Banks Challenged Over Foreclosures

A couple of housekeeping issues -- I now have two new articles online. One is a Men's Journal piece about sports feuds (it's been a really excellent year or so for sports spats), and the link for that is here.

The other is "Invasion of the Home Snatchers," a long piece about the foreclosure crisis. When I went down to Jacksonville to research this piece I initially told my editors that it wouldn't be possible to do this article in one shot, that we would have to break it up into two parts or a series, because there was so much material. We had to leave an awful lot out of this article, purely for space reasons, among other things details about a wave of class-action lawsuits that are coming out now in various places around the country.

One such suit was filed by a Newark-based lawyer named Lawrence Friscia, who has launched a powerful suit against Bank of America and two subsidiaries for predatory practices on the one hand and a rush to commit fraud on the other. Friscia's complaint eloquently spells out the entire history of the mortgage scam and anyone who is interested should check out Beals v. Bank of America.

Another suit was filed by a Louisville, Kentucky-based lawyer named Heather Boone McKeever against Citigroup, Ally Financial, and MERS, the electronic mortgage-registration company. What's interesting about Heather's suit is that she uses RICO, the racketeering statute originally designed to help law enforcement prosecute the mob. "It's organized crime by people in suits," she says. The reason I wanted to follow that case as well is that it would allow readers to see how all the various actors involved in the housing scam -- from the big warehouse lenders like Countrywide, to the megabanks like Citi, to MERS, to the ratings agencies, to the debt collectors and insurance companies and process servers -- sometimes acted in concert, the crimes of each complementing the other and furthering the overall scheme.

But while is is true, paradoxically this story is also about a whole taxonomy of financial firms mindlessly pursuing fraudulently-generated profits and fees at the expense of homeowners and investors. There are elements of conspiracy in all of this, i.e the RICO case, but the larger thing I was trying to describe is a giant dumb man-eating beast whose various limbs are ignorant of what the others are doing. A bank that offers modification and forecloses at the same time -- a typical situation, described in this article -- is an example of this kind of lunacy.

Anyway what we ultimately decided to do here was publish one long article and commit later on to updating online what happened to some of the characters in the piece, people like Shawnetta Cooper, a woman who came into court the day I was there and was saved from foreclosure by a freak accident. She's found a lawyer to represent her since the article was written and I'll make sure to post the news online if and when something happens in her case.

I also have some news about appearances (I'll be at a bookstore called Vroman's in LA tonight) coming up later this afternoon.

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