Geithner Refusing To Provide Funding For Legal Aid For Homeowners


The 2008 bank bailout bill gave the Treasury secretary broad discretion to spend money to fend off foreclosures. But while Treasury has approved $7.6 billion in expenditures to help states prevent and clean up foreclosures[. . . ] States initially applied for funds from the program in the spring of this year, but the Treasury refused to extend money for tackling legal bills. [. . . Sen. Sherrod] Brown and 30 Democratic members of the House sent a letter to Geithner asking him to reconsider his decision. Geithner refused[. . . MORE]

Geithner cit[ed] a memo from Treasury General Counsel George Madison, which contends:

Legal aid services are not necessary and incidental, as a matter of law, to the implementation or effectiveness of the HFA Hardest-Hit Fund, because: (1) Congress has provided other specific appropriations that fund the same type of legal aid services proposed by the state Housing Finance Agencies ("HFAs"); and (2) legal aid services are not necessary or essential to the implementation of a loan modification program.

This is wrong as a matter of law. Nothing in the law impedes the use of these funds for legal assistance. Most likely, Geithner asked for a legal opinion telling him not to provide these funds. Geithner is a corrupt incompetent. He should be fired immediately.

DISCLOSURE: I advise homeowners regarding loan modifications and foreclosures.

Speaking for me only

< Blinders On The Norquist Strategy | Wednesday Afternoon Open Thread >
  • The Online Magazine with Liberal coverage of crime-related political and injustice news

  • Contribute To TalkLeft

  • Display: Sort:
    The obvious question that (5.00 / 3) (#1)
    by Anne on Wed Dec 15, 2010 at 12:13:20 PM EST
    Geithner - and Obama - seem to be asking is, "why on earth would we want to provide help to deadbeats?"  

    I mean, isnt't that more or less the attitude that keeps coming to the fore?

    The LAST thing Treasury wants are do-gooder lawyers being funded to uncover more of what's been fairly successfully hidden from much of the country.

    I'd say there's a special place in hell for people like Geithner, whose loyalties lie with the big banks and Wall Street, but I think hell might be too good for them.

    A starring role in the reality show (none / 0) (#2)
    by observed on Wed Dec 15, 2010 at 12:17:04 PM EST
    re-make of the Poseidon Adventure for these yacht owning leeches.

    McCain would've been worse (none / 0) (#3)
    by Dan the Man on Wed Dec 15, 2010 at 12:33:12 PM EST
    Another argument (5.00 / 1) (#5)
    by jbindc on Wed Dec 15, 2010 at 12:37:30 PM EST
    Posited when there really is no defense.

    It's either:  

    a) "McCain would have been worse," or
    b) "President Palin in 2013"



    Yup, like a guy dying of a gunshot wound ... (none / 0) (#35)
    by Robot Porter on Thu Dec 16, 2010 at 02:20:23 AM EST
    being told, "Cancer would have been worse."

    Thanks, mate.



    I don't know what that means anymore... (5.00 / 2) (#6)
    by Dadler on Wed Dec 15, 2010 at 12:40:02 PM EST
    ...when Obama is as bad as he is proving to be. I just can't get behind that as any kind of salve.

    Obama is proving to be as beholden to Wall Street as anyone, ever.


    I think the point is... (none / 0) (#8)
    by kdog on Wed Dec 15, 2010 at 12:46:21 PM EST
    we'd be in exactly the same boat under McCain, only with an attack of Iran being in a more advanced stage of planning, and two different Ivy League justices.

    Of course that assumes (none / 0) (#9)
    by jbindc on Wed Dec 15, 2010 at 01:01:17 PM EST
    There would have been openings on the Supreme Court.

    Mc CAIN??????????? (5.00 / 1) (#32)
    by norris morris on Wed Dec 15, 2010 at 11:10:41 PM EST

    We're supposed to be grateful that Obama is not as bad as McCain??????

    We voted for Obama because he made promises we held dear.

    He has caved and compromised on almost everything every GOPer has.

    Your sorry ass of an argument doesn't hold.


    So would the Black Plague (none / 0) (#11)
    by Militarytracy on Wed Dec 15, 2010 at 01:38:20 PM EST
    and a nuclear war, isn't saying much.

    How about this: (5.00 / 3) (#15)
    by Dadler on Wed Dec 15, 2010 at 02:08:41 PM EST
    No Democrat who could possibly have been elected would've been worse than Obama. His conservative leanings, his need to please everyone, his unique psychological dysfunctions, it all makes for a Democrat the Republicans couldn't love more than they already do. He is such a pushover to them, they must be pinching themselves every day and marveling at their fortune.

    Yeah, McCain woulda been worse and almost ANY OTHER Dem woulda been better.  There, I feel a little better.



    Edwards? (none / 0) (#18)
    by CST on Wed Dec 15, 2010 at 02:27:21 PM EST
    at least that would have been more fun :)

    Personal failings in politicians is always a hoot.

    But I wonder what would have happened.


    I shoulda said his need to please those... (none / 0) (#19)
    by Dadler on Wed Dec 15, 2010 at 02:29:14 PM EST
    ...who abuse him (since he has no problem giving the finger to those he assumes already love him and have no other love to run to). It really seems to be a deeply psychological issue with him.  We never really cut those cords to childhood, none of us do, and when you get that powerful a position, just like silver spoon dubya, all that sh*t gets taken out on the rest of the country, if not the world.  

    I'm one year (none / 0) (#26)
    by Ga6thDem on Wed Dec 15, 2010 at 04:59:46 PM EST
    older than Obama and I think growing up biracial really messed with his mind unlike it would in these days. Back then a biracial child was so unusual that they were literally treated like freaks. Or at least that's my personal observation. Back then you didn't fit in with blacks and you didn't fit in with whites. I guess you could say he never fit in and was rejected and maybe that's where he gets this insane need to be accepted by people that hate him.

    There have been biracial children here (5.00 / 2) (#27)
    by Towanda on Wed Dec 15, 2010 at 05:06:26 PM EST
    for 400 years.  Not unusual at all.

    What was unusual in his case is that his father was African, not African American.


    Well (none / 0) (#29)
    by Ga6thDem on Wed Dec 15, 2010 at 07:59:02 PM EST
    sure there was but I'm willing to bet back then there wasn't a white mother taking her biracial child to the grocery store and all. They were biracial by today's terms but back then they would have been considered black and put in a segregated society.

    Exactly. (none / 0) (#33)
    by Towanda on Thu Dec 16, 2010 at 12:18:01 AM EST
    They were biracial by today's terms but back then they would have been considered black and put in a segregated society.

    That's the point to make -- a different point from denying their existence.


    Growing up in Hawaii (5.00 / 1) (#28)
    by jbindc on Wed Dec 15, 2010 at 06:04:07 PM EST
    Would have presented its own challenges.  Donald could speak more to this, but there are still issues between Native Hawaiians and whites, let alone between Native Hawaiians and blacks.

    I spent 5 years on Oahu (5.00 / 1) (#34)
    by hairspray on Thu Dec 16, 2010 at 01:13:06 AM EST
    and it was the most laid back place I ever lived in.  I was a kid of course, so not aware of some of the nuances, since African Americans were not numerous then.  But my earliest friends were Chinese,Japanese, filipino, Samoan and you name it. It didn't seem to matter.  My mother was taken aback at first. In time her best friend was a Chinese Hawaiian woman. When we came back to the states we were surprised at how different the attitudes were.

    forgot your snark tag, Dan (none / 0) (#37)
    by The Addams Family on Thu Dec 16, 2010 at 12:04:43 PM EST
    Why doesn't Tim just say (5.00 / 2) (#4)
    by SOS on Wed Dec 15, 2010 at 12:33:21 PM EST
    "I no longer believe that freedom and democracy are compatible. The public doesn't support unregulated, winner-take-all capitalism and so we don't support the public making decisions."

    That would at least be more honest.

    Sh&t SOS.. (none / 0) (#7)
    by kdog on Wed Dec 15, 2010 at 12:43:55 PM EST
    from my seat I think we'd have at least a sliver of a chance in an unregulated market.

    The marijuana market in NY is currently unregulated, for example, and I can't think of any legal regulated market that has treated me better or more fairly.  

    The housing market, otoh, has been "regulated" for some time, has it not?  Guaranteed regulated profit for the banksters.


    I know of the market you speak (none / 0) (#10)
    by Militarytracy on Wed Dec 15, 2010 at 01:31:35 PM EST
    and we are headed there even if the big fish refuse to see it.  But it will take all of the wealth this nation has getting there.  We are going there regardless, but it is going to take everything with it and leave people shell shocked, standing on the side of the road and shaken to the core of their belief systems for seventy years.  And then they will probably do all this stuff to our great grandchildren all over again.

    how Obama helped avert a Depression (5.00 / 1) (#12)
    by Dadler on Wed Dec 15, 2010 at 02:02:36 PM EST
    Slightly OT, but I have come to believe that what is meant, in these days, by another Depression is that the American people, largely armed to the teeth with personal firearms, would've been so depressed they would've started using those guns on the ruling class.

    Sadly, they might also start using them on each other, since the ruling class is SO good at getting the peons on both "sides" of the political fence to destroy each other instead of those actually engaged in the destruction -- the wildly wealthy ruling class itself.


    I have no doubt (none / 0) (#13)
    by Militarytracy on Wed Dec 15, 2010 at 02:07:08 PM EST
    that we are headed for some instabilities that will be astonishing.

    I have the same hunch (5.00 / 1) (#20)
    by Dadler on Wed Dec 15, 2010 at 02:34:58 PM EST
    And I pray, to the God I stopped believing in long ago, that it doesn't come to that.  When I think of the future for my ten year-old son, wow, sometimes, too much of the time, it's hard to even face the dreadful feelings I have.  


    Phuck it. Love your family, enjoy every moment. Have a great day, Tracy. I'm going to go escape into my memoir, or to the online poker table.


    i love the irony of my last thought (5.00 / 1) (#21)
    by Dadler on Wed Dec 15, 2010 at 02:35:44 PM EST
    enjoy your family, enjoy every moment, now i'm going to go escape.



    This is where we are though (none / 0) (#30)
    by Militarytracy on Wed Dec 15, 2010 at 09:42:36 PM EST
    remembering what is important as the facade of much falls away or will literally be burnt down.  There are a million little daily predictables that comfort me that before we are done with this will probably be on the scrapped heap.  Joshua's school is already so broke I can't imagine what a school that is even more broke will look like or how it will run.  But education is one of the most important things in this family so we will do what needs to be done.  After all, learning can happen in many different ways.  It can happen in rooms flush with all the latest tech and it can also happen in bare austere rooms.

    The lunch program is so broke they can barely continue to serve stuff up, and Joshua has begun to bring a sack lunch since they have gone fat free.  Trying to go fat free though with no money to spend on ingredients makes horrible not edible lunches.  The kids who are still eating school lunches at Joshua's school are the poor on the free program.  Anybody with a stocked pantry is taking a home lunch now.  I expect before it is all said and done though, the hot lunch program won't exist anymore.  I give it a year tops.


    I hear that... (none / 0) (#23)
    by kdog on Wed Dec 15, 2010 at 03:09:14 PM EST
    part of the reason I doubt I'll ever be a parent...this society is on the way down man, i fear I could not adequately provide.  And I look at my young nieces and wonder what we're leaving for them...shudder.

    That poker might be you and yours ticket outta the worst of the fray...keep on killin' it till you can buy a spread next to the Bush fam near the fresh water reserves in South America.


    cmon now (none / 0) (#17)
    by CST on Wed Dec 15, 2010 at 02:25:37 PM EST
    you know it's overpriced...

    Yeah.. (none / 0) (#22)
    by kdog on Wed Dec 15, 2010 at 03:06:13 PM EST
    there is that part:), but since all I've known is the black market unregulated price it feels "right", and remarkably stable as far as commodities go.

    And who else gives you credit without an application and/or social security identification number (not to be used for identification purposes, lol) these days.  Freebies, late night delivery, the list goes on.  There are still a few mom and pops in the regulated markets who roll like that, but fewer everyday as those who the regulations (aka rigging) favor drive them outta business.


    you've seen (none / 0) (#24)
    by CST on Wed Dec 15, 2010 at 03:15:47 PM EST
    pineapple express right?

    I love the whole "friend vs. business" dynamic.


    I have... (none / 0) (#25)
    by kdog on Wed Dec 15, 2010 at 03:22:11 PM EST
    and it is an interesting dynamic...the kinship of fellow criminality is at play...an honor amongst thieves kinda thing, without the thieving...unless the police roll up, then there is thievery:)

    If he funded legal aide for these (5.00 / 1) (#16)
    by inclusiveheart on Wed Dec 15, 2010 at 02:18:04 PM EST
    homeowners, he would make the banks mad.

    Gee, thanks (none / 0) (#14)
    by Zorba on Wed Dec 15, 2010 at 02:07:47 PM EST
    bunches for all the "help" to all these people, Timmy "The Grinch" Geithner.  Hope you sleep well at night.  (Yes, it's snark.)

    legal aid for what? (none / 0) (#31)
    by diogenes on Wed Dec 15, 2010 at 10:32:10 PM EST
    Are these lawyers who are meant to delay and obstruct foreclosures on people who aren't paying their mortgages, or are banks really foreclosing on people who have kept up to date on their loan payments?

    And there it is... (5.00 / 1) (#36)
    by Anne on Thu Dec 16, 2010 at 07:17:32 AM EST
    "Why do we want to give lawyers to deadbeats?"

    Here's a hint: there's a reason this mess is being called the foreclosure fraud crisis, and there's an enormous amount of information out there that can explain it all.  Naked Cpitalism has done some outstanding posts.  Ditto David Dayen at the FDL News Desk.

    How would you feel about this scenario?  Let's say you were a homeowner current on payments, but struggling, and you decided to see if you could get a modification of your loan by going through the government's HAMP program.  Almost the first thing the loan servicers do is tell people to stop paying on the mortgage so they'll qualify.  So you do.  Meanwhile, they start asking you for the reams of supporting documentation required, so you dutifully - and timely - gather it all up and submit it.  And you wait.  When you call to find out what's happening, you're told they never got your paperwork, so you have to re-submit it.  Now, you're a couple months in, and haven't made any mortgage payments.

    You call and find out that some part of your documentation is missing - please re-submit.  You do.  The next time you call, you're told, yes, they received it, but it's now out of date, so you have to provide more current information.

    Meanwhile, on the bank end, they apparently have no idea you've been told not to pay your mortgage so you can qualify for modification - which, by the way, is not true - so now you're so far behind, you start getting letters from the bank telling you that unless you get current within some ridiculously short period of time, they're going to start foreclosure.

    This is one way people who were current on their mortgages have lost their homes.  

    And that's not even taking into account the HUGE problem with the foreclosing entities not even being able to prove they own the note.  There's the false affidavits submitted to rocket-docket foreclosure courts.  There's the people who didn't even have a mortgage being put into foreclosure.

    And can we talk about securitization of the mortgages, and how there was so much money to be made making loans to be sold down the line to trusts that sliced and diced them to sell as mortgage-backed securities that the banks and mortgage brokers were making loans to anyone who could breathe, who were soliciting and encouraging people to lie about their income and assets so they could make the loans, who didn't explain and even lied about the terms?

    Do you have any idea how many so-called mortgage-backed securities may not be backed by anything because the notes weren't properly conveyed?  

    Do you think that if a bank wants to take your home it should have to prove it actually owns the note on your house?  Do you think there should be any consequence for banks whose affidavits show they owned the note before you ever got the loan?.

    And on and on and on.

    Are you going to make the argument that people who are about to have their homes taken from them shouldn't have legal counsel to make sure it's all being done legitimately?  We provide lawyers for people accused of crimes - even if some of them may be guilty - so why do we have such a distaste for providing counsel for people in this situation?

    Given the wealth of information out there on this subject, there's no excuse for anyone to still be thinking that this is just about deadbeats who bit off more than they could chew, and now want a free ride, and who don't deserve legal representation if they can't afford it.


    the only thing you got wrong, Anne (none / 0) (#38)
    by The Addams Family on Thu Dec 16, 2010 at 12:14:13 PM EST
    Meanwhile, on the bank end, they apparently have no idea you've been told not to pay your mortgage

    no i can't prove it

    but i see no reason not to believe the banks are behind this too


    Investigate Lawyers Who File Foreclosures (none / 0) (#39)
    by lawgrace on Sat Dec 18, 2010 at 09:26:06 PM EST
    Scores of homeowners do not contest foreclosures because:
    1. They don't have knowledge of the law in order to recognize which aspects of foreclosure are legally challengeable or even fraudulent.
    2. Even those who identify wrongdoing, lack funds to pay for attorneys to represent them.
    3. Homeowners are told to come to foreclosure auctions with money that they do not have, so they stay away from foreclosure auctions.  

    These homeowners are oblivious about sometimes "straw buyers" and sometimes lawyers in charge of foreclosures, obtaining illegal ownership of people's homes, and pay literally nothing through "credit bids;" and that those recorded deeds from such auctions are Null!  For these very reasons, there needs to be a probe of lawyers who file foreclosures.

    Also, the average lay person doesn't know about legal requirements of "standing" that prevents their homes from being repossessed via non-existent lenders, or via lenders who have no ownership of promissory notes.  

    Yet, courts are supposed to enforce "standing" and compliance with established laws!  Illegal, defective, fraudulent foreclosure causes useless deeds for property sales; title insurance denials  -and more!

    Further, after certain foreclosure auctions (via simulation) result in fraudulent -NOT lender acquisitions, by lawyers or straw buyers, the common scenario becomes property flipping, neighborhood blight, rodents, and so on!

    *Sample of fraudulent foreclosure acts:

    -Deliberately use defunct lenders, lenders without "standing" for false civil and bankruptcy foreclosure proceedings
    -Create and conceal malpractice foreclosure delays and engineer billable litigation
    -Orchestrate sham foreclosure auctions; property never acquired by lenders, but 'straw buyers'
    -Commit actionable wrongs (unfair debt collection, fraud, various torts) that create lawsuits
    - Foreclosures naming defunct lenders, illegally recorded property deeds, flipping, blighted communities
    -Unconscionably create false deficiency judgments against property owners after straw buyers acquire homes for pennies on the dollar
    -Intentionally false Bankruptcy court "Motion to Lift" and "Proof of Claim" on behalf of non-existent lenders which conceals fact of a "non-secured" mortgage debt
    -Involved in fraudulent collection of property damage insurance, as well as mortgage-default insurance

    • Fraudulent foreclosures abet loss of property taxes to city revenue, and invites rodents, vagrants
    • Thousands of families made unlawfully homeless from null foreclosure proceedings

    Foreclosure lawyers are officers of the court.  Lawyers are required to know applicable laws and civil procedure.  This knowledge is not required of mortgage lenders, nor loan servicers.

    *more @ Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
    http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclos ure_lawyers#