The Sausage Factory
By David Glenn Cox
When the doorbell rings at two in the morning, its the repo man. When the process server comes he doesn't park in front of your house. These are strategies intentional by there design to catch you off guard and unaware. Strategies designed to give them the emotional upper hand over the surprised and unsuspecting.
These people do these jobs every day yet, you are new to the game, aren't you? Several years back a woman talking on a cell phone while driving didn't see the traffic stop and rear ended my car at fifty miles per hour. A few days later when I called her insurance company the adjuster said glibly, "oh yes, I'm looking at the accident report it says here that you were involved in a pile up."
I stopped him, "No, I wasn't involved in a pile up, I was rear ended by your customer."
"Our investigator has yet to make that determination," he answered.
"Determination? She was ticketed by the police at the scene."
"Sir, the police aren't the courts."
We had the car towed to my in-laws because they had storage space for the totaled car. First, the insurance company offered us $700 for a car that we'd paid $5,000 for and that was before we put a new convertible top on it.
"We're not going to pay you for the new top or the new tires," they explained, "anymore than we'd pay you for the gas in the tank."
Then the phone calls began, wanting to know when they could pick up the wrecked car. "That would be sometime after you pay us a fair price for it, I answered. They would call the house once a day and call my wife's cell phone twice a day, once in the morning and once in the afternoon. Three phone calls a day for six weeks all wanting to know when they could pick up the car.
"State law says the injured party shall be provided with rental transportation." The insurance company said, "Go ahead, rent a car and if we're found liable we'll reimburse you."
"That's not what the laws says, I'm the injured party. I didn't hit your customer your customer hit me!"
He calmly answered, "We dispute liability."
While they were in an incredible hurry to pick up my wrecked car they weren't in any hurry to do much of anything else. They knew well that we needed our car replaced and they knew well that by making us pay for a rental car on a credit card they were putting financial pressure on us to settle quickly.
The evidence of my innocence and her guilt was the car itself. I was hit so hard it broke the drivers seat off the floorboard and broke the bottom cushion of the back seat off of it's mount. Their strategy was to get the car quick before we thought to take pictures. Once the car was in their possession we would be under even more pressure to accept their paltry offers and their phone calls were designed to harass us. Their phone calls were to make sure that settlement was always the issue of the day and never to give us a day off.
I tell this story as an example of how the world works. We were confused and disoriented in uncharted waters, I was on serious pain killers for several weeks. We were under personal stress, emotional stress and financial stress. The insurance company knew all of these things and used them all to their best advantage. More than once the insurance company called me saying, "Your wife said to call you and ask you about the best time to pick up the car." Then they called her with the same story only reversed.
From the very beginning of the mortgage crisis there has been this narrative repeated over and over on all the financial networks, and by conservative pundits and even by the President of the United States, "People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway." It is a strategy designed to balance the blame on unequal partners.
The banks and mortgage brokers are professionals, they are under a professional responsibility to protect the interests of the bank and their shareholders. It's is the bankers job to evaluate the merits of each loan and to approve or disapprove each loan on it's merits. John Q. Public is under no such obligation, they can waltz in the bank and say, "I'm making $8.50 an hour down at the Burger King and want to buy me a mini-mansion."
You wouldn't give a ten year old a chainsaw or a loaded gun to play with even if they said that they could handle it. Because you're the responsible adult here you're supposed to know better. You don't have to give the kid the chainsaw or a gun just because they ask for it. Consumers aren't children but a banker or a mortgage broker is better trained in the field than the public and should know better than to make bad loans. These banks didn't have to make these loans they did so because they wanted to, and because the profited from them. Then when it all goes wrong the bankers and pundits say, "that kid swore to me he was a lumberjack!"
This crisis was created solely by greedy, irresponsible and reckless bankers and to hold anyone else culpable is nothing but a God damned lie!
I read a story yesterday about a family that had been evicted from their home who broke the locks and moved back in even though the house had already been resold by the bank.
I do not know where this family stands legally, but I do know about foreclosure. Trust me, I've been there, possession is nine tenths of the law. You wait on the phone as the bank tells you to "please remain on the line and the next representative will be with you shortly." Then you speak with someone who has no record of ever receiving the documents that you sent them. They say compassionately that the bank wants to try and work with you and after an hour or so they assure everything will be just dandy!
Then later the same night, a process server brings you a legal package from the bank. This one is full of threatening legal tones and talks about the banks "rights!" Your rights? Well, it doesn't say much about your rights, if you want to know about you're rights you better call your attorney! You don't have an attorney? You're unemployed and struggling to make your house payments and you don't have an attorney representing you? You're screwed!
The banks strategy is to unnerve you, to give you hope and then to snatch it away. To scare you and disorient you, to play good cop, bad cop and to batter you like a cat with a mouse. To wear you down until finally you throw up your hands and say, "you know what? F*ck this, we're out of here!" Only after you are out of the house do you slowly begin to understand that that's what they wanted all along was to get you out of the house as quickly and as quietly as possible.
Ask yourself, why would the bank want to work with you? How is that possibly in their best interest? They are trying to make the best of a bad situation and if they modify your loan they'll lose potential revenue and the federal government will only give them $1,500 for their trouble. What's $1.500 in the grand scheme of things, one, two or three payments? But if they throw you out, then, they can deduct that loan amount from their tax bill as a loss and they can take the deed to the troubled asset resources program and get new money in exchange for the deed to your house.
Money that the bank can use the very next day to invest in Chinese Real Estate or to invest on Wall Street. Then when the FDIC has accumulated enough houses in your area they will hold an auction and the bank can buy your house back for forty cents on the dollar, with zero percent interest and with no down payment and a with a clean title. Then if the bank still can't sell your house after two years the FDIC will give the bank a rebate on part of the purchase price. This is known as the condom and casket strategy, making money coming and going.
Is some light beginning to shine in? Are you beginning to understand why the banks want to push families out of homes they can't sell, just as fast as they can? Of course the banks have to modify some loans just to make it look like they are really trying. But it's not their fault if they don't get your paper work or you don't have an attorney or the phone company turns off your phone for non-payment.
I was motivated to write this story because as I read about the family moving back into their foreclosed home the comments surprised and shocked me, especially coming from a progressive web site
"The previous owners could have done this at several points in this process, but they didn't. They waited until the house was all nice and ready for the new owners, and then they moved back in. Kind of fishy I think. I'm on the side of the totally innocent new owners,"
"Yeah, you got a point. Waiting until the house was re-sold before pulling this shit was extremely unfair to the new buyers."
"However, if the head of a family foolishly or intentionally signs a loan contract to make payments that he or she cannot pay, and takes, and spends the loan money, and then, for whatever reason, they cannot make the payments, that person is in default and the property assigned as collateral does rightfully belong to the bank that loaned them the money."
If you've never been through the sausage factory then you just don't know anything about how they make sausage do you?