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Foreclosures, Temps, Freelancers, etc.

The House that Set off the National Furor over Faulty Foreclosures
The House that Set off the National Furor over Faulty Foreclosures

(1) The House that Set off the National Furor over Faulty Foreclosures:  That’s how a great article in last Thursday’s New York Times describes the house in the photo above, owned by Nicolle Bradbury.  Everyone should read this article in full. As I have mentioned in an earlier post, the national media can’t seem to decide whether the big mortgage lenders were “sloppy” and made “mistakes,” or committed fraud.  This article makes it look a lot more like fraud, when a “robo-signer” processes 400 foreclosures in a day, claiming to have checked titles and other documents.

The basics:  Nicolle Bradbury bought this house for $75K, but after a couple of years lost her job (as an employment counselor, even!), and could no longer afford her payments of $474/month.  She has two teenage kids.  The mortgage is owned by Fannie Mae–which has since been nationalized–and serviced by GMAC–which is now 90% owned by the government as a result of the bailout.  They have spent several years trying to foreclose on Bradbury and evict her.  (According to the Times, Fannie Mae and GMAC “have now most likely spent more to dislodge Mrs. Bradbury than her house is worth.”) But in the final hour of the foreclosure proceedings, Bradbury got some help from a retired lawyer named Thomas A. Cox, who noticed irregularities in the paperwork.  He had stumbled on the phenomenon of “robo-signing” and falsification or fabrication of documents, which have been central to what is being called “Foreclosuregate”.

Here’s a part of the article that struck me:

The tragedy of foreclosure is that some homeowners may be able to stay where they are if their lenders are more interested in modification than eviction. Without a job, Mrs. Bradbury is not one of them. Her family, including her 14-year-old daughter and 16-year-old son, lives on welfare and food stamps.

“A lot of people say we just want a free ride,” Mrs. Bradbury said. “That’s not it. I’ve worked since I was 14. I’m not lazy. I’m just trying to keep us together. If we lost the house, my family would have to break up.”

It has been two years since she last paid the mortgage, which surprises even her lawyers.

“Had GMAC followed the legal requirements, she would have lost her home a long time ago,” acknowledged Geoffrey S. Lewis, another lawyer handling her case.

So:  here’s someone who loses her job, and the government, in the form of Fannie Mae and GMAC, thinks the best approach is to try to take her home away from her and her kids. Shouldn’t the government try to give her some job training, pay for a public works program in her area, give her a grant to fix her pickup truck so she can go look for work, anything?  But instead they try to kick her out of her home.  What’s incredible is that this story is told over and over across the country.

The other great bit is this deposition Cox takes from the robo-signer, someone named Jeffrey Stephan, and what Cox spelled out in a court filing:

“When Stephan says in an affidavit that he has personal knowledge of the facts stated in his affidavits, he doesn’t. When he says that he has custody and control of the loan documents, he doesn’t. When he says that he is attaching ‘a true and accurate’ copy of a note or a mortgage, he has no idea if that is so, because he does not look at the exhibits. When he makes any other statement of fact, he has no idea if it is true. When the notary says that Stephan appeared before him or her, he didn’t.”

This guy Cox is a real hero, as is Bradbury, as far as I’m concerned.

Read the whole article (really).

(2) Cheery article about freelancers in USAToday: Hat-tip to our business manager Paul Piwko for alerting me to this ridiculous article about how great “freelancers” (i.e. hyper-flexible casual workers) are–for employers.  One employer is quoted thus: “You don’t have to worry about someone coming late to work, and they hate you, and about all the payroll taxes and health insurance.” Those pesky benefits–so nice to be free of them.  We are happy that one of the very few dissenting voices quoted in the article is D&S Associate and UMass-Boston econ prof Randy Albelda, who pointed out the public costs of this trend:  “workers who lack jobless benefits could be forced to go on food stamps while those who defer health services could incur more serious problems that raise the premiums of others who have insurance.”

Read the whole article.

(3) Those ultra-flexible temps: We just posted a great article by a former student of mine, Dan DiMaggio, about his recent experience temping in Minneapolis, The Jobs Crisis and the Art of Flexible Labor:

On Sunday, October 3, an ad in the Star Tribune from the temp agency ProStaff advertised 300 immediate call-center positions. By Wednesday they had upped this number, hiring 550 unemployed and underemployed Twin Cities residents to fill these jobs. The majority were people of color, including hundreds of African Americans–no surprise given that as of 2009 African-American unemployment (20.4%) in the Twin Cities stood at three times that of whites (6.6%). We were promised work through October 22, with the caveat that we must be “flexible flexible flexible.”

In the middle of the night Thursday, after four hours of training and one day of work, we all received a dreaded phone call: our jobs were gone. No one had been calling the call center about the class action settlement we were hired to take questions about. So just like that, over 500 people were returned to the ranks of the jobless.

Read the rest of the article.

(4) The expanding government sector? Though I don’t have time to comment, I’d like to note the discussion in the econ blogosphere about whether government spending has expanded as much as the right-wing-nuts claim it has.  Two key links:  The “Ever-Expanding” Government Sector, Illustrated, at Econobrowser (great graphs!), and Big Spender Update, from Paul Krugman’s blog (which has comments on the Econobrowser post, but links to earlier stuff by Krugman on this topic).

That’s all for now–I hope to post more frequently once I’m done working on our November/December issue and several new editions of our books.

–Chris Sturr


  1. Wow..what a read Chris. I hope Nicolle keeps fighting and to know the banks spent more than its worth trying to evict her makes me sick to my stomach. I agree with Cox and Bradbury being heroes and we need MORE people like this. What the heck is going on in this world….

  2. Why do banks like chasing people out their homes?Foreclosures are not good thing for any family and i think it should be said that banks should help those having difficulty paying mortgage to find a solutions for their problem but not foreclosure.I Also think its time to locate these real estate advisers who gives fake advice because loosing dollars on a property is very painful.

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