The con game in the corner office (5×8 – 9/2/11)

Fraud and foreclosure, life in a ‘man camp,’ dying in Duluth, reporters white with foam, and the problem with kids being kids.


1) FRAUD AND FORECLOSURE

There’s no telling how many people have been thrown out of their homes in foreclosure proceedings based on phony documents the banks created out of thin air to show they held the mortgages. It’s one of the great scandals of the century — given how the foreclosure crisis helped the economy tumble to what it is today — and one politicians, the regulators, and just about anyone else involved can’t seem to give a rip about.

That much is clear from an article in American Banker that says nearly a full year after the scandal first surfaced, banks — including Wells Fargo — are still doing it.


According to a document submitted in a Florida court by Bank of America Corp., bank assistant vice president Sandra Juarez signed a mortgage assignment on July 29 of this year that purported to transfer ownership of a mortgage from New Century Mortgage Corp. to a trustee, Deutsche Bank. Two problems with that: New Century, a subprime lender, went bankrupt in 2007; and the Deutsche Bank trust that purported to hold the loan was created for a securitization completed in 2006 — about five years before Juarez signed it over to the trust. (Bank of America, as the servicer of the loan, was seeking to foreclose on behalf of the trust and its bondholders.)

How is that banks can get away with this? Moreover, how is it that if journalists can figure this all out, prosecutors and people who are paid to oversee the banks can’t?

Here’s a 60 Minutes piece describing the fraud that aired last spring…

2) A VISIT TO “MAN CAMP”

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How desperate do you have to be to live in “man camp?”

Like many people, a young man from Minnesota is striking it rich in the oil fields of North Dakota, the Associated Press reports today…


His degree is in recreation and leisure management. When he was in school, he was a Walmart cashier and also delivered pizzas.

Now he makes six-figures working on an oil rig, 80 hours a week. He figures this time, with more experience and plenty of overtime, he’ll take home $4,000 to $5,000 a week.

“I’ve paid off college and my car. I blew a lot of it, too,” he says, detailing some of those purchases – $4,000 worth of snowboarding equipment, $5,000 worth of clothes, a $3,000 mountain bike. …

The trade-off? He has to live in North Dakota. The middle of nowhere. “Man camp.” It’s a camp with cramped quarters, no amenities, and few women. Many of those looking for work show up with the trappings of a once-better life, and the realization that people who have houses in the area are charging a fortune for a room. So they had to build “man camp.”


To the average person, though, the rooms at this camp would probably seem more like a dorm, or Army barracks – solid enough, with heat, air-conditioning and indoor plumbing.

But they’re also basic and tight on space, often equipped with a single bed, a small desk, a TV with cable and a DVD player, and a “Jack-and-Jill” bathroom, shared with a next-door neighbor. If that neighbor visited, someone would have to sit on the bed. There’s only room for one small chair.

The smell of plastic (a main component in the walls of these temporary structures) and pesticide (mice and insects are problems out here on the prairie) also can be a little overwhelming.

Despite the desperation for work, many can’t stand the isolation.

Are there better ways to get rich? Maybe. Buy a parking spot in a big city, the Wall St. Journal says. “The beauty of it is, as [apartment] prices came down, parking went up,” a real estate broker says. In Toronto, a parking spot is going for as much as $100,000.

But back to North Dakota, for a second. Nate Silver, of fivethirtyeight, says if the economy is so good there — and it is — shouldn’t President Obama’s approval rating be higher there? It’s not. And he’s found there’s little correlation between a state’s economic performance, and a president’s job approval rating in a state.

3) DYING IN DULUTH

If you live in northeast Minnesota, you’re twice as likely to take your own life as people in other parts of the state, new data from the state shows. Reported in the Duluth News Tribune, the data show you’re also twice as likely to have a damaged liver and more likely to die from heart disease.

“You live in God’s country up there, and you pay a price for it,” said Jon Roesler, a state Health Department epidemiologist. “I mean, we all want to live there, but then you look at these health-outcome numbers, and you go — whoa.”

A less educated population and less access to health care are given as reason for the surprising statistics.

Outside of Duluth, in the Northeast, how many psychiatrists are there?” he asked. “Probably not very many. The economics of delivering specialized care is pretty tough.”

One resident of northeast Minnesota suggested on MPR’s Ground Level blog (which has a link to the full report and assesses the problem in other parts of the state, too) that the high poverty rate in the area leads to ineffective care when people do have access to it.

“Nothing serious ever gets diagnosed here we are sent elsewhere and can’t afford to travel for medical care,” she said.

4) REPORTERS WHITE WITH FOAM

Remember this bit last weekend when an unsuspecting reporter was awash in sewage?

It turns out, it wasn’t sewage, the Washington Post reports, exonerating the reputation of Ocean City.


Ocean City shut down its wastewater treatment plant as the storm approached Saturday to prevent a spill or leak, said Jim Parsons, chief deputy director of the town’s public works department. In any case, he said, Ocean City doesn’t dump raw sewage into the water; it treats it according to Environmental Protection Agency standards and then releases it a mile out to sea.

5) THE PROBLEM WITH KIDS BEING KIDS

High school football fans in Louisville, Ohio are upset that officials called a penalty on two players for celebrating a touchdown. The penalty helped set up the opposition’s winning drive.

It turned out the “celebration” was a tribute to a player who had just died.

VIRAL VIDEO OF THE DAY

It’s not exactly fake, but there was more stuntwork involved here than this ad, released this week, suggests. Still, you may not have needed another prompt for a round of “if only I was young, again,” but here you go, anyway. Here’s the whole story behind it.

TODAY’S QUESTION

A Ramsey County citizens panel is planning to hold public hearings on the financing of a proposed Vikings stadium, but some officials are calling for a referendum to put the issue before voters. Today’s Question: What sorts of issues are best put to voters in a referendum?

WHAT WE’RE DOING

Midmorning (9-11 a.m.) – First hour: How job sharing could help the economy.

Second hour: Books for the college-bound person.

Midday (11 a.m. – 1 p.m.) – First hour: Economist Louis Johnston and Chris Farrell on the economy and personal finance. From the State Fair.

Second hour: Garrison Keillor at the Fair’s Carousel Park.

Science Friday (1-3 p.m.) – First hour: The microbe behind Black Death.

Second hour: A history of America’s superhighway system and the engineers that made it happen.

All Things Considered (3-6:30 p.m.) - British actor Hugh Laurie plays the irascible Dr. Gregory House on the television medical drama, “House.” Now, he’s channeling another persona: that of a New Orleans-style piano-playing bluesman. Hugh Laurie talks with host Melissa Block about his life-long love of the blues.

Critically revered Minneapolis songwriter Gretchen Seichrist and her band have developed a variety show they will unveil at the Loring Theater on Saturday. MPR’s Chris Roberts will have a profile.

  • matt

    If the lenders were not smart enough to protect their investment then they deserve to lose. If you aren’t paying for your house and you know it you shouldn’t be arguing the matter, get out. Solomon says cut the houses in half and I agree.

    I find it amazing that now the Federal Govt is seeking to sue the banks for the housing mess…after giving them trillions in aid because of the housing mess. Way to get tough Washington, I guess all the banks will know who is charge and they will never bilk the taxpayers again.

  • Bob Collins

    Ever notice how one of the most coveted committee assignments is on the banking committee?

  • Sam

    I try very hard to not engage in conspiracy theories or assume that people wealthier than me are somehow evil by virtue of their wealth, but I must say, the behavior of the financial sector in this country seems to be so far out of control that the conspiracy theorists start to sound reasonable.

    I happen to be acquainted with a couple of powerful Minnesota bank CEOs, and have noticed that they’ve become fond of making sweeping pronouncements like, “Look, the whole economy tanked and the markets dived. That wasn’t anybody’s fault – it’s just a thing that happened.” Well, no. It’s a thing that happened because you and others like you engaged in shady business practices which, when exposed, caused the markets to dive. Then you needed millions of people like me to bail you out because the politicians who protect you from any legal need to behave like responsible corporate citizens had stripped away the rules saying you couldn’t grow so big that the country would fail if you failed. And then you bullied those same politicians into watering down any new regulations designed to force you back into responsible business practices, and kept right on doing what you’d been doing before the crash.

    That’s not nobody’s fault. That’s your fault. And it’s time we as a country started openly saying so, and holding some powerful people legally accountable for it.

  • Al

    I just don’t get how these bankers aren’t prosecuted for fraud. You have listed a banker with an actual name who signed the document. Where is the prosecution? I work as a scientist in a highly regulated industry. If the regulatory agency came in and found I was falsifying data I am certain I would be prosecuted. Why do bankers get a pass? I would think these documents would be easy to find and filled with signatures of real people who signed them. By taking a pass on them now we are setting up the next scandalous collapse.

  • Jim Shapiro

    A bank is a place that will lend you money if you can prove you don’t need it.

    Bob Hope

    A banker is a fellow who lends his umbrella when the sun is shining and wants it back the minute it begins to rain.

    Mark Twain

    I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

    Thomas Jefferson

    It is easier to rob by setting up a bank than by holding up a bank clerk.

    Bertolt Brecht

  • The Bank is a Skank

    ///I find it amazing that now the Federal Govt is seeking to sue the banks for the housing mess…after giving them trillions in aid because of the housing mess. Way to get tough Washington, I guess all the banks will know who is charge and they will never bilk the taxpayers again.

    I guess that’s what happens when Cousin Politician does a favor for Cousin Banker. It gets messy.

    And it is going to be alot more like this. Where greed tries to take over the Truth steps in and shines a light on the dishonesty.

    I hope that there are alot more lawyers trained in fraud like this woman so that they can help the millions who are wrongly losing their homes.

  • The Bank is a Skank

    I wonder if that small scale earthquake we experienced last year had anything to do with the oil drilling in North Dakota?