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Monday, September 26, 2016

Why Inequality Matters: 3 Ways The Mortgage Crisis Has Undermined Our Legal System

Banks are demonstrating that if you have enough money and influence, you’re not expected to follow the same laws as everyone else.

For several years, I have been writing that extreme economic inequality is among the most destructive forces in a society. As inequality grows, it undermines the effective functioning of the economy, the basic tenets of capitalism, and the foundations of democracy.

Unfortunately, the housing crisis and now the housing settlement increasingly look like an example of how these mechanisms work.

One of the central characteristics of highly unequal societies is that two sets of laws develop: One set for the rich and powerful and one set for everyone else. The more unequal societies become, the more easily they accept the unacceptable, and with each unrebuked violation, the powerful actors at the top of the society gain an ever greater sense of entitlement and an ever greater sense that the laws that govern everyone else don’t apply to them. As a result, their behavior becomes increasingly egregious.

I would suggest that the robo-mortgage scandal is a strong indicator that this type of unequal justice is now becoming ever more commonplace in America. Past bank abuses are typically discussed without a sense of outrage. They have, in effect, become a recognized practice of deception with no consequences. Here are three prominent examples from the past few years:

First, the robo-mortgage scandal was discovered. As powerful members of society, the banks effectively decided what laws they wanted to follow and disregarded others. The banks claimed that their violations were technical and harmed no one. Nonetheless, the activities of the banks constituted massive fraud, perjury, and conspiracy. Bank officials have testified in court that they filed as many as 10,000 false affidavits a month. These are effectively undeniable admissions of law-breaking on a massive scale.

It’s a federal crime, punishable by up of five years of imprisonment, to knowingly file a false affidavit with the court. From the perspective of the law, you are guilty of the same perjury when you falsely testify in court or when you submit a false affidavit. In most states, filing false affidavits with the court similarly constitutes a felony offense of perjury.

  • Downhearted Patriot

    It is time for the President to replace the Attorney General wih someone who knows the meaning of the words “to uphold the laws”

  • KhalidMahmood

    wells fargo home mortgage is a biggest fraud and filling the false statements in the court also.

  • PaulaHouseEisenhart

    “The more unequal societies become, the more easily they accept the unacceptable, and with each unrebuked violation, the powerful actors at the top of the society gain an ever greater sense of entitlement and an ever greater sense that the laws that govern everyone else don’t apply to them.” Thanks for all of that!

  • 1olderbutwiser1

    Laws as they are applied means simply more and more lawyers are hired to launder all the illegally obtained money, to the pockets of the legal system. The end result would be a ton of money into the lawyers pockets, and a small fine for the offending institution, the fine going to the government as pocket change to hire more regulators to write more regulations which will result in more lawyers to be employed by more sides of more lawsuits, AD INFINITUM.

    Shakespeare said it best.

    To reiterate, Shakespeare said it best.

    Again, to reiterate, Shakespeare said it best.

  • Dan Williams

    I worked for IRS in Atlanta 50 years ago and can tell you how the big, rich corporations just follow the script of the small time crooks. The shell home business was booming. It was the same scheme these bank crooks have used. They would get some old farmer who owned 40 acres in the country to sell for $100 dollars an acre. He would sign 160 blank deeds. The shell home company would advertise that they would give you a quarter acre of land for signing up to buy a shell home. They would cut off a quarter acre and pay the farmer a $100 “bird dog” fee for his land. No money down for the shell home and free land, a good deal? Of course there was no water, roads, electricity,but there were no building restrictions where the land was located. The shell home company set up their own “credit bureau” and approved everyone. The loan went through and a new “home” was built. The credit company would have been the big loser except when the loan payments were not made they just took the dee and house ack and sold it again, without legal process. Then the shell home company looked so good they went public, sold enough shares to get rich and pay some of the mortgages off to hold back the tide of foreclosures and let the mortgage company get off the hook, by crook (reselling the loans. The stockholders lost and someone, probably the government, lost on the loans. Same play in the minors went on to the big leagues.

  • Hankk

    The worst of the banking fraud was done to those folks that bought a home that they could afford, but was way over inflated. These folks can still pay their payments, however are so far upside down that they couldn’t sell their home if they wanted to with out losing their ass. The banks that hold these morgages should be made to rewrite them at todays appraised value. Wake up US Attorney General and help the people upside down that are being riped off each month when they make their house payment. hankk, MI

    • Will3691

      Your idea is insane as you must be. Any suggestion that reeks of justice and fairness is obviously misguided. I hope we all become as nuts as you.

    • And all those who gained value in their homes, or those who flipped properties profitably should be forced to pay back all the value they acquired.

  • Bruce_S78

    If the Attorneys General would charge a few bank CEOs, Chairmen of the boards, etc, with a few hundred counts of mail fraud and filing false affidavits with a court, and were to get a few convictions, all of us would be a lot happier. This is the same type of behavior that gets gangsters sent away for years. We need a few more overcrowded jails.

    • CPANY

      They won’t, because the guys that would have to approve the prosecutions come from the same social class as the bankers and related scumbags who are committing the crimes.

      • JohnnyE1000

        Yes, but they lost their nest eggs too when the banksters caused the crash.

        • The money is nothing, JohnnyE. It’s just an arbitrary marker for the wealth. When these “bubbles” burst, and the “wealth is destroyed” phase comes to and end and the smoke clears…why, the real wealth (the real estate, the mineral rights, the capital goods, the military assets) are all still there! They’ve just changed ownership, and the inner circle becomes just that much tighter and that much richer.
          “Money” is not “wealth”. Now for the $64,000, would it make any difference whether that money was gold coins instead of dollars, yen or yuan? What do you think?

  • freethinker

    Affordable Housing Act.

  • terango.lf

    10,000 documentable purgeries a month? And Presedent Clinton was impeached for one in a civil law suit??

  • KathiLee

    I lived in a country where income inequality and unfairness to all but the rich and politically connected was an everyday reality: Mexico. There, “Contracts and the idea of a fair bargain become meaningless as less powerful parties to an agreement know their rights will not be enforced. Over time, citizens lose faith in government and their own ability to thrive in what becomes a corrupt economy. This uncertainty leads the small businesses, which are so often cited as important to our economy, to shy away from new activities that might put them at the risk of unequal treatment.” When people can’t get ahead through hard work, because the game is rigged, the economy suffers, people’s potential is ignored and untapped, and society and the economy as a whole suffer. That’s not good for anyone, even the 1%.

    • CPANY

      KathiLee: What you said is right, but it’s not the whole story. What may also happen is revolution. The rich in two revolutions that I’ve studied made the fatal mistake of assuming that the situation would continue forever, perhaps because it was so favorable for them.

      Well, guess what? In both the French and Russion revolutions the situation didn’t last forever. There was a violent revolution that the rich never saw coming, though in retrospect it’s hard to see how they could have missed it.

      I believe that the United States is heading toward a violent class revolution and the rich like Romney and Ryan probably will be completely surprised by it. I suspect that Warren Buffet sees the possibility of a revolution and is urging his rich friends to back off from their priveleged positions. They probably won’t: it’s such a great deal.

  • Know that I have waited for 40 years, and am willing to die waiting for the level of hate, rage, and justifiable resentment in this country to REACH THE THRESHOLD OF MEANINGFUL ACTION (REVOLUTION). Think of me as an EVER-BURNING PILOT LIGHT waiting for an explosive atmosphere of economic, political, and militant rage to become uniform and pervasive. Know that the WAR WE NEED TO HAVE IS RIGHT HERE AT HOME, and that every day is an incremental step toward the collective realization of this truth. Know the things I wish I never knew, and we can bear the burden of this knowledge together. ” LET US GATHER TOGETHER TO FACE THE STORM; TOMORROW BELONGS TO ME”

  • flyguygirl

    Excellent article. Cronyism and the cross-pollination between Wall Street and D.C. has to end.
    There will always be economic inequality but the present levels are unacceptable due to the
    aforementioned. You do not want to kill individualism and the right each one of us has to pursue
    our talents through effort, sacrifice, and dreams. Remember no one owes anyone anything, not
    even parents to their children. You just have to have a fair and truthful system wherein the rights
    of all are protected equally. Then it is up to the individual to make him/herself equal to others at the apex.

  • William Deutschlander

    We are experiencing the one half of one percent (predominately republicans) creating an atmosphere wherein they can transform our Democracy to Autocracy!

  • “Corporations ARE people, my friend! Who do you think their money goes to? It goes to PEOPLE, my friend.” So saith Willard “Mitt” Romney.
    Mitt, my friend, THIS is what corporations really are. You know that, don’t you? You’ve use corporations in this same way, to insulate yourself and your fortune from liability. “Liability” and “anonymity” are what corporations are about…corporations like those anonymous SuperPACs and the lobbying group called ALEC (the American Legislative Exchange Council”, which spends money from its corporate members to promote bills drafted by those members’ legal counsel which, when enacted into laws by ALECs State and Federal legislator “members” will profit those corporate donors, at the expense of the public whom those lawmakers are elected to serve.
    Mitt, would you like a “do-over” on that asinine “Corporations ARE people” remark?