Banks
A pretty scary article about how, in the hundreds of thousands of foreclosures they are carrying out, banks get sloppy–or, one might say, over-eager. Without notifying owners, they break into the homes, change the locks, pilfer all their valuables, and trash all their other belongings. And in some cases, the owners were either not in debt to the bank, or the property had not yet been foreclosed.
When Mimi Ash arrived at her mountain chalet here for a weekend ski trip, she discovered that someone had broken into the home and changed the locks.
When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.
The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand.
In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing. And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed.
“Every day, smaller wrongs happen to people trying to save their homes: being charged the wrong amount of money, being wrongly denied a loan modification, being asked to hand over documents four or five times,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. …
Some of the cases appear to be mistakes involving homeowners who were up to date on their mortgage — or had paid off their home — but who still became targets of a bank.
In Texas, for example, Bank of America had the locks changed and the electricity shut off last year at Alan Schroit’s second home in Galveston, according to court papers. Mr. Schroit, who had paid off the house, had stored 75 pounds of salmon and halibut in his refrigerator and freezer, caught during a recent Alaskan fishing vacation.
“Lacking power, the freezer’s contents melted, spoiled and reeking melt water spread through the property and leaked through the flooring into joists and lower areas,” the lawsuit says. The case was settled for an undisclosed amount.
Somehow, it simply does not seem right that it can be legal for a bank to simply break into someone’s home and take everything without there being a formal, open motion to do so, with the owner being given a chance to rebut. If they were notified and could not pay the loan, then a court or some other body could give the go-ahead. But it seems that we live in a society in which the banks are almost a law unto themselves.
At the very least, they seem to be answerable for their errors–though in the above cases, however anecdotal, it seems like we’re looking at people who could get decent representation. How many get everything taken and trashed and just don’t have the wherewithal to do anything about it?
Norway actually socialized their banking system, at least in the 60s.
Dunno how that works, but it seems to me all this banking jive could in fact be run by the government, at least the consumer-facing side of things.
Damn near every home loan and student loan is gov’t administrated already, and of course all consumer savings are guaranteed by the FDIC. We’ve got a typically half-assed partially-socialized system already . . .
Then again I just got back from the post office today and perhaps our government can’t run things as well as Norway’s. Helps to only have a population of 5 million people and just a half-dozen cities to administer.
You can only imagine the reaction to “socialize the banking system” from the right. It leads down the path of “everything will be socialized and then we’ll be the new Soviet Union and disintegrate.” As if we’re not disintegrating already, but that’s not the point.
I’ve long been amazed at the unwillingness of the people to want government to do things. A result, of course, of the long campaign by conservatives to convince people that government always screws things up, their chief evidence being their own performance. Privatize everything! they tell us. As if the private industry does a better job most of the time. Where did that canard come from? That so many on the right can be so enthusiastic about getting their Medicare and also believe that government would destroy health care were it to be socialized shows their ability to maintain two completely opposing ideas in their heads at one time, thus, under the old adage, demonstrating their genius.
This hatred of government is not just to achieve a political purpose, it’s like using something frightening to herd people–like border collies to herd sheep–to the private sector so they can screw things up worse, but at least in the process jack up the prices and make a decent profit. Witness Americans foreswearing a $50 tax but gladly paying a private firm $100 for the same service.
The question really is, which services should be handled by the government? One answer is, in particular, those which are more or less parasitic in nature. Insurance is parasitic. Everybody pays into a pot and whomever winds up needing it most takes it out. It’s parasitic because those managing the pot take the money just to manage the pot–they don’t actually produce anything–and wind up taking more and more of the pot for themselves, denying it to those who need it, because they must address the needs of the shareholders, after all. Can’t be a good business if you aren’t making more and more profits each year, and in insurance, “profits” equals taking money away from people, effectively a systemized form of robbery. Like Vegas casinos, but less honest.
Interestingly, those who cry foul at “socializing” insurance seem to be unaware that insurance is socialist at its heart: as I mentioned earlier, everybody pays into a pot and whomever winds up needing it most takes it out. What’s more socialist than that? So as long as we’re being socialist, why not cut out the parasites and have government simply do the same thing but without the ever-increasing profit margin?
Banks are similar. They don’t really create anything, they just take money from some people and lend it to other people, taking profits for this “service.” But because it’s profit-based and -motivated, because there are again the same pressures to make ever-increasing profits, we get the same predatory practices, ripping people off, tricking them, and robbing them blind. Again, why do this?
In both of these areas, the capitalist idea of profit motive does not good, only harm. The idea of capitalism is to spur people to create wealth. But neither banking nor insurance, by themselves, really create anything–they just move money around. Thus the profit motive comes from the ability to effectively (and perversely legally) steal from the money put into the system.
There’s no real motive (for the public) to have these systems run privately. Government can manage no worse, and frequently does quite a bit better–without a profit motive, thus cutting the loss into the system by quite a bit.
But we can’t do it, because that would be socialist. Not that “socialist” means anything, it’s nothing more than a scare word to frighten people and so herd them toward private industry which can then fleece them, as good capitalists should be fleeced.
Except for something which apparently you don’t understand (or maybe care about)–competition and free markets. When Government takes over something, it instantly becomes a monopoly with no competition. So people can’t look for a better price or see an incentive to improve service. If the DMV wasn’t the only place to get licenses and plates, then who would go there? Likewise, companies like UPS and FedEx have forced the Post Office to innovate and improve their service.
I think the Federal Government should stick to defense, diplomacy and mediating between the States, as was originally intended. And get out of the Health care business, the insurance business, the Banking business and even the Automobile business. But, as you noted, since having Government run everything worked so well in the USSR, North Korea and Cuba, maybe we should try that instead.
Hah. Funny.
In a parasitic industry, a “competitive price” means some firm which is, at least temporarily, taking fewer profits than other firms. This is exactly why the health insurance industry is so opposed to public insurance–because they know that, in an industry where private firms add no value and simply take profits, the government could always offer a more competitive price simply because they do not take profits.
Government could always give a more competitive price. Which is why they’re not allowed–that wouldn’t be “fair” to private firms which exist to skim money from the customers.
The trouble with insurance–especially health insurance–is that is is *not* a competitive market. Customers can’t shop between states, are often limited to plans from their job and State commissions often set rates and benefits to a large extent. Differentiating from competitors is very difficult and often profits are locked in at a low rate (or even eliminated altogether).
If customers could shop for health insurance the way they shop for cars and cell phones, than Health Care costs would go down overnight. Unfortunately, Obamacare takes exactly the opposite approach, adding even more regulation and uniformity of coverage (you actually get penalized for choosing to have too much or too little insurance coverage.)
With no profits, Government can sometimes offer good rates. But often, it’s accompanied by terrible service. People would rather pay an accountant than deal with the IRS or pay a lawyer to deal with the Property board. If you’re using a Government service, it’s usually because you *don’t* have a choice.