DirecTV Enters into Multi-State Consent Decree

-agrees to pay almost $14 million for deceptive practices

For all you consumer lawyers out there, raise your hand if you've had a DirecTV complaint. Okay, you can put your hands down, you're generating too much of a breeze. For the life of me, I've never understood how a company that treats its customers the way DirecTV does stays in business.

In the settlement with 49 out of 50 (or all 50 depending on the source) of the attorneys general plus the District of Columbia, DirecTV has agreed to pay $13.5 million in fines and restitution, plus it has agreed to cease and desist a number of deceptive practices. Apparently there is or will be a procedure for getting complaints addressed and/or restitution through the attorneys general.

My biggest beef with DirecTV isn't addressed by the settlement, and that is is that they lock you into a multiyear contract, but it is not a written, signed agreement where the customer receives a copy. In fact, rarely is there ever a written contract. I have alleged repeatedly that failure to have a written contract that lasts more than one year is a violation of the statute of frauds (at least in Indiana). The $29.95 (or whatever) package is rarely available. Local channels are hit and miss. Usually the service works fine in the rain, but for some reason, some customers never get their dish to work in the rain, and it's tough luck for them. When you change your service, they often sign you up for an extended contract, sometimes without disclosing that to the customer. When you turn in the equipment, they must have a special department dedicated to losing the equipment; and the people in this department are far better at their jobs than the three people that staff the customer service department. (I estimated the number of customer service employees based upon the quality of the customer service. I could be off by one or two.)

Now it's time for my marginally relevant video of the day. It's more than marginally relevant today, however. It's dead on. I don't know this guy from Adam, but his story is typical of the complaints that I field against DirecTV, often several times a month.

Robosigning Moves to Credit Cards

Chase is implicated by a whistleblower

If you have been following the robosigning controversy in the mortgage industry, it should come as no surprise that there are allegations of fabricated documents in the credit card industry as well. Linda Almonte, a former Chase employee, is suing the bank for wrongful termination. Also, she has apparently made a whistleblower complaint to the SEC alleging the fraudulent document practices of Chase give rise to liabilities which would/could result in inaccurate financial statements. Here are the allegations in Ms. Almonte's letter to the SEC as published by dailyfinance.com.

1. Chase Bank sold to third party debt buyers hundreds of millions of dollars worth of credit card accounts. . .when in fact Chase Bank executivesknewthat many of those accounts had incorrect and overstated balances.

3. Chase Bank executives routinelydestroyedinformation and communications from consumers rather than incorporate that information into the consumer's credit card file, including bankruptcy notices, powers of attorney, notice of cancellation of auto-pay, proof of payments and letters from debt settlement companies.

4. Chase Bank executivesmass-executedthousands of affidavits in support of Chase Banks collection efforts and those Chase Bank executives did not have personal knowledge of the facts set forth in the affidavits.

5. When senior Chase Bank executives were made aware of these systemic problems, senior Chase Bank executives -- rather than remedy the problems -- immediatelyfiredthe whistleblower and attempted to cover up these problems.

If you are litigating a collection defense case on a Chase account, you should read the complete Almonte letter to the SEC, published here. It describes in detail the review process that the accounts should go through and the defects in the system that were the subject of the whistleblowing claims.

Lender Processing Services - The "Dirty Tricks" Link to the Mortgage Crisis?

If you do foreclosure defense work, or if you are just interested in what's going on with the mortgage meltdown crisis, then you need to read this December 6, 2010 article by Scot Paltrow of Reuters, Special Report: Legal Woes Mount for a Foreclosure Kingpin. This is an almost 4,000 word article with no fat in it, and that's why it is a must-read. Lender Processing Services (trading as LPS) is a $2.8 billion company that hardly anybody has heard of outside of the mortgage servicing industry. LPS performs a variety of backroom processing tasks for lenders, servicers and securitized trusts, but what it is getting in trouble for is its foreclosure processing services. Whistleblowers have alleged a pattern and practice of falsified affidavits prepared in the context preparing mortgage foreclosure cases. Now the company is the subject of multiple criminal investigations and several class action lawsuits have been filed against it.

According to the Reuters article, 14 of the 15 biggest loans servicers use LPS for processing tasks, and Bank of America (because there's no sinking ship that's too far gone for BofA to jump on) started using LPS earlier this year.

Consumer lawyers need to be aware of LPS's computer network called the "LPS Desktop". According to Routers, the LPS Desktop "starts foreclosure actions, assigns work to law firms and supervises the cases to conclusion with almost no intervention by humans." LPS chose the law firms used to file the foreclosure cases. In part, the firms were chosen based upon how fast they could get the cases filed, impliedly, firms that took extra time to verify information given were locked out of the system. The LPS computers took data directly from the lenders, integrated it with LPS's document handling (and manufacturing) and forwarded the information electronically to the chosen law firms. The law firms pay LPS upon receiving the case. Now, it's illegal in most states for an attorney or law firm to pay a nonlawyer for referring a case. LPS says that the law firms are paying for use of the computer system, but if the lawyers don't pay if business is not referred, or pay more when business is referred, that doesn't seem too supportable.

If you are a consumer lawyer defending a foreclosure case, I suggest that you submit an interrogatory asking if the foreclosure form or its client used computer system or software by Lender Processing Services in preparing the case for litigation. If so, then you have the basis for further investigation.

Surviving the Holidays

Coolest Christmas Lights of 2010?

Willow Run to Stop Running December 23rd

Annarbor.com reports that the giant GM manufacturing complex in Willow Run, Michigan will be shutting down completely, and probably for good on December 23rd. This plant was a hallowed example of the high point of U.S. manufacturing might. Five million square feet under roof (1 story). The plant was built by Henry Ford to turn out B-24 bombers in World War II. Turn out bombers it did, 8,685 to be exact, with a bomber heading out the door every 55 minutes during peak production. In 1953, Willow Run was bought by General Motors because a nearby transmission plant was burnt in a fire. GM kept part of the plant in operation since then, and just a few years ago retooled part of it to build 6-speed transmissions.

In the GM bankruptcy, Willow Run was included in the "Old GM" inventory, and its closing became inevitable.

I can't help thinking as we lose each piece of the arsenal of democracy, with the pieces not being replaced, that the United States is that much weaker as a country. That's why the closing of this plant is especially sad to me. We won't ever need B-24 bombers again, but whatever we do need we might not be able to build.

Taiwanese Take on American Politics

This video is from Taiwan's NMA network.

Publish Post

Wal-Mart is Slashing again - WAGES

As our well-meaning but misguided President breaks all negotiating and budgetary rules in an attempt to get a few dollars in the hands of the people who need it most, the corporate ogres are once again snatching those dollars away in the race to the bottom.

Wal-Mart announced today that it is ending a $1.00 per hour premium for employees working a Sunday shift. It's about time. I mean, everybody knows those Wal-Mart workers were just way overpaid. As if it made a normative difference, a Wal-Mart spokeshole said the new rule applies only to workers hired after January 1, 2011. This is part of CEO Mike Duke's push to reduce costs (and employee solvency) at Wallyworld.

Hmmm, If Sir Duke want's to reduce costs, why doesn't he start with his salary? It took seconds to come up with this story on the web from ABC News commenting that Mike Duke, with his $35 million salary makes more in an hour than some Wal-Mart workers make in a year. Let's say he cut his salary down to the barely livable $10 million a year, that $25 million could pay the Sunday $1.00 stipend for an entire year of a football stadium full of Wal-Mart workers, 60,125 workers to be exact. It sure would be great if 60,125 workers showed up on Duke's doorstep one Sunday morning to remind him of this. Michael Moore, are you listening? Hint, hint.

Obama & Repubs Make a Deal

Richies keep tax breaks - unemployment bone thrown

President Obama was ridden hard and put away wet in the fight over the Bush tax breaks. Word tonight is that the President agreed to a two year extension for everybody including the richest folks. In exchange he got a 13 month extension of unemployment benefits (that the Republicans will brag about too), a partial payroll tax holiday (ditto) and some miscellaneous stuff to junk up the tax code. There's nothing to help the deficit and nothing to get us on a firmer footing over the long term. In other words, the President punted. Really, this isn't even a punt, it's more like a Garo Yepremian pass.

Why is it important? Just the tax cut for those earning over $250,000 per year accounts for a loss of $60 billion in revenue. Per the New York Times, that's enough to pay for free college including room and board for half of the 2 and 4 year college students in the United States. It's enough for universal preschool for 3 and 4 year old children and a lot more. Check out the NYT article.

So now it's time for the marginally relevant video of the day. In the spirit of President Obama's Let's Make a Deal. Here is an assortment of similar deals from my old role model, Monte Hall. (If only I had his fashion sense.)

Theme Day - Movie Trailer Sunday

Last weekend, I went to see Harry Potter and the Deathly Hallows, Part I at the theater. There's not much to say about this movie except it's a lot better than the last installment, Harry Potter and the Half Blood Prince. The last installment was so rushed it was barely comprehensible even to anyone who has read the book. The filmmakers made the correct decision to split the Deathly Hallows book (the last of the series) into two movies. This has the natural consequence of making the first of the two movies seem incomplete -- which it is. Now for the real subject of this post, the trailers.

There were a bunch of interesting trailers before the movie. Trailers that were in some ways more interesting than the movie itself. Through blogging magic, I'm going to invert the order of these postings to put these trailers in context.

The Battle of the Greens:

Green Hornet vs. Green Lantern - which do you prefer?

At HP&TDH, back to back, they played trailers for the Green Hornet movie and the Green Lantern movie. Both trailers look better than I would have expected. Seth Rogan was a controversial decision for the Green Hornet role. From the trailer, it looks like he pulls it off. Ryan Reynolds, the "sexiest man alive" seems to do fine as the Green Lantern. The Green Lantern was deemed unfilmable before modern special effects technology. On Youtube there are some very well-done fan trailers that were made prior to the GL movie.

WTF? Cowboys vs. Aliens

I didn't even know this movie was in production. Harrison Ford and Daniel Craig star in the first space western actually set in the Old West. There's more audacity in this trailer than there has been in the first two years of the Obama administration.

New Yogi Bear Trailer - Better, but Good Enough?

Back in July, I posted the first Yogi Bear trailer. I called it crap. I don't know whether Dan Akroyd's Yogi Bear impression got better, or if I just got used to it, but this trailer is better; and since I grew up with Yogi Bear, I'd probably rent this movie. I'm not paying the big bucks to go see it, especially in 3D. I hope all the funny jokes aren't in the trailer. The movie comes out December 17.

From the wtf fie:
Fiat and Chrysler to Build Jeeps in Italy - And Export Them to the US

There were rumors of this last week, but I guess now it's offical because it's in the Automotive News. Fiat and Chrysler are going to jointly invest $1.3 billion into a plant in Italy to make vehicles under the Jeep and Alfa Romeo brands. The upgraded facility would have a capacity of up to 280,000 vehicles per year and will employ up to 5,600 workers. In other words, it's a big factory. Some of the production will be assigned to Jeep models to be exported to the US.

It's interesting to me that this press release came out over Thanksgiving weekend. It appears that the UAW hasn't had time yet to react in an organized way to the press release. Personally, I have a hard time with this, since Fiat stands to get a third of Chrysler without investing any money. The whole purpose of the deal is to save jobs and industry in the US. Chrysler's reinvestment in North American built products is not complete, yet capital is somehow available to build cars in Italy.

Leslie Nielsen Dead at 84

Thanks for the comedy, Leslie.

The Thief that's Stealing your Processor Cycles

Windows 7's wmpnetwk.exe

I spent most of my morning today trying to wrestle Windows 7 back to reasonable performance. My performance meter showed the processor was working hard all the time. Also, over time startup performance has deteriorated, shutting down, going to sleep and waking up became slow and iffy propositions.

When I looked into it, it soon became clear that my year old Windows 7 laptop had two major problems. The first had to do with ill-behaved drivers for my HP-8500 series printer. Setting the drivers to not install at start-up seemed to solve that problem.

The second problem was more invidious and more difficult to solve. In fact, I still don't have it solved. It involves Microsoft Media Player. More particularly, a "service" file in the Windows registry called wmpnetwk.exe. According to my research, this program allows your PC to share media files over a network. You know, like the guy on the Windows commercial who carries his laptop all over the house. Apparently, it has been common knowledge for years that for this marginal bit of utility, this program can take half or more of your processor cycles all of the time. A Google search returned over 48,000 hits for this search

problem wmpnetwk.exe windows-7

Like Hal-2000, this program refuses to just let you turn it off. You can go to the resource monitor and try to turn it off all day long and it refuses to budge. I got it turned off through the Task Manager. Windows 7 has a built-in utility player called services.msc. With that program, you are supposed to be able to set the various service programs to automatic, automatic (delayed start), manual, or disabled. I used services.msc to return wmpnetwk.exe to "manual", restarted, and low and behold, the freaking program ignored my instructions and started automatically again.

I still don't have the problem completely solved. I know now though that if my process meter shows 55% of the cycles used when I'm not doing anything, I need to go to task manager and disable wmpnetwk.exe. I also know that if I do that, I'm unlikely to suffer any ill consequences. That's better than nothing. I hope that Microsoft has a service pack for Windows 7 on the way that will resolve this issue. So far Microsoft's response is bringing truth to the proverb, "once you go mac, you don't go back."

Here's a very relevant video I found on Youtube.

Take a Pass on the American Express PASS card

American Express has been heavily promoting its PASS reloadable debit card. It's a card aimed at teenagers. American Express sent me a mailer with what looked at first glance to be an attractive offer. Here's the pitch, sign up for an American Express PASS debit card for your teen, load it with at least $25.00, and when you reload the card, you'll get a free $25.00 credit with their promotion code getpass25. What's the catch? The most obvious one is the $3.95/month fee, but the fee is suspended until October 1, 2011, and you can cancel before the fee kicks in. Another catch is the $1.50 ATM withdrawal fee, but that's livable. The dealbreaker for me involved privacy. In the application,they want your teen's name and date of birth. They also want the teen's cell phone number and the express permission for American Express and its affiliates to send text messages whenever they want. They want the parent's date of birth, social security number and cell phone number.

In other words, this is a card where the company is making a $25.00 bet that you're too busy or stupid to cancel the card before next October. In the meantime they are likely to cost you money with text messages; and who knows to whom they'll sell (or barter) your and your child's personal information. There's no such thing as a free lunch. My family's privacy is worth more than $25.00.

Now for the marginally relevant video of the day. The subject is PASS. The video is This Too Shall Pass by Ok Go. I've always loved Rube Goldberg Machines, and this is the best one I've ever seen.

We might as well make this a "Dramatic Reading" Theme Day

And They Say the Art of Writing Letters is Dead . . .

If you've ever seen a Ken Burns documentary, two things stand out: the first is the cinematic style of zooming around the image of a still photograph, and the second is the lost art of letterwriting, as a famous actor reads a well-written and heartfelt missive. (I just wanted to use the word "missive".)

Well, Buckos and Buckets, letter writing isn't dead. Here's a letter from the Civil War, the famous Sullivan Ballou letter.

Okay, that's a pretty high bar when it comes to the art of correspondence. Now let's see what a modern writer can do with all the technology of the modern day.

More Senior Citizens "Dying with Debt" - USATODAY

Per a recent article in USATODAY, more senior citizens are deciding not to pay off their credit cards - ever. The plan is to die owing the money. This is not a new strategy. I have been advising some clients this strategy for years. The strategy only makes sense because the credit policies of giant creditors don't. To give an 80 year old a large credit line based on a simple FICO score completely ignores a substantial possibility that he or she may not have the incentive or ability to pay off a multi-thousand dollar unsecured credit line before his/her natural life expectancy ends. If this seems harsh, or even unethical, consider what has been the alternative. Many of these same seniors have been talked into disastrous home equity loans, equity stripping loans, that they can't afford, just to pay off credit cards. Clearly, the lesser of two evils is to pay what they can on their credit cards, even if it is the minimum payment or less. If the senior citizen leaves an insolvent estate, then the creditor should have thought about that before granting the credit.

Obama and Biden Go to Kokomo
Plus - an update on the Tipton transmission plant

It must be Take Your Vice President to Work Day. It's slightly after noon, and as I write this, President Obama and Vice President Biden are likely on their way to a rare joint appearance at a Chrysler Transmission plant in Kokomo, Indiana. Sharing the bill with them will be Chrysler Group CEO, Sergio Marchionne and UAW President, Bob King. They are basically taking a victory tour of Chrysler post-bailout. While Chrysler is not completely out of the woods, I've got to say that I'm amazed at how smoothly Chrysler's revamping of its existing product lines has gone so far. I guess that goes to show just what you can do when you actually pay your suppliers.

Even though Kokomo has no final assembly plants, Kokomo might be the more economically dependent on Chrysler than any other town in the country. Chrysler employs 4,500 workers in this city of 48,000. There is no question that the auto bailout saved the city from economic ruin.

The President is on hand for the expected announcement of roughly $1 billion in upgrades to the existing Kokomo transmission facilities. The Kokomo plants are expected to be reconfigured to produce an advanced automatic transmission for front-wheel-drive vehicles. The current product line focuses on trucks and rear-wheel-drive cars. A few years ago, old-Chrysler partnered with German firm Getrag to build a brand new plant in nearby Tipton, Indiana to produce advanced dual-clutch automatic transmissions. If things had gone as planned, those transmissions would be in Chrysler vehicles today. With the help of government incentives, the plant was completed, at least externally, but no production equipment was installed. There was an ongoing dispute between Chrysler and Getrag regarding who was supposed to pay for the equipment. From the perspective of this outsider anyway, it appears that neither Chrysler nor Getrag wanted a partner, they were both looking for a sugar daddy. By 2008 both companies had backed out of the deal, each throwing stones at the other. Within months, both companies would be bankrupt. At last report, the Tipton factory was sitting vacant, owned by a constellation of unpaid contractors. There was pending deal to sell the facility to Abound Solar, for the purposes of making solar panels. This deal was on hold as of November 19, 2010 due to a slight problem, no money had shown up.

Anyway, what a treat to have both the President and Vice President come to your plant on a work day. There are some who will say it's risky having both the President and the Vice President making a joint appearance. I can't say that I didn't think of the risk. Then I realized, out of the finite universe of individuals who would wish harm on the President and Vice President and try to carry it out, how many of them do you think would actually prefer Nancy Pelosi?

Sing us out, Kermit.

Netflix Raises Prices $1.00/month
More Bucks for More Crap, But Interesting Crap

Netflix Raises Prices $1.00/month. Not much of a headline, I know. The only reason I post it is that I'm watching Netflix as I watch this. Netflix's streaming service has a reputation of having a lot of crap. It does, but some of it is interesting anyway. I'm watching a documentary, Who is Harry Nilsson. What a strange dude. He brought in a busload of pensioners to record a song, I'd rather be dead than wet my bed. To prove you can find anything on youtube, here's the song from an earlier documentary called Did Somebody Drop his Mouse?

The Fraud at Bank of America Keeps on Coming
Countrywide Held on to Notes it Should Have Transferred.

According to an article in American Banker (subscription required, so I'm linking to Max Gardner's blog entry discussing it), a Countrywide Finance employee testified that Countrywide (since taken over by Bank of America) would routinely hold on to mortgage backed notes that were supposed to have been transferred in loan securitizations. In my post of November 16, I talked about how proper transfer of the note is crucial in a foreclosure case. If the borrower pays somebody other than the holder of the note, the borrower may be liable to pay twice. This danger is compounded in mortgage securitizations. Unless the notes (endorsed in blank) are transferred to the trustee of the mortgage security, the same loans could be bundled into multiples of mortgage securities. It doesn't take a genius to figure out that if this practice is widespread, confidence in mortgage securities could plummet.

It's clear to me that the corporate culture of dishonesty that permeated Countrywide has infected Bank of America to the core. It's time for Bank of America to be placed under receivership. Interestingly, the loan in question in this case was subject to a lost note affidavit in a previous proceeding. All of a sudden the note showed up again. That brings us to our marginally relevant video of the day, Baby, Now that I've Found You (I can't let you go) by the Foundations. What I found is interesting about this song is that almost everybody is familiar with the Foundations' other hit, Build Me Up Buttercup, and they forget about this song even though this was a top 10 hit in the US. I guess we'll have to wait for There's Something About Mary II.

Big News in Hanford Washington - Radioactive Rabbit . . .
. . . AND MOUSE


The Seattle Times reports that workers at the nuclear facility in Hanford, Washington have come across radioactive rabbit droppings and mouse droppings. They shot one rabbit that was radioactive, but they haven't found any glowing mice yet. Maybe they're not looking in the right place. They're looking down, and maybe the mouse they're looking for is six stories high.

Somewhere in an alternate universe, I imagine teenaged Peter Parker, on a fieldtrip to the Hanford Facility, getting bitten by a radioactive rabbit. Peter would then obtain super powers. He could sire 2000 offspring per year and s--t little pellets. That's about it, actually.

The Congressional Oversight Panel and the Mortgage Documentation Mess
Show Me the Note

The Congressional Oversight Panel, convened in 2008 to review the Treasury Department's response to the financial crisis just released a 125 page report on the scope of the mortgage documentation controversy. Of course, I haven't read the 125 page report, after all, there are videos of cats staring down alligators to watch, but CNN Money says the following: (Nested quotes are left in just to show how lazy all layers of reporting are in this day and age.)

While the report acknowledged that the scope and the consequences of controversy remain unknown, the panel warned that the financial system could be at risk if the allegations of "robo-signing" are proven to be true.

"If documentation problems prove to be pervasive and, more importantly, throw into doubt the ownership of not only foreclosed properties but also pooled mortgages, the consequences could be severe," the report said.

The panel suggested that stress tests would be in order for certain institutions with large exposure to high risk loans. Yes, Bank of America, we're looking at you. (See William K. Black and L. Randall Wray's October 22, 2010 essay in the Huffington Post, Foreclose the Fraudsters, Part 1: Put Bank of America in Receivership.)

Let me just say this about the Congressional Oversight Panel. It may seem like they did a deep and thorough analysis of the problem, but when you give it even a cursory glance, you can see they just punted and didn't really issue a usable opinion at all. Imagine that you had a bunch of money that you didn't need, and you decided that you would hire an oversight panel to look at a particular problem and write a report, let's say, a concise 125 page summary. So you give a bunch of experts a bunch of money, and two years later they write a report that says this problem could either be something that will crash the entire US financial system, and maybe the world's, or it could be no big deal. If you paid the money, wouldn't you think you were a bit cheated? Guess what, you did pay the money. You were cheated.

The strange thing is with all this talk about robosigning of documents related to the mortgage, very little is being said about the promissory notes that comprise the actual promises to pay. Without the notes, the mortgages are useless. The geniuses behind the MERS system for putting mortgages in the hands of nominees omitted the duty to track and properly assign the promissory notes.

One of the highlights of the NCLC conference last week was the speech by negotiable instruments expert, Professor Douglas Whaley. His speech focused on what he calls "The Sexy Promissory Note". I don't have to summarize it because he has published a somewhat shorter version of it in his blog, linked here. The bottom line to Professor Whaley's speech is that a lawyer representing a consumer defending a foreclosure, and in some cases, even a consumer acting pro se, should demand presentment of the original promissory note as a precondition of foreclosure. That promissory note should show a clear chain of endorsement from the originating mortgagor to the current claimed assignee. Absent such evidence, the court should not allow foreclosure to occur. When a note is claimed lost, there is no presumption of validity, and the claimed owner must show evidence for each transaction in the chain of title, and in some cases must post a bond to protect the mortgagor from multiple claims of ownership.

Now it's time for the segue into our marginally relevant video of the day. In 1970, 20 year-old Stevie Wonder had a huge #1 hit with the song Signed, Sealed Delivered (I'm Yours), a song he wrote with his wife, his mother and his regular songwriting partner, Lee Garrett. If a blind singer barely out of his teens could figure out the concept of signed, sealed and delivered, why couldn't the professionals that were being paid big money to set up mortgage securitizations? Now I could post one of half a dozen Stevie Wonder versions of this song, or one of several that he does as duets with other artists. I could post Peter Frampton's #18 hit. Perhaps the #11 British chart hit by Blue. Nope, too easy. Here's a version of the song done in 1970 by a then-unknown singer named Elton John. In those days, while he was waiting for his first crack at solo success, Elton paid the bills by recording "sound alike" versions of current hits. Some of them are complied in an album called Legendary Covers including this version of Signed, Sealed, Delivered. You should be glad I didn't post Elton's version of Young, Gifted and Black.

2011 Chrysler 200
Better, Duh!

More complete information and full photo sets of the 2011 Chrysler 200 are now circulating. The Chrysler 200 replaces the less-than-successful Chrysler Sebring. Under Cerberus, Chrysler was starved for product development money, and the Sebring was one of the vehicles most affected. Post-buyout, the Sebring needed to be replaced, like yesterday, but there wasn't the time or money to do a complete do-over. Under the circumstances, new Chrysler has done a good job putting new flesh on old bones. The moderate reskinning of the old Sebring platform renders the 200 basically inoffensive even if it isn't a raging beauty. The old hard plastic interior has been thrown out, and soft touch plastics now predominate. The biggest change is in the powertrain. Chrysler's new Pentastar V6 is the optional engine, with a new 6-speed automatic transmission. The base engine is the carryover 4-cylinder engine, but a six-speed transmission is available even with the 4-cylinder. Virtually all of the auto sites are running stories on the 200. Here's a link to Autoblog's

Mortgage Securitization - A Case Study

Dan Edstrom, of DTC Services, performs mortgage securitization audits. He prepared the chart below showing how his own mortgage was securitized. I tried to explain the diagram, but I ended up just improvising "do a head fake, and go long."

Source zerohedge via huffpost.com.

Cat vs. Alligator

Fannie Mae to Stern Law Firm: You're Fired
Foreclosure Mill Faces its Demise

Fannie Mae sent a letter last week to all of its affilliates servicers telling them to immediately take Fannie Mae loans out of the hands of the Stern Law Firm. If you're not familiar with the Stern firm, it's a Florida based "foreclosure mill" firm that has been at the heart of controversies involving robosigned and otherwise questionable documents.

DJSP Enterprises, a publicly-traded company set up to do the back office processing of the Stern cases immediately announced a lay-off of 435 of its 1,600 employees. It was once the 9th largest employer in Broward County (Ft. Lauderdale), Florida. DJSP's major subsidiary, DAL Group LLC defaulted on a $12 million line of credit with Bank of America. Bank of America, of course, is into the foreclosure mess up to its proverbial corporate eyeballs.

Are Potterheads Nerds?

I have often wondered whether it is fair to call serious Harry Potter fans "nerds". There are similarities to typical nerds, but there are differences as well. Potterheads read actual books on paper that don't have the word "Star" in the title. Here on the eve of the opening of Harry Potter and The Deathly Hallows, Part One, Daniel Ratcliffe deposits a solid of helping of evidence in the "pro" category of the nerd debate by reciting Tom Lehrer's Element Song from memory. Pretty impressive.



BUT is it more impressive than Al Franken drawing a map of the United States from memory?



Is Al Franken a nerd? Just because you're smart and you know a good party trick, that doesn't make you a nerd, right?

Tomorrow Never Knows

Will Apple announce tomorrow (Tuesday 11/16/2010) that iTunes will (finally) be getting Beatles music?

Congratulations, Rand Bragg

Rand Bragg was awarded the Vern Countryman award for Consumer Advocate of the Year by the National Association of Consumer Advocates. Rand currently is of counsel for the Horowitz, Horowitz firm in Chicago with a practice specializing in Fair Debt Collection Practices class action cases. Many years ago, Rand was the litigation director of UAW Legal Services Plan. I met Rand when I was in private practice quite a few years before I came to UAWLSP. Rand was a very important early mentor for me. He gave me some important tips on case selection, helped me learn about class actions. He was always a gentleman, never condescending, and he never asked anything in return for any of the advice he gave me. Congratulations, Rand, this is an award you truly deserve.

How We Doin?
Update on Mortgage Foreclosure and Modification Statistics November 2010

I'm blogging from the National Consumer Rights Litigation Conference in Boston. Professor Alan White will be giving his presentation on the latest statistics regarding foreclosures and mortgage modifications. Last year, the the numbers showed that the HAMP program was barely putting a dent in mortgage foreclosures, and the problem was growing. We'll see how the situation is changing.

Since the remarks at the conference are supposed to be "off the record, I'm not going to post details. By past practice the same data that he's discussing here will be distributed in a published report within a few days. Here's a link to Professor White's website with monthly foreclosure reports.

Auto Fraud and the FTC
NACA is looking for complaints

With a Republican-controlled Congress, consumer advocates expect that there will be very little new consumer-friendly legislation over the next two years. Luckily, the Consumer Financial Protection Act was passed this year, and the Consumer Financial Protection Bureau (CFPB) was established. It will take about a year for the CFPB to be set up, and at least another year before the agencies new rule-making authority can bear fruit, at least on big issues. That being said, the Federal Trade Commission is still in business, and the FTC is collecting information on auto fraud. In July, the FTC gets APA rulemaking authority over car dealers, this authority was the quid pro quo that dealer lobbyists had to accept to get exempted from CFPB regulation. (The dealers' legislative victory may backfire. If they were covered by the CFPB, nothing would really be done for at least two years, and probably longer, because the banks and mortgage industry have to be fixed first.)

Even though the FTC is indicating a new activism, in recent years, when used cars complaints have been made to the FTC, they've tended to vanish, sometimes without even acknowledgement that they were ever received. The FTC blamed the lack of complaint information on defects with their Sentinel system, a system that has stayed rarely used and unfixed for years. With that in mind, the National Association of Consumer Advocates (NACA) is collecting auto fraud complaints from lawyers for forwarding to the FTC. Send your auto fraud complaints to autocomplaints@naca.net. In this particular case, NACA is looking for court filed (or arbitration) complaints alleging auto fraud complaints, primarily in .pdf form. Anything in the last five years is fair game.

2012 Hyundai Elantra to Get 40 MPG

According to Autoblog.com, the entire model line of the 2012 Hyundai Elantra will be rated at 40 mpg highway and 29 mpg city. This is quite the achievement because the Honda Civic and Toyota Corolla can't touch 40 mpg, and models of the Chevrolet Cruze, Ford Fiesta, and probably the 2012 Ford Focus will have 40 MPG highway ratings, but only for special high MPG subvarients.

The 2012 Elantra will be assembled in the United States and will use a 1.8 liter, 148 horsepower, 131 ft.lb. torque engine. That's more horsepower but less torque than the Chevrolet Cruze Eco, a direct competitor. Hyundai has been aggressively introducing new models lately, and some of the models have featured engines with fuel-efficient, direct-injected engines. Somewhat surprisingly, the Elantra engine does NOT feature direct injection. The Elantra will make its official debut at the Los Angeles Auto Show next week.

2011 Chevrolet Cruze Eco Rated at 42 MPG Highway

Great, but look out for the Elantra

Chevrolet has announced that the EPA has rated the Eco model of its 2011 Chevrolet Cruz Eco at 42 MPG highway. It will be rated at 28 MPG city. GM is skilled at getting good highway economy ratings for its vehicles. Special aerodynamic enhancements and the 138 horsepower 1.4 liter turbocharged engine (and a manual transmission) are the special sauce that delivers the good MPG. The non-eco version of car with the same engine is rated at 24/36, the Eco with an automatic transmission is 26/37. The price of the Eco with destination is $18,895.

As it so happens, a couple of weeks ago, I had my first opportunity to go out and test drive cars in about two years. I had two primary targets, the Ford Fiesta, and the Chevrolet Cruze. I drove the Fiesta, and it was a nice little car. When I went to the Chevrolet dealer to drive the Cruze, Icouldn't get the attention of a salesperson, or any employee for that matter, for the 20 minutes I was in the showroom and out on the lot. They had two locked Cruzes on the lot. One stickered at $22,000+, and the other stickered at over $24,000. The Cruze may be a nice car, but at those prices, they're going to have to "put some money on the hood" to get buyers in the face of stiff competition. Also, if the idea behind the dealer cull was to enhance the customer experience, it certainly didn't work in my case.

For more information, check out this post at edmunds.com.

Picture Chevrolet via Edmunds.com

Mortgage Servicers and Foreclosures
Conflicts of Interest Hinder Workouts

Diane Thompson of the National Consumer Law Center (NCLC) has been a key player in helping consumer advocates battle the mortgage foreclosure crisis. Not only has she conducted training sessions throughout the country, she has produced analytical and training material that are some of the best in the business. It looks like she's finally starting to get some due credit.

Pro Publica features Diane's analysis in an article highlighting problems with mortgage servicers, especially conflicts of interest. For some time, NCLC has made available Diane Thompson's white paper, Why Servicers Foreclose When They Should Modify and Other Puzzles of Servicer Behavior. This should be required reading for legislators and policy makers. Below is a table from the article that highlights some of the conflicts of interest involving servicers that are keeping our foreclosure rate high and our recovery rate low.

Is President Obama the Victim of Robosigning?

Michael Redan of 4closurefraud.org thinks so. He looked up two satisfactions of mortgage from President Obama's property and found suspicious signatures and notarizations.

General Motors IPO Going Forward
"American" Ownership Likely to be Reduced

The GM initial public offering is moving right along. The company would like to sell $13 billion worth of stock at about $26-$30 per share. There appears to be a pretty decent market for the stock. Several sovereign wealth funds, including that of the Kuwait government, are among the most talked about purchasers of stock. Another is the Chinese automaker SAIC which might drop several billion dollars on GM stock.

BoA is FoS
Bank of America: How Cooked Are The Books?

Jonathan Weil of Bloomberg.com writes that Bank of America may be headed for serious problems, perhaps another bailout, months after returning $45 billion in TARP money to the federal treasury.

The problem comes down to the accounting for BoA's purchase of Countrywide Financial.n BoA is still carrying $4.4 billion of "goodwill" on its books going back to the Countrywide purchase even though it is clear that Countrywide never had a positive value, and BoA has discontinued the Countrywide name. The investing community values the company at less than the book value of its assets, and the biggest reason is doubts over the real value of $141 billion worth of Countrywide loans in BoA's portfolio. In my personal experience dealing with borrowers with Countrywide loans in what is probably an average market (not California, Arizona, Nevada or Florida), the real asset value of the Countrywide loans that I've seen is less than 80% of face value. From first hand and anecdotal reports by homeowners trying to get loans modified, my general impression is that BoA is mostly uncooperative and forces foreclosures that are in nobody's interest. You can expect this story to develop further in the coming months.

The "Slurpee Summit"

The hot fluff news of the day involves President Obama's talk of sharing a Slurpee with the Republican leaders. There's no question that a Slurpee is a good way to unwind at the end of a hard day at the White House. Ask Bill Clinton.

Aircraft Carrier vs. Cruise Ship

Here's a neat video of the British aircraft carrier HMS Illustrious docked next to a typical (not the largest) cruise ship, the Celebrity Century. I never thought I'd see an aircraft carrier look tiny.
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Aircraft Carrier Versus Cruise Ship - Click here for funny video clips

Need to Get out of a Timeshare - It's Easy
- If You're Dead

I was forwarded a link to a fluff piece from television station WPTV6 in Palm Beach Florida. The purpose of the article is to warn viewers against scam artists who want you to pay money to sell your timeshare. That's good, but ending advice is very misleading. They quote a well-circulated 2006 article from SmartMoney magazine titled Escape from Timeshare Hell that says it's easy to get out of a timeshare. Here are the 4 steps that SmartMoney says you can use to get out of a timeshare:


* Ask the condo developer if it buys shares back.
* List with a Realtor.
* Rent it out.
* Donate it to charity, for a tax break.

Great advice, too bad the chances of it working are about the same as me flapping my arms and flying home from work. I've never seen a condo developer buy a timeshare back. I've never seen a reputable Realtor list and sell timeshares. The covenants generally keep you from renting it out; however for additional fees, you can enroll in a swap program. The few charities that dabbled in taking timeshares have largely stopped, and to the extent they take them now, you have to have everything paid and pay an outside company a service charge to take the timeshare.

The Great Recession has really hammered timeshares and timeshare investors. Many of the "resorts" are on the Gulf of Mexico. Between oil spills and hurricanes, the resorts have faced huge capital expenditures and reduced tourism. This results in higher annual assessments. The annual assessments as well as a poor economy cause owners to default on their timeshare payments. This, in turn, can result in a death spiral where more and more expenses fall on fewer and fewer owners.

I've had more and more clients call with vexing timeshare problems, and I am convinced that there is no difference between a timeshare and a roach motel. You can get in, but you can't get out. The best solution that I've found is, believe it or not, to give the timeshare to a dying relative, a relative who isn't going to leave an estate, make sure the timeshare is transferred on the books of the resort to the relative, and when the relative dies, the timeshare problem dies too.

In my opinion, when it is up and running, the Consumer Financial Protection Bureau should take a very close look at timeshares. The ownership interests actually have more in common with securities than traditional land ownership. The perpetual obligations of timeshare ownership are unconscionable even if the other terms aren't.

Instead of the bad story from WPTV, I'm embedding a youtube video of a Nightline feature on the problems with timeshares.

Lindsay Lohan Can't Afford Rehab

This is a few days old now, but it was reported that Lindsay Lohan can't afford the court-ordered rehab at the Betty Ford Clinic.

If she can't afford the Betty Ford Clinic, maybe she can afford the Gerald Ford Clinic.

John Stewart: Restoring Sanity with Autotune

Chinese Car Sales to Set a New World Record

Going into 2010, no nation exceeded the number of cars sold in the US in 2000, roughly 17 million. This year China is on target to match the 2000 US figure, and China should top 19 million next year. This is according to Autonews.com. Right now, it looks like the total US light vehicle sales for 2010 will come out to about 12 million, so China is blowing away US sales right now.

In the short term, the growth in the Chinese market is good news for General Motors. GM can use profits from China to pay off pension and other obligations in the US. In the long term, though, the growth of the Chinese market is problematic. Over the next 20 years, Chinese car sales could hit 50 million per year. Keep in mind that although most US car sales replace a vehicle taken off the road, in China, most of the new cars sold will become an additional vehicle in service. This means that each vehicle sold in China will amount to more competition for the global oil supply and will produce more emissions contributing to global warming. In short, the closer China comes to US consumption patterns, the more Americans will have to conserve to keep from outstripping our resources.

Also, as China produces more units than the United States, China will increasingly see new economies of scale and will benefit from the learning curve cost declines on new technologies. In short, the same advantages that the US automakers had until recently will start working to the advantage of chinese manufacturers. This would be in addition to lower cost labor and newer factories. It will increasingly be difficult to maintain a domestic automobile industry while following a free trade economic policy.

Happy Halloween

Here's an excellent version of Time Warp from Glee's version of the Rocky Horror Picture Show. This post is dedicated to Pat K., my friend from high school and college, who found fame maybe not fortune as Riff Raff in West Lafayette, Indiana in the early 1980s. The Glee Horror show can be watched for a while on Hulu.com at this link.

Gran Turismo 5 - Fast But Late

When I was trying to figure out which game console to get "for my son" last year, there were three reasons I picked the Playstation 3: (1) Blu-Ray; (2) Free online play and (3) Gran Turismo 5. Gran Turismo 5, or GT5, is an uber racing game with graphics to die for. There's only one catch: it was supposed to be out about two years ago, but it's still MIA. As of the summer of 2010, it was supposed to be released November 2, 2010, then October 13 release was set for "this holiday season". Even though ads from Sears & Target, etc. say to pick up the game there on November 2 (Tuesday), the latest word on the streets is that the game won't be available before January 1, 2011. Despite the lack of Indycars in the initial release (serious bummer), I'll probably lay my money down anyway (for my son, don't you know).

How to Kill a Pontiac

You can count me among the dissenters who never thought General Motors should have killed the Pontiac division in the first place. If you are going to kill a Pontiac, you should do it with style, so this is how GM should have done it, with a 1,200 pound pumpkin.

Allied Interstate Settles with the FTC
Agrees to Pay $1.75 Million Fine

More good stuff from collectionscreditrisk.com, Allied Interstate, Inc., one of the biggest collection agencies, agreed to pay $1.75 million, one of the biggest administrative fines for violating the Fair Debt Collection Practices Act. Specifically the fine was tied to efforts to collect debts from the wrong person, but the consent decree covers other practices as well.

I most commonly run into Allied Interstate when I have a client who has a dispute with DirecTV. After I dispute the matter with DirecTV, they send it to collections, often to Allied Interstate. Usually after a follow-up dispute and request for validation to Allied Interstate or the other collection agency, the claim goes away. Sometimes you have to pick it up again at the credit reporting level, and that gets to be a hassle. IMHO, the company the FTC should be going after is DirecTV. Their advertising, sales, billing, and collection practices are atrocious.

On the subject of debt collections: Our Video of the Day is this clip on abusive debt collections from ABC's 20-20. (By the way, if there's one thing these calls have in common it's that the consumer was smart enough to record the call and save the recordings. If you didn't tape it - they didn't say it.)

It's Chevy Volt Week

This week marked the end of the press embargo on driving impressions of the Chevrolet Volt extended-range-electric vehicle. Just about every auto site has a Volt review. Here's one of the better ones from autoblog.com. I'd love the chance to drive one, but I don't want to work for auto-writer wages.

Credit Card Companies Are Thriving Despite Card Act

When Congress was considering tightening the leash on credit card companies with legislation that eventually became the Card Act, the credit card companies whined about how limitations on their practices and default fees would cause massive financial losses. Here we are a few months down the road past the effective date of most of the Act, and in fact the credit card companies are thriving. According to Collections and Credit Risk, charge-off's (losses from defaulting accounts) have gone down by double-digits at major lenders.

I think what the lenders are seeing that if you are fair with the customers, the customers will to their best to make sure that you get paid. If you are unfair, John Q. Public will get mad and give up or get even. We may be seeing some of that sentiment in the mortgage markets. People who got screwed by mortgage brokers and lenders are getting payback by squatting in the homes for months without paying. These same borrowers would likely pay a reasonable rental or mortgage payment for the home based on the home's current value, but since that's not offered, the borrowers don't pay at all.

Happy 40th Birthday Chevrolet Vega

The Chevrolet Vega was introduced 40 years ago this year, and Popular Mechanics has a feature story called How the Chevy Vega Nearly Destroyed GM. Here's the quick and dirty: the Vega sold really well because it was cheap and kind of looked like a junior Camaro, but it was underengineered and poorly assembled. It was an early example of the "top-down" management that ruled General Motors at least until the recent bailout.

My family never had a Vega, but they did have a Pontiac Astra with the "iron duke" engine that replaced the prone-to-failure Chevrolet 2.3 liter Vega engine. Not all Vegas had this engine. My college roommate had a late model Vega with a v-8 engine. The car still wasn't particularly fast, but it never came within shouting range of 20 MPG. It also ate tires.

China is Playing Games with Rare Earth Metal Supply

China appears to be playing games with the supply of rare earth metals either to the entire world or selected countries. (They appear to be especially ticked at the Japanese right now.) Rare earth metals are a key component of batteries for electric cars and hybrids, so without the rare earths, the Prius would be prostrate,the Volt would be vanquished and the Leaf would be left. Overall though, somehow, I think we'd still be able to carry on even if the Chinese cut off the rare earth supply. On the other hand, if they cut off the supply of zinc oxide, this would happen:

Pinsent on Beiber

The laugh track ruins it.

Rest in Peace Tom Bosley

Tom Bosley, the actor most famous for playing Howard Cunningham died today at age 83. I probably learned a thing or two about being a dad him. Let's drink a toast in his honor with beer in teeny weenie glasses. Maybe even seventy-two.

UAW Chastises Chase Bank

According to the Detroit News, the UAW is threatening to take all of its deposits out of Chase Bank, deposits amounting to hundreds of millions of dollars for multiple reasons. The bank has refused to honor a foreclosure moratorium in Michigan. The Bank has taken a position backing Big Tobacco in its fight against unionization of farm labor, and although the article doesn't mention it, Chase is just a shitty bank. Don't believe me? Check out these sites

www.chasebanksucks.com
www.chase-sucks.com (check out the forum)
www.complaintsboard.com/.../chase-bank-a6981.html


I was already boycotting Chase due to its close relationship with Trilegiant Corporation (now part of Affinion). Here's a link to my blog post on the subject in 2007. Trilegiant/Affinion is a multi-billion dollar scam enterprise. How big of a scam is it? Apollo Capital, the private equity company that owns Affinion is trying to take Affinion public with a starting market capitalization of about three billion dollars.

Now for my marginally relevant video of the day: Be Gentle Tonight, by Jaye P. Morgan, formerly of the Gong Show and Founder (okay, probably not) of J.P. Morgan Chase.



Since I'm on the subject of the Gong Show (and in keeping with my usual criteria of only the highest standards of blogginess or blogitude) , I have to embed this Gong Show clip. It's been almost thirty years since I last saw Gene, Gene, the Dancing Machine. I didn't realize how much I missed him.

The British Perspective on the Decline of US Industry.
The BBC visits Gary, Indiana

Check out this link for the BBC Newsnight's story on the sad state of Gary Indiana. Gary was a boomtown through the first half of the 20th century. The decline of the steel industry resulted in Gary becoming close to a ghost town. Actually, Gary isn't a ghost town, 100,000 people still live there. On the other hand, Gary is still the home of U.S. Steel's biggest plant. When you talk to somebody who questions the use of $16 billion in stimulus dollars used to prop up General Motors and Chrysler, I suggest that you point to Gary, and ask the person what would have happened to all these towns dependent on the auto industry had GM and Chrysler not been saved.

Here's reporter Paul Mason's detailed report on his visit to Gary.

50 States Looking into Robosigning by Mortgage Servicers
Where Have They Been the Past 3 Years?

Most of the major mortgage servicers have announced moritoriums (moritoria?) on foreclosures in order to correct questionable paperwork practices, Meanwhile, the attorneys general of all 50 states have no jumped on the bandwagon and have announced a coordinated investigation of mortgage foreclosure practices.

My question: where were the attorneys general three years ago when consumer attorneys first broke news that there was rampant fraud in mortgage filings. It was almost three years ago (October 31,2007) when USDC Judge Boyko through out 14 foreclosure cases by Deutsche Bank on the grounds they couldn't prove their chain of title. Click here to see my write-up on the subject November 16, 2007. I wonder what happened to the homeowners covered by those 14 mortgages. The Deutsche Bank cases made the national news. In my blog post at the time, I linked to a front page New York Times story. In other words, fabricated foreclosure paperwork is nothing new, and has not been a secret. Where were the attorneys general three years ago?

Jobs Jobs and More Jobs.

People say the American economy is broken, and it just can't create enough jobs to go around. Ok, you haters, what about THIS.

Donald Duck vs. Glenn Beck

Staying Alive in The Wall

An interesting mash-up.

Happy 70th Birthday John Lennon

Clinton-Biden Swap - Bill's all for it

There's talk in the political press that there have been serious discussions in the White House about Hillary Clinton and Joe Biden swapping positions for 2012.

When asked what he would think about a Hillary/Biden swap. Bill Clinton said, "I'm all for it. Jill Biden's kind of hot."

"Oh, JOE BIDEN? Let me think about it."

Can New Engines Drive Market Share?
Part 1 - Ford Launches 4 New Engines in the F-150

The Ford F150 pickup is the #1 selling light vehicle model in the United States, and it has been for a generation. Ford's 2011 models are coming a little late this year, but they should come on like gangbusters, because Ford is showing off not one, not two, not three, but four new engines in its signature pickup line. The base engine is a version of the 3.7 liter V-6 that debuted to great acclaim in the 2011 Mustang earlier this year. The 3.7 is tuned to generate 300+ horsepower in truck form, a substantial increase over the previous base engine. Combined with a revised 6-speed automatic transmission, the 3.7 liter engine is expected to outperform General Motor's upgrade V-8 engine, but still deliver best-in-class fuel economy, exceeding the Chevrolet Silverado hybrid's 21/22 MPG. In fact, the superior fuel economy in the F-150 is a big reason Ford is discontinuing the compact Ranger pickup. The Ranger with a V6 only rates 16/21 with the EPA.

Ford's other engines for 2011 include two V8 engines, a 5.0 liter and 6.2 liter, for those who need more torque for towing, as well as its technological star, the 3.5 liter Ecoboost engine. The 3.5 liter is a V6 with gasoline direct injection (GDI) and dual turbochargers. A version of the engine has powered the Taurus SHO and the Flex and Lincoln MXT for a year or two. Ford hasn't releasted power or fuel economy numbers for this engine, but promises that trucks with the Ecoboost will match the 11,300 tow rating of the 6.2 liter V8 while having fuel efficiency close to the base 3.7 liter V6. The Ecoboost will come at a price premium, and will not be available until sometime in 2011, so it'll be awhile before we see how much people will pay for top of the line fuel efficiency and power combined with untested durability.

It appears that the 3.7 liter and 5 liter engines will be the volume motors for the F150. It won't take much of a market share boost to increase sales by the 11,000 unites needed to push Ford into the #1 position ahead of General Motors, this time not just in trucks, but in light vehicles (cars and trucks) altogether.