advertising in Society”, the purpose of which was to explore the advertising industry as an institution and its function in a capitalist society.  The history that we studied began with the creation of the market system (capitalism, free enterprise).  There are only three systems on which society can be built; The Market, Tradition, and Authoritarian Control.  In America, we wisely chose the Free Market System which was born out of the oppression of the Middle Ages (a tradition based society) and is the social foundation for freedom and democracy as we know it.  In order for the Market system to work “naturally”, the original assumptions that dictate its inner workings must be maintained.  One of these assumptions is that adequate and accurate information will be available.  Without information, the market cannot be balanced or fair and therefore cannot be a suitable foundation on which to build a harmonious, efficient, and prosperous society.  You might ask: Advertising???  What the heck does advertising have to do with banks and loan servicing and my efforts to save my home?  Good Question.  As a social institution, the ad industry is charged with the duty of providing “adequate and accurate” information to the market.  Because of modern developments in technology and market forces, it is Advertising that serves this purpose and so it is Advertising that has been the focus of society’s efforts to maintain balance in the market for over 100 years.  Socially speaking, whether market information is provided via advertising, direct mail or a singing telegram it doesn’t really matter, so long as the consumer is sufficiently informed.  If homeowners are deceived in conjunction with their efforts to cure a mortgage default, on a large scale, then our society which is based on the free market has become diseased and freedom as we know it is under attack.

By design, the free market should regulate itself, but in practice it does not.  The proponents of free enterprise and lax government regulation tout the system as being “self-righting” or self-balancing as theorized by the framers of the system.  As we’ll see, in the present day market environment, the only thing that can “naturally” provide this self-righting quality is corporate conscience which has been found lacking in our modern day market system.  In the absence of corporate conscience, the only solution is regulation through administrative or common law.  The Federal Trade Commission (FTC) is an administrative agency created in 1914 to compensate for market changes and a lack of corporate conscience and to ultimately restore the necessary balance to the market.  It does this by regulating deceptiveness that originates with sellers of products and services.  This deceptiveness hurts not only consumers but other businesses as well (in fact the FTC was originally created to protect businesses, not consumers, from other businesses).  Around the 1970’s many states implemented their own version of the FTC in common law which is known as Deceptive Trade Practices Act (DTPA) legislation.  Texas is one of those states. 

Consumer Culture and the Market System

Today we use the terms “Liberal” and “Capitalist” to describe members of enemy camps.  But, liberalism and capitalism were born together out of the same desire for freedom.

Industrial capitalism is a system of economic organization that arose out of the decaying feudalism of the Middle Ages.  In part it was caused by and in part was the creator of a radically new value and belief system – Liberalism – which rose to dominance in the eighteenth century and literally conquered the world in the nineteenth 1

Classical liberalism was heavily influenced by the theories of John Locke and came to replace the tradition based social structure of feudalism.  In those days, “liberalism” meant the same thing that “freedom” does today.  By the time the U.S. constitution came to be, these theories were dominant in the west, hence reference to John Locke’s concept of natural rights (life, liberty, and property) in the U.S. Bill of Rights in 1776 and spoken in 1886 by Abraham Lincoln as part of the Gettysburg address (life, liberty, and the pursuit of happiness).  

It was Locke’s view that man originally lived in a state of nature possessing certain natural rights – life, liberty, and property – all of which were sacred and inalienable by the very construction of the natural order.  In creating governments man surrenders certain rights he possessed in the free state of nature but he does not, because he cannot, surrender his natural rights. 2       

At the end of the Middle Ages, capitalistic forms of economic life began to replace feudalism as a result of the new ideas of liberalism. 

…the ideas that were of fundamental importance in justifying the new economic order were the notions that all was mechanistic, that natural law governed the physical and social world, that the world was characterized by fundamental harmony, that man possessed reason and conscience, that men were born equal and endowed with certain fundamental rights – life, liberty, and property. 3     

These ideas and advancements mark the transition from the Middle Ages to the age of enlightenment.  This new economic order setup in the new age is known as economic liberalism.

Hence, the battle cry of economic liberalism became laissez faire – let the market alone – for if the market were allowed to obey the laws of its own motion it would, in the long run, produce a higher degree of efficiency and prosperity than it could if hamstrung by the regulation of government 4

Caveat Emptor:

Locke’s concept of the “tabula rasa” which held that all humans were equal and the human brain was a blank slate at birth.  Accordingly, all men are equally worthy and capable of participating in and benefiting from the market as intellectual beings.  In theory, the consumer was capable of navigating the market in the absence of government regulation, because of Man’s universal ability to reason.  This idea was expressed in the market as “Caveat Emptor”.  Notice, however, that according to classical liberalism and the free market theory, in order for the system to work in the real world, there has to be adequate and accurate market information upon which people can base their decisions.

Caveat Emptor – let the buyer beware – simply means that every individual, being rational, is assumed to possess the ability to exercise correct judgment by basing his decisions on available market information 5

The history behind Caveat Emptor is evidence that the capitalist system was, even at its birth, concerned with fairness and egalitarianism.  Another similar notion that found its way into the foundation of our society is the harmonious order of the World Machine conceived by Isaac Newton.  The Newtonian World Machine concept was used by Locke to define the natural order of society (described above) that influenced the emergence of the capitalist system out of the ruins of the middle Ages.

The idea of mechanistic systems, of harmonious order in the universe, of natural laws governing the activity of phenomena, of the atomistic conception of matter, of the ability of Reason to apprehend Reality – these ideas infected the economic, political, and social thought of generations.  And nowhere did they find more eloquent expression than in the ideas of John Locke, a friend and contemporary of Newton, who translated the discoveries of the physical science into the basis for a social physics, into the basic world outlook for the period 6

To summarize (More on Caveat Emptor in future posts):

The ideas that brought about the new economic order that would become capitalism were about the nature of Man; who we are in relation to the universe we live in:

  1. Natural law governs the physical and social world
  2. The world is characterized by fundamental harmony
  3. Man possesses reason and conscience
  4. Men were born equal and endowed with certain fundamental rights – life, liberty, and property

How is this relevant?  As a democratic society, it’s our responsibility to demand change when our rights are being trampled and if we don’t do so, the strong will oppress the weak. Or, to say it in free market terms, the oligopolistic will oppress the atomistic (the seller will oppress the buyer).  In order to prevent this, we need to show that ethics have always applied to the free market.

In future “Man or Machine” installments I’ll touch on the textbook history of the current structure of the market in contrast with its original design, and continue to expand my position to include why the mortgage crisis is evidence of a disturbing un-balance in the market; an unbalance that, if gone unchecked, will push America back into the social structure of the Middle Ages characterized by a small upper class that dominates a massive lower class…..Bye-Bye American Dream.

Endnotes:

The sources cited in this post came from articles that were reprinted in our class textbook for Advertising 371J “Advertising in Society”.  The textbook is: Roxanne Hovland and Gary B. Wilcox, “Advertising in Society, Classic and Contemporary Readings on Advertising’s Role in Society” (Chicago: NTC Publishing Group, 1989)

  1. James W. Carey, “Advertising: An Institutional Approach,” in The Role of Advertising, eds. C.H. Sandage and V. Freyburger (Homewood, Ill.: Richard D. Irwin, 1960).  Copied from Hovland and Wlicox pg. 13
  2. James W. Carey, “Advertising: An Institutional Approach,” in The Role of Advertising, eds. C.H. Sandage and V. Freyburger (Homewood, Ill.: Richard D. Irwin, 1960).  Copied from Hovland and Wlicox pg. 17
  3. James W. Carey, “Advertising: An Institutional Approach,” in The Role of Advertising, eds. C.H. Sandage and V. Freyburger (Homewood, Ill.: Richard D. Irwin, 1960).  Copied from Hovland and Wlicox pg. 18
  4. James W. Carey, “Advertising: An Institutional Approach,” in The Role of Advertising, eds. C.H. Sandage and V. Freyburger (Homewood, Ill.: Richard D. Irwin, 1960).  Copied from Hovland and Wlicox pg. 19
  5. James W. Carey, “Advertising: An Institutional Approach,” in The Role of Advertising, eds. C.H. Sandage and V. Freyburger (Homewood, Ill.: Richard D. Irwin, 1960).  Copied from Hovland and Wlicox pg. 21
  6. James W. Carey, “Advertising: An Institutional Approach,” in The Role of Advertising, eds. C.H. Sandage and V. Freyburger (Homewood, Ill.: Richard D. Irwin, 1960).  Copied from Hovland and Wlicox pg. 16 (The bold formatting was not in the Carey article and was added by me)

January 11, 2010 – Good News America: Everybody is trying to help.

My loan was originally set up as an 80/20 which means 80% is originated by one bank while the other 20% is from another bank.  The 80% was done through a company that has since gone under but before the bankruptcy, my loan was transferred twice, ending up with America’s Servicing Company (Wells Fargo).  The ASC loan was a 5 year adjustable rate mortgage (ARM).  The risk with an ARM is that without a fixed rate, the bank can raise your monthly payment if the Fed raises their rate.  It’s a gamble because with a 5 year ARM you have a lower interest rate than a fixed rate plan for the first 5 years but in the 6th year, the rate goes up (at least that’s what the bank is gambling on).  When I decided on a 5 year ARM, I figured after 5 years, I can always refinance if necessary. On January 11th 2010, I got a notice from ASC stating that my interest rate was dropping, resulting in a lower monthly payment.  I guess my gamble paid off because my mortgage payment actually dropped.  The second mortgage with Chase bank is a 15 year fixed rate resulting in a consistent $241.65 per month.  Both mortgages together totaled $780.63 per month including insurance and taxes.  Not too bad for a 3-2 single family home worth $175,000.00 (Good luck finding a decent two bedroom apartment for under $800 per month in Austin, TX).  In recent years some homeowners have been criticized for being irresponsible because they “bought too much house” and therefore should lose it based on their own bad decision.  That’s debatable for anyone but in my case it’s not even a reasonable accusation and here’s why.  When things are going well in my line of work, I make about $3200.00 per month, not including rental income which is about $850.00 per month.  That means the mortgage was only 26% of the expected income level for my line of work.  Before the interest rate started to drop, it was as high as 37% but that’s not factoring in the rental income.  (Loan modifications were designed for people whose payments were even higher than that and the goal was to get their payments down in the 30-33% range by lowering the interest rate and even forgiving part of the debt).  If you consider my rental income, then the mortgage only got as high as 30% so, I don’t think I can be categorized in the “bought too much house” column.  My business plan was real simple; keep renting rooms to boarders until I finished the studio at which point I’d instead rent the studio for a lot more.  The demand for “Short Term Rentals” (or STRs) in Austin has risen sharply in recent years, so much so that a few years ago, the City of Austin started issuing permits for homeowners who want to take advantage of the business opportunity.  If my house had not been in foreclosure, I could have gotten one of those permits (there is only a limited number available for the various neighborhoods).

When the banking industry started to see a sharp increase in loan defaults, the federal government offered assistance to the public by funding HUD approved housing counseling services (This was part of a “Making Home Affordable” initiative started by the federal government to help homeowners avoid foreclosure).  ASC provided me with notices to that fact on a regular basis.  I guess the idea was that these counselors would help navigate the foreclosure avoidance process.  I was relieved that the federal government was doing something about this problem, so, I signed a power of attorney with one such business called Frameworks CDC.  They told me that I should forward my documentation to them and they would be an intermediary.  So, I tried to respond to ASC’s RFI on January 12th, 2010 when I sent the requested documents to Frameworks expecting that they would be aware of deadlines and forward them in time.  Then on January 25th I received a letter stating that my assistance request was denied because I failed to reply in the timeframe listed in the RFI. (Notice that in the RFI, ASC gives a 10 day deadline from the date of the letter which leaves only 5 days to deliver the response.  Since it takes 5 days to get it by mail and then another 5 days to send it back, well that leaves you a whopping 0 days to gather the documents.  Of course, you could fax the documents to them, but they include personal information such as social security numbers, loan numbers, IRS information and fax and email transmissions are not encrypted, which means anyone monitoring your computer/fax transmissions can read the contents.  Some would argue that worrying about lack of encryption is just paranoid however, I have to disagree since my identity has been stolen 3 times already; twice from government databases and once when a Chase Bank employee emailed my account information to his personal email address).  Another consideration when deciding how to send your documents is that, in some cases you need to use certified mail so that you can prove the bank received your response (This becomes important later when you have to file a lawsuit).  After I got the notice that ASC had not received my response, I called frameworks and asked my account representative what happened.  Turns out she hadn’t sent the documents and didn’t sound very concerned.  Nor did she want to accept any blame or level of responsibility to act in a timely manner.  So on February 1, I faxed the requested documents to ASC myself which included my hardship letter and income profit/loss statement.  Soon after that I cancelled the Frameworks power of attorney and signed up with a different agency but found them not to be any more helpful.  Most of the time when I had a question about the foreclosure process, the rep did not know the answer and I didn’t trust their ability or motivation to keep up with the process so, since then, I’ve been doing everything myself.  It makes me wonder how much of our tax dollars are going towards paying these counseling services.  And, why do we pay them, particularly since they don’t possess any unique industry knowledge that will help you save your home?  Maybe if they knew more than the homeowner and handled the paperwork reliably on our behalf it would be worth it but, clearly they don’t see that as their responsibility, so…..what’s the point?   Just because you claim that you are there to help, doesn’t mean you are….. Sounds like a waste of tax dollars to me.

DECEMBER 13TH, 2009 – Account Delinquency Letter

DECEMBER 13TH, 2009 – Account Delinquency Letter

On December 13th, 2009, I received an account delinquency letter from America’s Servicing Company (the mortgage servicer) on behalf of Wells Fargo and Deutche Bank.

I’d been in my house for just over 5 years.  Back in 2004, after looking all over south and southwest, I bought in a south Austin neighborhood between S. 1st and S. Congress.  It’s a good location because both streets will take you straight downtown.  That also meant that home values would likely continue to increase.  The house was a fixer upper previously owned by the Maxies.  Mr. Maxie was a former state trooper and worked on the secret service detail at the Texas State Capitol.  I’m not sure if they actually called it the Texas Secret Service but, it was their job to protect the governor.  Yup, he was one of then future president George W. Bush’s personal body guards.  Rumor has it, back in the 90’s a neighbor kid and his friends broke into the house, stole Mr. Maxie’s guns and then shot up his house with his own guns (some of the bullets are still inside the front door, which received a marginal D.I.Y. repair).  I don’t know if that adds value to the house but in Texas, it’s a pretty cool conversation piece when people come over for the first time…”Hey those look like bullet holes”.  “They are.  See, what happen was…”.  That’s the kind of thing that people talk about which is good for a business.  It may be a little weird but once the studio is finished, I’ll bet it will get people in the door to rent the studio, just from the word of mouth.  Besides, Austin is a weird town.

The thing that originally drew me to the house, however, was not the history connected to Mr. President George W., but it had been one of two model homes when the neighborhood was new back in the 1980’s.  What would have been a garage on a typical house, was enclosed for use as a real estate office and was nicely landscaped out front.  The former real estate office bonus room attracted my attention for use as a future film post-production studio.  My first studio was a fairly cubicle shaped bedroom on Shoreline drive, off East Riverside.  That’s where I slept and did the sound mix for “Master of the Game” (MOG), the first feature film to be shot at the now ubiquitous Austin Studios (formerly airplane hangars at Mueller airport, now redeveloped into a mixed-use subdivision.).  Since I had mixed “MOG” with great results (the film got a limited theatrical run and distribution on DVD through blockbuster.com), I knew what was needed and what wasn’t to get professional results out of a studio.  Given my background, it made perfect sense to buy the house and build one, in spite of the fact that I didn’t know the first thing about construction.  Another great thing about the Maxie house was that the electrical work was already configured for the builder’s intended use of that space as an office, not a garage which usually has only one GFCI plug (GFCI is one of those plugs with the red reset button, like what you find in some bathrooms…no good for a studio).  It had three 120v and one 240v circuits. The room was big.  Larger than your typical two car garage and it was in my price range….Jackpot!

When I got the delinquency letter, my resume listed 7 years’ experience in account management, project management, systems installation and maintenance, but the doors had closed on my future in the systems integration business.  I had only a few thousand left in my retirement account which I had cashed in so that I could continue paying my bills (including the mortgage).  Around that same time, I followed a lead with a local production company and was hired as an independent contractor on a month to month basis.  The job involved engineering and video operator work on mobile production trucks in the live sporting event arena.  This was right up my alley since I had a college degree from the University of Texas in TV and film production as well as 7 years’ experience installing, designing, and troubleshooting AV and TV systems and equipment.  After Three years of working as an independent contractor, all the hard work finally paid off when the production company offered me the video and lighting operator position at the soon to be launched “Longhorn Network”.  Full time work, health insurance, and regular pay.  How could a bank turn me down for a loan modification now?…  But, the LHN job happened later, towards the end of my effort to secure a loan modification.  Let’s go back to 2009.  Since I was now running my own business, I needed a home office, database, accounting software…etc.  I bought a new computer and all the software (mostly old versions off eBay) and got the office setup in the smallest room of my studio.  By the time I ran out of money, the home office was fully setup.  The database software was just sitting there staring me in the face not getting much use.  Managing accounts in the SI business required meticulous record keeping so, I was already conditioned for the difficult (if not impossible) job of keeping tabs on a giant corporation, but I never thought I’d use my new home office to navigate through such a personal ordeal.  Over the four years that followed, it would see more personal use than business.  But, what to do about that delinquency letter?  Well, I figured I should probably fill out the form and send it in…so I did.