Sunday, March 06, 2011

Dana Milbank finds his empathy

I've been wondering for a while what they did with the real Dana Milbank. Now I see, thanks to David Dayen, that the old Dana Milbank got a big dose of cold reality in dealing with a refi at Citibank. Apparently it was quite an awakening.
But Milbank gets quite a bit right in this piece. He realizes that servicers have no concern over foreclosures and in fact have the financial incentive to foreclose over a modification. He understands the illegal fee laddering and the forced-place insurance scandal and robo-signing and all the other illegal activities which have become endemic to the servicers. He sees that the Consumer Financial Protection Bureau would be in a position to rein in the worst of these abuses if they don’t have their funding and responsibilities stripped away by House Republicans and handed over to the Office of Bank Advocacy Office of Comptroller of the Currency. And this is a fine conclusion:

My wife and I are reasonably savvy consumers – she has a brand-name MBA, and I began my career as a business reporter for the Wall Street Journal – but we were no match for a bungling bank. After five months of trying, we still haven’t been able to resolve all of Citibank’s mistakes – nearly all of them, curiously, in the bank’s favor [...]

That so much can go wrong with such a simple refinance doesn’t bode well for the 5.5 million homeowners in default (on top of the 3 million already foreclosed). It’s impossible to know for sure, but by some estimates, half of them are victims of some form of servicers’ errors.

“What happened to you,” Ira Rheingold of the National Association of Consumer Advocates told me, “happens to people every single day.” And it will continue, with its resulting drag on the economy, unless and until the big banks can be brought to heel.
Not celebrating Milbank's misfortune here at all, but grateful that he is now an eyewitness. Universe knows the only way to change the prevailing Village narrative is for the insulated class to actually feel the greedy "invisible hand of the free market" reach deep into their own pockets.

[Big thanks to Avedon at The Sideshow for the kind link.]

[More posts daily at the Detroit News.]

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