Georgia Judge Mocks U.S. Bank Over Denied Mortgage Modification

[Are_grits_groceries]

The order lays the case out like this: Phillips is in danger of foreclosure. U.S. Bank is among the "poorly run organizations" that recently received massive bailouts from the federal government and agreed to participate in the Obama administration's Home Affordable Modification Program. When Phillips applied for a modification, the bank denied his request "without numbers, figures, or explanation, reasoning, comparison to guidelines, or

"This court cannot imagine why U.S. Bank will not make known to Mr. Phillips, a taxpayer, how his numbers put him outside the federal guidelines to receive a loan modification," Blackmon continued. "Taking $20 billion of taxpayer money was no problem for U.S. Bank. A cynical judge might believe that this entire motion to dismiss is a desperate attempt to avoid a discovery period, where U.S. Bank would have to tell Mr. Phillips how his financial situation did not qualify him for a modification."

If Phillips didn't qualify, Blackmon wrote -- with apologies to folksinger Arlo Guthrie -- why didn't the bank say so with "mathematic equations, pie charts, and bar graphs, all on 8 by 10 glossy photo paper, with circles and arrows and paragraphs on the back explaining each winning number"?

"Maybe U.S. Bank no longer has any of the $20 billion left, and so their lack of written explanation might be attributed to some kind of ink reduction program to save money," Blackmon continued. "Clearly, U.S. Bank cannot take the money, contract with our government to provide a service to the taxpayer, violate that agreement, and then say no one on earth can sue them for it. That is not the law in Georgia."

http://www.huffingtonpost.com/2011/11/15/dennis-blackmon-georgia-judge-mocks-us-bank-denied-mortgage-modification_n_1094797.html

Now that was a smack down!

[tsuki]

1. U. S. Bank will take it to another judge. nt

[sarcasmo]

2. Take it to another judge they have bought and paid for.

[blogslut]

3. I. Love. This. Judge.

[xchrom]

4. +1

[aquart]

43. +2

[dkf]

5. U.S. Bank repaid their TARP loan in 2009.

http://www.bizjournals.com/denver/stories/2009/06/15/daily48.html

Moreover the CEO has ripped TARP.

While government leaders were well-intentioned in setting up the Troubled Asset Relief Program, it’s a “lousy program,” U.S. Bancorp    CEO Richard Davis said at a business leaders forum Tuesday.

U.S. Bank was told, not asked, to participate in the program, which is a Darwinian attempt to “synthesize” weaker banks into stronger banks through consolidation, Davis said at the forum, held at Thrivent Financial for Lutherans in Minneapolis. U.S. Bank (NYSE: USB) sold $6.6 billion in preferred stock with warrants to the U.S. Treasury in November through its capital purchase program.

“There’s no A, R or P in TARP,” Davis said, adding that “troubled” is the only word in the phrase that’s accurate. “The ‘asset relief program’ has yet to occur.”

The problems with the U.S. Treasury Department’s program are that its goals and rules have changed since its inception last fall, it’s poorly defined and it’s caused collateral damage to healthy banks.

http://www.bizjournals.com/sanfrancisco/stories/2009/02/16/daily40.html

[Name removed]

7. Deleted message

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[dkf]

8. It's just the arguments made are sometimes stupid.

A judge should know better.

He should pick a legitimate gripe instead of making up shit as US Bank apparently avoided the subprime mess.

Now if he were talking about citi that would be legitimate.

[Name removed]

11. Deleted message

Message removed by moderator. Click here to review the message board rules.

[dkf]

13. His gripe was that US bank took the bailout money.

Treasury didn't give the banks a choice because they didn't want to point out who the weaker banks were, like Citi.

[Yo_Mama]

18. It's apparent that the judge is somewhat confused.

US Bank wasn't a poorly run organization that needed TARP money. It was one of those forced to take it because the FRB was worried that banks that needed the money would face a market stigma and capital flight unless a bunch of clearly healthy banks were forced to take the money also.

US Bank took it, bitched mightily about being forced to take it, and repaid it after screaming to the heavens. US Bank actually suffered because of the "bailout" - it couldn't use the money, but it was forced to take the money, so its profit margins actually went down. Banks don't make money from deposits or TARP funds - banks make money from lending OUT deposits or TARP funds (which they had to pay for). US Bank had been relatively conservative, and the drop in funding needs from the economy left it with all this money which it couldn't lend.

[fasttense]

39. I don't think I have ever seen so much misplaced sympathy for a bankster.

The only place I've seen such love for a bank is in the free republic, RepubliCON board.

Poor, poor little bank. Forced into poverty. Forced into taking practically free loans (and couldn't make any money with a .25% loan even when their own loan rates were much, much higher). This bank and their so abused CEO are so unfortunate as to be forced to take money.

Where is the humanity?

Such ridiculousness is seen daily on Fox and here for some mysterious reason.

You know what I heard? I heard there are people with so little integrity, so little ethics and morals that they take money for posting RepubliCON points on Democratic threads.

[truedelphi]

9. Hey there liberal historian.

There is a function here that helps one keep one's blood pressure down.

I use it.

So I get to see posters like you, and don't have high blood pressure from viewing some of these other (perhaps well meaning) people. When I had to view them, I realized their posts affect me more than it is worth. Boy, do I love "ignore!"

[NBachers]

27. Yeah, I see "Ignored" in my post tree, and then see all the responses to the drama they've created

And I'm reminded of why I put "Ignored" (whoever they are) on my Ignore List.

It just makes for smoother sailing.

[SwampG8r]

33. i put seven "people" on ignore and 90% of my headaches stopped

[iamthebandfanman]

37. if you cant handle your emotions

with people over the internet... i feel bad for ya in real life.

if youre being harrassed by someone, ignore is a good feature..

if someone bugs you because they dont agree with you, ignore is an easy out.

[NBachers]

44. Yes, it's gratifying to go back over my "Ignore" list and find most of 'em have been tombstoned

[Name removed]

20. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Name removed]

30. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[Lorien]

10. Right on time with the pro-estabishment BS

How surprising. NOT. :eyes:

[Yo_Mama]

12. They repaid TARP and they never needed it in the first place, BUT

according to their website, they are participating in HAMP:
http://www.usbank.com/mortgage/learning/making-home-affordable.html

And if they are, they may be getting money for loans they do modify. That program includes subsidies, and when banks sign up for it, they are supposed to agree to a set of rules.

So the judge may be partly wrong, but he's not totally wrong.

Edited to include a link to the Service Participation Agreement, which will form the "contract" to which the judge refers:
https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/servicerparticipationagreement.pdf

Because some loans are excluded, the bank may have an easy out. The bank can appeal and it looks like they may have a pretty strong case on appeal. That SPA is further modified by all the Fannie stuff issued in connection with HAMP. I know of no guideline stating that you have to explain to the applicant why the applicant doesn't qualify - but if it is portfolio loan, you better had do so.

Also, if US Bank was servicing the loan for a private securitization, then their original servicing agreement has legal priority over the HAMP SPA. The obligation in that case is to obtain any releases from the original agreement possible, but there is no reason that the Trustee has to authorize it - they can just say no.

This should be interesting!

[dkf]

16. Yes he should have complained about taking HAMP money if anything.

If they had taken the funds for this case and then not come through then that definitely needs attention.

Thanks for understanding my point. Some people are so crazed by the word "bank" they can't think straight.

[elleng]

22. I suspect the Judge knows what he's doing.

'Blackmon's order says Georgia law allows claims for breach of a duty of good faith and fair dealing, and that there are two contracts at issue: the bank's agreement to participate in HAMP and its loan with Phillips. The case is on its way to a jury trial. "While difficult to define, jurors know good faith and fair dealing when they see it, and jurors can spot the absence of same."'

[fasttense]

40. How dare people think so unfairly about banksters

The unfairly abused banksters only caused the largest economic collapse since the 1st RepubliCON Great Depression. I can't understand why anyone would blame a complaining bankster when he forces a family to lose their home for no apparent reason. It's just unimaginable that people would be prejudice against banksters for their unrelenting crimes.

I don't see this bank filing for bankruptcy. When they do I guarantee I'll have sympathy for them.

[girl gone mad]

17. They paid back TARP because they didn't like the executive salary caps.

That's the bottom line.

In order to get out of TARP and pay back the government, US Bancorp had to cut its dividend by over 80%. Executive compensation was increased. Don't you think the shareholders would have liked a say in the matter?

It's interesting that you cite this example since it provides solid evidence that TARP was essentially a scam.

[dkf]

19. "Scam"? In what way?

[Yo_Mama]

23. TARP wasn't a scam

A lot of banks needed money at that point - it was just that US Bank didn't.

When banks have more in deposits than they can lend safely, they normally drop interest rates to shed some deposits. That's done to maintain profitability. Because you have to have to maintain a capital ratio, higher capital means you can lend more. TARP funds were paid for with preferred stock which paid 5%.

There's an interesting study of the results:
http://www.ou.edu/content/dam/price/Finance/files/TARP%20Finance%20.pdf

http://www.bizjournals.com/pacific/stories/2009/02/16/daily25.html

This preliminary FDIC paper on TARP found that instead of more lending (the market was saturated), large TARP banks made riskier loans at higher interest rates. But you would have to cover the cost, wouldn't you?
http://www.fdic.gov/bank/analytical/cfr/2011/sept/BRC_2011_69_Black.pdf

It's preliminary and we are not supposed to quote it, but how about this:

Interestingly, the TARP banks were less capitalized than the non-
TARP banks prior to the infusions, but became relatively less capitalized after the
infusions. This suggests that these banks suffered larger losses in the later period of the
sample.

That's not surprising given that the TARP banks, as a whole, were in riskier loans prior to receiving TARP funds, but it does raise a real issue.

[girl gone mad]

28. It was a scam, sold to the public under false pretenses.

If you will recall, Congress and US taxpayers were told that the funds were urgently needed and that there was no time to wait on the standard process which would allow time for debate and investigation.

The bill was rushed, debate was not allowed, much pressure was brought to bear on House members who had balked.

After passage, the moneys were not even touched for several months, and then were put to completely different purposes than that which the banks said was immediately necessary (buying toxic assets).

Banks which were never at risk were required to accept the money until the phoney-baloney stress tests were finished. And we see that for most banks which were at risk, recapitalization via dividend cuts and reduced compensations would have been sufficient. The few banks which were insolvent should have been put into receivership. It was all a game to buy time.

[Hosnon]

21. That's relevant but not determinative.

If a bank is about to go under and needs a "bridge loan" to survive, and then repays the loan in full once the crisis is over, everything isn't square.

The bank is still beholden to the loan provider.

If the CEO didn't want government strings, he shouldn't have taken the money (and probably gone under).

[dionysus]

31. is there any big corporation you won't defend? at long last, have you any decency?

[Divernan]

42. Any memeber of a "Big" interest which donates to O is automatically defended by some.

Ya know? The ripple effect?

[reACTIONary]

32. I like getting the big picture, contrasting views and supplimental facts. Thanks!

I don't have anyone on any ignore list.

[spanone]

6. k&r...

[Iggo]

14. OUCH! FUCK! DAMN!

:applause:

[elleng]

15. LOVE IT!

Benefitted from a somewhat similar smackdown, from local judge in personal matter, and it feels SOOOO GOOD!!!

[greiner3]

24. I love OPs such as this;

It gives me ample opportunity to increase my ignores.

[Pacifist Patriot]

25. You'll just be jumping on my bandwagon.

First thing I noticed about this OP was how active Ignore was in responding to it.

:-)

[provis99]

26. heh. we must have similar ignore lists.

[tavalon]

29. Well, that was satisfying.

[earcandle]

34. Robert Reich tells it in two minutes how important Occupy is for all of us.

http://front.moveon.org/the-single-most-important-robert-reich-clip-you-can-share-today/

[blackspade]

35. Top rope material.

[Tanelorn]

36. OUCH. Sarcasm from a judge!!!!!!!

[aletier_v]

38. I have two accounts at US Bank

But unfortunately I will be closing them in the next few weeks.

Moving to a credit union.

US Bank has been good for the past fifteen years but I can't support them anymore.

[The Wizard]

41. It all started about 46 years ago on Thanksgiving

If Phillips didn't qualify, Blackmon wrote -- with apologies to folksinger Arlo Guthrie -- why didn't the bank say so with "mathematic equations, pie charts, and bar graphs, all on 8 by 10 glossy photo paper, with circles and arrows and paragraphs on the back explaining each winning number"?

[hootinholler]

45. Now they might have if

The judge had a seeing-eye dog :D

:rofl:

I like this response by da Judge.

[JNelson6563]

46. Awesome judgement, your honor.

:toast: