As we reported, the property at 1479 Quesda Avenue which was picked to be the rally point for yesterday’s “National Day of Action” against unfair foreclosure proceedings in San Francisco was purchased for $215,000 in 1999, refinanced in 2007 with a $590,000 loan, and taken back by the bank earlier this year.
Protest organizers and members of the press have characterized Vivian Richardson, the foreclosed upon ex-owner of 1479 Quesada, as a victim of predatory lending. Or in the words of Ms. Richardson earlier this year:

Families have been ripped off by banks, scammed by brokers and nothing’s done to them. It’s time for the families and the community to stand up and take back what’s theirs.

We are losing families every day…The banks got bailed out, and we are being pushed out. But we’re going to fight, even if we have to do it one home at a time.

Yesterday, we took some heat for showing a perceived lack of concern for Ms. Richardson and for suggesting the “Occupy” movement wasn’t doing itself any favors by associating themselves with this case as an example of economic injustice in San Francisco.
Today, we offer a few more details and wonder if they might change a few minds.
Once again, Ms. Richardson acquired 1479 Quesada in 1999 from John Pereira with a recorded transfer price of $215,000. In 2002, Ms. Richardson refinanced the home with a $281,250 mortgage.
In 2003, Ms. Richardson refinanced the property with a new first mortgage for $318,760. And in 2004, Ms. Richardson refinanced the property with a new first for $381,000.
In early 2005, Ms. Richardson added a second loan to the property in the amount of $39,750, a loan which was paid off later in the year when the property was refinanced with a $500,000 first.
In March 2006, Ms. Richardson refinanced her home with a first mortgage for $556,000 to which another loan for $50,000 was added that October.
In July 2007, Ms. Richardson once again refinanced her home with a $590,000 first mortgage. At the same time, Ms. Richardson also secured a second for $74,000.
By the end of 2008, Ms. Richardson was already $14,695 past due on her first mortgage. And in May of this year, the bank foreclosed on the property with $728,129.33 in principal, fees and accrued interest due on that $590,000 loan alone.
Keep in mind that the foreclosing note from 2007 was fixed for five years with the $2,180,75 monthly payment spelled out in the note Ms. Richardson had signed, promising to pay the bank back in full or give up the property.
And that’s how Ms. Richardson came to be “pushed out” of her home.
Over A Half Million Reasons It’s Just And The “Occupiers” Aren’t [SocketSite]
Bayview Families Refusing to Leave Despite Foreclosures [rebuildthedream.com]

Recent Articles

Comments from “Plugged-In” Readers

  1. Posted by rolfsf

    Yeah, but what did the bank do with all that money?!!
    snark aside, what the hell was the bank (or banks) thinking allowing her to refinance every year for 5 years? “Oh hi Mr. Jackson, would you like some more propofol?”

  2. Posted by sf

    The Occupy movement right now is stale. I was definitely with them and marching in the beginning. But how can reasonable people sympathize with what the encampment had turned into on the Embarcadero- it was as if the Haight street weasels were transported to the waterfront.
    I think the idea of renovating our government to get money out of politics is sticking around, however, and the movement will transform into something much bigger, but as of now, it is becoming trivial. I still support their efforts and option to express themselves in the public square because that’s the true meaning of liberty.

  3. Posted by Jimmy

    six 1st loan refi’s? are we to believe she was bamboozled on all of those refi’s? cry me a river; i hope she got a fur coat and a trip on a cruise ship.

  4. Posted by grumpy

    so was there any underwriting done by these banks to make sure that this person was a good risk and capable of paying back the mortgage(s), or did they just pass along the risk as investment grade securities? Granted, it sounds like she took advantage of the system, but clearly the system was broken and I think that is the bigger issue that occupy is trying to make.

  5. Posted by tipster

    I have a couple of friends who did the same thing. They refinanced to fix up the house and pay off car loans and credit card bills. Then they realized they couldn’t make the higher payments. So they called the mortgage broker who refinanced them again and earned another $10,000 in fees.
    That was so easy, they did it again and again. Each time they did it, the mortgage broker asked them if they wanted even more. They were using the refinancings to make the mortgage payments, so why not take more out. They spent some of it, used the rest of it to make the next 12-18 payments. When it ran out, they went back for more.
    There was no way they could actually make the payments for anything like the amount borrowed, about 5 loans ago, so when the music stopped, they knew all was lost and so they stopped making any payments altogether.
    Without all of that money being put into their pockets, they kept spending because now they had no payments. Then they got foreclosed and kicked out.
    What they did next was to skip a new car cycle to keep up the rest of their former lifestyle. Now that benefit is gone, the repair bills on the cars are eating them alive, and so they are cutting back on spending. This, of course, will start to impact the economy as more and more people finally reign in spending. Add the austerity in Europe and you can see where this is heading from an economic standpoint. And you can see how prices got so far out of whack.
    Underwriting? The bankers just paid off the rating agencies and skipped the underwriting, took huge fees and put the fees in their pockets.

  6. Posted by kg

    Ms. Richardson sounds like a completely irresponsible idiot. I’m failing to compute how she isn’t equally to blame for her own actions.

  7. Posted by A.T.

    “Ms. Richardson sounds like a completely irresponsible idiot.”
    Well, she sounds to me like a perfect representative example of the typical American mindset from 2000-2007. Look no further to grasp how we got ourselves into this massive recession.

  8. Posted by FormerAptBroker

    sf wrote:
    > The Occupy movement right now is stale.
    It is sad that most people (myself included) just don’t have the time/effort/motivation to do anything. The rich Republicans bankers and Republican business owners that rip off the government and make millions have a huge motivation just like the rich Democrat bankers and Democrat unions that that rip off the government and make millions have a huge motivation. The Tea Party and Occupy will die out but the people sucking off the Government day in day out are motivated and will do anything they can to keep taking more and more money from regular taxpayers.
    > I think the idea of renovating our
    > government to get money out of politics
    > is sticking around…
    Just about all normal people want cash out of politics, but it is not going to happen since recent court decisions say that business can give almost unlimited amounts of money as can unions (since the courts let them compel people to join unions and pay dues).
    It is a sad place we are in when I (and most people I know that think about politics) just get to vote for the person we hate the least…

  9. Posted by tc_sf

    Note also that “rich” is relative.
    To large parts of the country the ~$500k that both Quesada homeowners took out is a very large amount of money. The two ACCE people from the other thread, one with a $1M home and the other with a $750k second home will not look like the oppressed poor to the vast majority of the country.
    Tipster mentions austerity in Europe and a very underreported fact is that Germany actually has a lower per capita GDP then Ireland.
    http://www.wolframalpha.com/input/?i=per+capita+gdp+germany+vs+ireland
    It’s shouldn’t be taken as moralizing to point out that efficiency and profligacy are issues here and not merely rich vs poor as sometimes portraid in the media. People should also not ignore the discontent that can be produced when those lower on the economic ladder are forced to subside those slightly higher up. Regardless of what happened at the very top of the pyramid (Which is a separate issue which also bears looking at)

  10. Posted by sparky-b

    How is that she bought the place off John Pereira in ’99. The news story said he grandfather built the house and it has always been in the family?

  11. Posted by futurist

    She was hardly a so called victim. She was and is a a greedy liar.
    And yes, OWS, at least in SF is really just the Haight St. weasels and street punks now camping out at the Embarcadero.

  12. Posted by radar

    I am a OWS supporter but not an advocate for some of their activity and direction. It is a new movement which has to find someone to organize and lead. There have been those that have been greedy and taken great advantage of the system and those like myself and many others here that were taught to be fiscally conservative, pay your bills on time and do the right thing. Unfortunately, we do not live in a perfect world.
    As this last few discussions have been about OWS and the current situation, I really like what Michael Moore has proposed. It is fair and it is the right thing to do. It may be too political for Socketsite so could be gone by the morning but……..
    Where Does Occupy Wall Street Go From Here? …a proposal from Michael Moore
    Tuesday, November 22nd, 2011
    Friends,
    This past weekend I participated in a four-hour meeting of Occupy Wall Street activists whose job it is to come up with the vision and goals of the movement. It was attended by 40+ people and the discussion was both inspiring and invigorating. Here is what we ended up proposing as the movement’s “vision statement” to the General Assembly of Occupy Wall Street:
    We Envision: [1] a truly free, democratic, and just society; [2] where we, the people, come together and solve our problems by consensus; [3] where people are encouraged to take personal and collective responsibility and participate in decision making; [4] where we learn to live in harmony and embrace principles of toleration and respect for diversity and the differing views of others; [5] where we secure the civil and human rights of all from violation by tyrannical forces and unjust governments; [6] where political and economic institutions work to benefit all, not just the privileged few; [7] where we provide full and free education to everyone, not merely to get jobs but to grow and flourish as human beings; [8] where we value human needs over monetary gain, to ensure decent standards of living without which effective democracy is impossible; [9] where we work together to protect the global environment to ensure that future generations will have safe and clean air, water and food supplies, and will be able to enjoy the beauty and bounty of nature that past generations have enjoyed.
    The next step will be to develop a specific list of goals and demands. As one of the millions of people who are participating in the Occupy Wall Street movement, I would like to respectfully offer my suggestions of what we can all get behind now to wrestle the control of our country out of the hands of the 1% and place it squarely with the 99% majority.
    Here is what I will propose to the General Assembly of Occupy Wall Street:
    10 Things We Want
    A Proposal for Occupy Wall Street
    Submitted by Michael Moore
    1. Eradicate the Bush tax cuts for the rich and institute new taxes on the wealthiest Americans and on corporations, including a tax on all trading on Wall Street (where they currently pay 0%).
    2. Assess a penalty tax on any corporation that moves American jobs to other countries when that company is already making profits in America. Our jobs are the most important national treasure and they cannot be removed from the country simply because someone wants to make more money.
    3. Require that all Americans pay the same Social Security tax on all of their earnings (normally, the middle class pays about 6% of their income to Social Security; someone making $1 million a year pays about 0.6% (or 90% less than the average person). This law would simply make the rich pay what everyone else pays.
    4. Reinstate the Glass-Steagall Act, placing serious regulations on how business is conducted by Wall Street and the banks.
    5. Investigate the Crash of 2008, and bring to justice those who committed any crimes.
    6. Reorder our nation’s spending priorities (including the ending of all foreign wars and their cost of over $2 billion a week). This will re-open libraries, reinstate band and art and civics classes in our schools, fix our roads and bridges and infrastructure, wire the entire country for 21st century internet, and support scientific research that improves our lives.
    7. Join the rest of the free world and create a single-payer, free and universal health care system that covers all Americans all of the time.
    8. Immediately reduce carbon emissions that are destroying the planet and discover ways to live without the oil that will be depleted and gone by the end of this century.
    9. Require corporations with more than 10,000 employees to restructure their board of directors so that 50% of its members are elected by the company’s workers. We can never have a real democracy as long as most people have no say in what happens at the place they spend most of their time: their job. (For any U.S. businesspeople freaking out at this idea because you think workers can’t run a successful company: Germany has a law like this and it has helped to make Germany the world’s leading manufacturing exporter.)
    10. We, the people, must pass three constitutional amendments that will go a long way toward fixing the core problems we now have. These include:
    a) A constitutional amendment that fixes our broken electoral system by 1) completely removing campaign contributions from the political process; 2) requiring all elections to be publicly financed; 3) moving election day to the weekend to increase voter turnout; 4) making all Americans registered voters at the moment of their birth; 5) banning computerized voting and requiring that all elections take place on paper ballots.
    b) A constitutional amendment declaring that corporations are not people and do not have the constitutional rights of citizens. This amendment should also state that the interests of the general public and society must always come before the interests of corporations.
    c) A constitutional amendment that will act as a “second bill of rights” as proposed by President Frankin D. Roosevelt: that every American has a human right to employment, to health care, to a free and full education, to breathe clean air, drink clean water and eat safe food, and to be cared for with dignity and respect in their old age.
    Let me know what you think. Occupy Wall Street enjoys the support of millions. It is a movement that cannot be stopped. Become part of it by sharing your thoughts with me or online (at OccupyWallSt.org). Get involved in (or start!) your own local Occupy movement. Make some noise. You don’t have to pitch a tent in lower Manhattan to be an Occupier. You are one just by saying you are. This movement has no singular leader or spokesperson; every participant is a leader in their neighborhood, their school, their place of work. Each of you is a spokesperson to those whom you encounter. There are no dues to pay, no permission to seek in order to create an action.
    We are but ten weeks old, yet we have already changed the national conversation. This is our moment, the one we’ve been hoping for, waiting for. If it’s going to happen it has to happen now. Don’t sit this one out. This is the real deal. This is it.
    Have a happy Thanksgiving!
    Yours,
    Michael Moore
    MMFlint@MichaelMoore.com
    @MMFlint
    MichaelMoore.com
    Join Mike’s Mailing List | Follow Mike on Twitter | Join Mike’s Facebook Group | Become Mike’s MySpace Friend

  13. Posted by futurist

    I do wish Micheal Moore would lose some weight and stop wearing those ridiculist trucker gimme caps.
    Michael: lend some more credibility and style to your movement.

  14. Posted by spencer

    for the msot part, the occupy crowd is just too uneducated and too lazy to do research. The mere fact that they aligned with this woman who was totally irresponsible with here mortgage and purely responsible for what happened to it is shameful. you would think that at least one of these protestors would have done a little due diligence.

  15. Posted by what if

    What if this woman refinanced to pay for her child or mother’s cancer or kidney operations? What would all of your tune be then?

  16. Posted by lol

    I have a friend who did the same thing year after year starting in 2K. His wife stopped her job and spent a few years in the University system thanks to the 50-70K they were getting every year. He rode it all the way to 2007.
    Sure it’s immoral, but most folks think “if it’s not illegal it’s not immoral”. This is the way us as a society we have educated our own: laws governing behavior.
    There you have it Libertarians and Ron-Paul-The-Shrinker-Messiah: deregulation at work.
    As I said earlier today, I think that only when the corrupting and corrupt bankers will be sent to jail will be morally allowed to blame the over-borrowers.

  17. Posted by BillyBalls

    @ RolfSF – I hope she put it all down on a $4M studio at the Infinity.
    @ What if -
    She’s in front of a camera after having traded a deed of trust for her home in exchange for $500 odd thousand dollars.
    Its naive to suggest that she didn’t know what she was signing, not once, but half a dozen times.
    She is complicit, and duplicit.
    … and the quesada protestors are a bunch of myopic socialist lemmings for allowing her to rally them.

  18. Posted by FormerAptBroker

    what if wrote:
    > What if this woman refinanced to pay for
    > her child or mother’s cancer or kidney
    > operations? What would all of your tune
    > be then?
    And what if (after getting her dying Mom in to get a new kidney and cancer treatment) the only reason she could not make any payments on the loan was because she quit her job to help track down some terrorists that were going to detonate a suitcase bomb in San Francisco. What would all of your tune be if you knew that this woman saved our lives?

  19. Posted by Embarcadero

    No, this doesn’t change minds.
    I have no sympathy for Ms. Richardson, and even less for the bond holders and stockholders backing the mortgage lenders who bet that the US Treasury would back them if their gambling problem got out of hand. Both happened.
    What annoys me about SS’s reference is that they collapse the Occupy Wall Street Movement into a small, destructive but highly visible faction that has had little to do with the movement until now. It’s not like SS has had in-depth coverage of OWS or any of their actions until now.
    It’s too little, too late – SS’s street cred for political coverage just ain’t there.

  20. Posted by sparky-b

    I disagree with that Embarcadero. I think this is where Occupy entered into San Francisco housing, so into the scope of this site.
    Occupy our homes: on the topic of this site and covered.
    Shut down the Port of Oakland: not on topic and not covered.
    Equally bad ideas by Occupy that turn off lots of Democrats but only the housing one was talked about here. As it should be.

  21. Posted by Wooman

    You are all missing the frigging point. Add up the numbers and you will find the bankers securitized $3,005,760 in mortgages and all of the excessive fees involved with that number. The homeowner was an irrelevant pawn seduced into the transactions through the allure of free money – she is clearly the victim as you will surely find if you go talk to her today – however the bankers made a pile and got bailed out for their losses. Banks are predators and apparently hide their deeds rather well judging from many of the comments here.

  22. Posted by A.T.

    Anyone who wants to seduce me into being a victim – where I walk away with half a million dollars – well, feel free!

  23. Posted by wifey

    This sight is very insightful. It is great we are all able to speak freely. Thank god we have a Democratic President in office: the editor of SS truly reflects the Pelosi Reed Obama values. I am sure a IPO will sell like hotcakes.
    [Editor’s Note: Drop the racial slights and we won’t have to waste our time dropping your "freely spoken" comments.]

  24. Posted by A.T.

    I agree that this site has insightful sights ;)

  25. Posted by JustLooking

    What I really want to see is the money trail for Ms. Richardson after her final $664k refinancing.
    A. Borrowed: $664k ($590 + $74)
    B. Used a portion to repay existing mortgage loans ($556 + $50);
    C. Used remaining funds ($58k) for???
    And that seems to only be the tip of the iceberg. From 2002 (1st refi)to 2007 (last refi), she increased her loans on the property from $281,250 to $664,000 for a difference of $382,750. Now if we assume (guess on my part) that for every refi, she paid 3-5% of loans value in fees, the aggregate fees (bank, title insurance, etc.) are $82,500 to $137,500. This changes her net from refinancings to a range of $245,250 to $300,250.
    Again, my question is: Where did all of this money go?
    If you want to play the “victim” card, you need to be ready to show that you did not benefit at all from this. That means tax records and bank statements to show how the funds were spent.

  26. Posted by RenterAgain

    I think the first comment on this thread is right on point.
    Yes, it’s very hard to see the homeowner as a victim. But the anonymous loan officers (and their bosses, and their bosses’ bosses’ bosses) who approved the refinancing in 2005, 2006, 2007 are also at fault here. A lot of people participated in the game that brought us to where we are now.

  27. Posted by The Milkshake of Despair

    “The homeowner was an irrelevant pawn seduced into the transactions through the allure of free money…”
    You’d have to be as naive as a newborn to think that the money was free. This alleged victim was either negligent in understanding the gross implications of signing to a loan or was cleverly defrauding the lender. Actually it was probably a little of both. First started with the serial refis under the assumption that if the underwriter signed off then she should be able to easily repay the loan. Then by the final refi it dawned on her that the escalating balance would be very difficult to pay off. So why not go for one final “screw you” refi and pocket the difference? She almost immediately defaulted on that last loan as if a light bulb went off.
    (funny that the ads now attached to this page are for debt relief companies)

  28. Posted by johnny

    @Editor: Do you have a copy of the Promissory Note you refer to here where the borrower promised to pay “the bank”.
    If so, please provide for analysis.
    Thanks
    [Editor's Note: While we have reviewed the Note, we don't have an electronic copy to provide.]

  29. Posted by BillyBalls

    @Wifey – For an idiot occupy protestor, you quote moronic Fox News catch-phrase propaganda.(“Pelosi Reed Obama Values”)
    Thanks for closing the circle between the fringes of left and right!
    @Wooman – your point is taken, unfortunately, it is simplistic, naive, and myopic.
    Here are the facts (again):
    The borrower signed ALL those applications, not once, but six times.
    She’s a player, not a pawn, or a victim.
    She got $500K of the bank’s money in exchange for her property and a promise to pay.
    She didn’t need to get bailed out.
    The real question is, what did she do with the cash?
    I DEFY any of her supporters to get a documented answer.
    The ones getting played are the protestors who were duped into almost being clubbed while defending a debt junkie.

  30. Posted by johnny

    @Editor: Then what is the identity of “the bank” the promise was made to?
    [Editor’s Note: See EBguy's comment below which is correct.]

  31. Posted by lol

    BillyBalls,
    I strongly suspect the borrower confused cash out as income. She probably used it for living expenses or improvements, maybe for emergencies she otherwise wouldn’t be able to afford.
    This begs the question: What did the bankers/investors who got Billions over Billions of WS bonuses / profit sharing / dividend do with the money?
    My point is: like the home-debtor featured here, the banksters created debt that couldn’t be repaid out of thin air and MONETIZED it. They affirmed their status as the 0.1%, making themselves untouchable by society, politicians and the law.
    And then they got bailed out and got more bonuses.
    Just saying: if you go after one end, you have to be consistent and go after the other end. WS banksters should forfeit all their 2002-2011 bonuses and sometimes go to jail for fraud.

  32. Posted by tc_sf

    ” the banksters created debt that couldn’t be repaid out of thin air and MONETIZED it.”
    A large number of people including in the trenches realtors felt that there was no bubble and that home prices were justified.
    If this women’s loan app came across your desk, on what basis would you have denied her a half million dollar loan on what was probably a half million dollar home at the time?

  33. Posted by A.T.

    lol, I believe that everyone posting here agrees that the banksters were crooks. The debate appears to be that some people posit that this woman was somehow an innocent dupe and a victim for pocketing about $500,000 in the grand scam.

  34. Posted by tipster

    I think all of us are financially sophisticated. We generally don’t go around borrowing things we cannot pay back.
    But I think that if you look at it from her standpoint, and the standpoint of a occupy protester, you’ll see why it looks like her fault.
    In general, people expect banks not to give them a loan that they cannot repay. That’s really what we’re all quibbling over here. She had no chance to repay that loan, but the bank gave her the money. As a result, she lost the house.
    Now she may have lost it because she went on a spending spree or whatever, but the reality is that if the banks had acted like banks that we all know, she likely would not have gotten the first loan.
    Now the banks did something crafty here: they put a mortgage broker, solely motivated by commissions, in between the bank and the borrowers. This allowed all sorts of shennanigans to occur that the banks could wash their hands of. Score one for the banks. But they set this up.
    So if she said, “goodness, I’ll never be able to make the payments”, there was always a mortgage broker reassuring her that she could refinance.
    She likely was NOT very financially sophisticated. She probably understood the risks, but figured that if a bank was giving her the money, that this mortgage broker must have been telling the truth, because the bank was far more financially sophisticated than she was, and they seemed to be agreeing with the mortgage broker, because they could have easily seen that she couldn’t possibly pay the loan back.
    So I don’t necessarily think you can approach this from YOUR viewpoint, because her experiences, education level, and general knowledge were likely different from yours. She likely used the bank’s knowledge as a proxy and kept borrowing. They were the gatekeeper and they opened the gate. That told her all she needed to know.
    So whose fault is it? When I get to an intersection, and there is a police officer there, and he motions me on through a red light, and I go through the red light and someone going through the intersection on the green hits me, whose fault is it? I can plainly see that I am going through a red light. I might even have been able to see the car going through the green. Whose fault is it? What if the cop takes off his uniform and runs away laughing after the crash. Whose fault was it?
    I think what she is saying is that she was expecting the bank to be in the role of the police officer. That’s all. In years past, the bank DID act that way. What no one told her was that the bank had stopped assuming that role and she was on her f*cking own. You and I would have always assumed that. But I think if you don’t have much financial sophistication, and you don’t realize that change has occurred, you might be angry. You might zoom through intersections unscathed for years and relax completely when you see officer #6, because 1-5 did you no wrong.
    I’m not condoning her actions, I’m not agreeing that she was a victim, but if you step back and understand that different people have different experiences and viewpoints, you can learn a lot about how people think and how to resolve problems and differences. I think she could have a valid point. I don’t think it’s black and white.

  35. Posted by lol

    A.T.,
    I am not doubting this one bit, just that our moral compass might need to be adjusted. If legalized fraud is the new normal, why blame someone who is playing the game all the way and is hypocritical about it just like every other player. I say good for her. Taxpayer/voters deserve the shaft for being so clueless and complacent.
    tc_sf,
    Sometimes you need to have your ear on the rail to hear the freight train coming. No need for this one, you simply needed to keep your eyes open. As I said earlier, I saw crazy behavior in my circle. Friends “living” on refis, another in a development plan that included doubling of prices in 4 years as a pre-requisite, a mortgage broker I know who quadrupled his business in 3 years. All very clear signs something very very wrong was going on.
    Of course, when you were participating into the bubble, the money you made were the fruits of your hard work and smarts. This blinded many of the bigger picture.

  36. Posted by lol

    For once I do mostly agree with Tipster. With the following variance: she probably knew something was wrong, but figured “We need the money, I’ll take care of my family”. If it was legal and condoned by the bank, then why refuse?
    Of course protesting the consequences is highly hypocritical. Then again, look at the GOP candidates. It’s the new normal.

  37. Posted by tc_sf

    “In general, people expect banks not to give them a loan that they cannot repay”
    Repay or sieze the collateral.
    You specifically have been calling out the bubble for a long time, but the view that a bubble was going on was not generally held.
    Consider the viewpoint of the loan officer. As I asked lol, what rational was he supposed to give for denying this women a loan off her half million plus home while approving some other person?

  38. Posted by A.T.

    tipster, if one is going to go easy on the borrower, one might go easy on the banks. After all, this was a secured loan – risk free, right? Because one could always sell the security and recover 100%. And the appraiser said the value was high enough. And we had realtors proclaiming (even on this site) as late as 2008, nearly two years into the housing price bust, that SF was different and would never take a hit, so a loan on an SF house was REALLY risk-free.
    Now I don’t buy that with respect to the banks, and I don’t buy it with respect to this borrower. But what do I know? I just pay my bills in full and on time like a chump. If I weren’t in the 1%, I’d expect OWS to be standing up for me, not this serial welsher.

  39. Posted by tc_sf

    “All very clear signs something very very wrong was going on.”
    I agree that there were clear signs, but this wasn’t a widely held view.
    My point is that for the lending above not to happen you’d basically need the loan officer to say: “Sure the appraisal came in fine, Sure you’ve paid off five previous loans, but you just don’t seem financially sophisticated.”
    That might fly once in a while, but if you consider the 11 houses on Quesda in distress, I can’t see it flying that everyone on the street is told that they are just not financially sophisticated enough. I doubt that the people told that would just say “OK sure”.

  40. Posted by RenterAgain

    If this women’s loan app came across your desk, on what basis would you have denied her a half million dollar loan on what was probably a half million dollar home at the time?
    Perhaps the refinancing three or four years in a row should have been a red flag. Also, in 2006, the writing was on the wall in REALLY BIG LETTERS that I could read without my glasses. 20% increases in prices every year for how many years with no comparable increases in wages. People clearly buying beyond their means thanks to ridiculous loans. And so forth.
    As lol said, if your eyes were open, you saw this coming. I saw it coming and it is not my job to pay attention to these things. My realtor told me in 2006 that he was devaluing all of his East Bay properties by 10%. People working at banks who were paid to pay attention knew that the practices were not sustainable.
    Perhaps the homeowner believed that she could appreciate her way out of those loans. Perhaps a loan officer told her that, in the same way that a mortgage broker told my friend that a negative am loan was fine because housing prices in SF always go up. Again, I’m skeptical that she is truly a victim, and I think OWS picked a poor poster child. But I really don’t know.

  41. Posted by tipster

    The banks were financially sophisticated. She was not. So, no, I don’t think you hold them to the same standard.
    But you have to understand that the banks never had any money. The money belonged to investors of the bank or to outside investors. The investors got duped the same way she did: because they didn’t understand that the rating agencies had stopped THEIR gatekeeper functions.
    As a result, the bankers ran wild. She expected the bank to be the gatekeeper, the investors expected the ratings agencies to be the gatekeeper, and woo hoo, the bankers understood that both of them were wrong, the WAS no gatekeeper. So they made a gizzilion loans, took huge fees, and walked away.
    Now, answer the question, who was mostly at fault?
    Now, let’s look and see who took the losses. She lost her home. I know, it’s not hers, but it’s an emotional thing – it hurts. The investors lost their money. That’s a very real thing.
    But the bankers didn’t lose their bonuses, and the bankers were mostly at fault. So the people mostly at fault lost nothing, and everyone else lost a lot.
    That’s the system. Is it right? Should it be changed. Three years later it has not been changed.
    Thus
    the
    protest.
    Does it look so ridiculous any longer? Not to me.

  42. Posted by El Bombero

    Ms. Richardson did a great job playing the bubble, and she’s doing a great job playing the bubble aftermath by using dupes like the ows characters to try to get the system to give her some more free stuff.
    I don’t think that you can really get on a soapbox about the “morality” of obtaining something that the government and the bankers can simply create with a few computer keystrokes. It’d be like stealing air or sunshine.

  43. Posted by VancouverJones

    Come on guys! Everyone (except apparently the Justice Department) knows how the Scam worked. Is there anything about the vision and SPECIFIC actions identified in Michael Moore’s letter that you don’t agree with given the FACT that the Scam was so succesful that the economy was nearly destroyed?
    Also, everyone know that the esiest folks to involove in a scam are those that fall into the following categories (in order):
    1. The greedy (someone who took out a loan with out any intention of paying it back).
    2. The intelligent (Doctors always believe that their smarts applies to other fields in life).
    3. The vulnerable (minorities with great credit being steered to sub prime loans anyway).
    Let it go! Wall St. et all were wrong. OWS is right to critique what happened. Let’s try to fix things so this doesn’t happen again.

  44. Posted by A.T.

    There’s an old saying – you can’t con an honest person.
    I think that probably applies to Ms. Richardson’s victimization claim. A half million dollars gets thrown at her but she got had by the banks? She had no idea she had to pay it back? Banks just throw free money at people, and I guess that’s just how things work now? I don’t buy the “but they let me do it so it’s their fault!” argument.
    I’m not giving a pass to the banks at all — I agree with OWS on this point (to the extent their position is coherent). But banks were not the only playaz here. We’re just talking about degrees of culpability, not whether the Ms. Richardsons are on the scale at all.

  45. Posted by Brahma (incensed renter)

    tc_sf wrote:

    If this woman’s loan app came across your desk, on what basis would you have denied her a half million dollar loan on what was probably a half million dollar home at the time?

    Her income, hands down.
    Proper loan underwriting would have raised multiple red flags, regardless of what the flimsy appraised value of the home was. When the bank ran her credit report and saw multiple refinancings and additions of second liens in the recent past, that was a hint and a half that she just didn’t have enough INCOME to afford the mortgage, and was flying on fumes.
    Not that I agree with the implicit claims by others here that greedy profligate homebuyers caused the so-called financial crisis and if it weren’t for irresponsible people like Ms. Richardson, we’d be at S&P 500 1,400 and Lehman Brothers, CountryWide and IndyMac Bank would still be in business. I don’t.

  46. Posted by The Milkshake of Despair

    tipster – I’ve recognized that she may have been naive initially but the near immediate default on the final loan indicates that she may have figured out the scam and taken one last intentional grab.
    I totally agree that the culprits are those who created the whole shaky money pipeline in the first place. But as the theme of this thread suggests, there are far more appropriate retail victims for OWS to use as an example. This one smells like a small time scammer.

  47. Posted by wrath

    The pro-scammer crowd is out in farce today.
    “My point is: like the home-debtor featured here, the banksters created debt that couldn’t be repaid out of thin air and MONETIZED it.”
    Holy shit! Out of thin air? You mean she never borrowed the money?
    And then, what’s that you say ‘they’ SOLD the debt? Oh, no – did they think they were living in America where you can simply sell a mortgage?
    Those banksters are unbelievable!

  48. Posted by wrath

    Seriously though folks.
    The argument here is that she took the cash from the banks (which, to be clear, was not her own cash but the banks’s cash – if you disagree with that let’s get that out there right now), then she failed to pay it back, the bank whose $ this was (see above) LOST the money which was the bank’s (again, as above) and the bank may then have had to be bailed out with taxpayers (that’ me and – some – of you) $ so that everyone’s bank accounts (again, me and you and some taxpayers who did not have a bank account at this bank) would not go down the toilet.
    And, ehhhhhh…… she’s the victim?
    I guess the argument here is that there is a vast swath of the populace that’s too dumm to get a loan to buy a house (probably some overlap with the folks who are too dumm to responsibly use credit cards).
    But this raises an interesting issue. If that is the case, then can we trust such individuals to select their state representatives, congressmen, the President of the US??????? That’s just crazy!
    Shouldn’t we just admit that huge swaths of the country should just function as wards of the state with no right to contract or vote? For their own good (and ours)?

  49. Posted by EBGuy

    can you identify the name of “the bank” to which the promise was made?
    Initially, she favored Ameriquest and World Savings Bank. Her final mortgage was with SCME Mortgage Bankers Inc.
    My hats off to Socketsite for giving in depth coverage to an issue that the media seems incapable of handling. For a ‘Where are they now’ story, I’d love to know if her mortgage broker is still in business.

  50. Posted by lol

    wrath,
    Holy shit! Out of thin air? You mean she never borrowed the money?
    Strawman argument. I never said that.

  51. Posted by The Milkshake of Despair

    It is pretty controversial to exclude people from voting based on mental abilities, and probably unconstitutional. But it would strengthen the nation to limit the voting public to those who have at least basic critical thinking abilities. Otherwise what we have are dull non thinking voters being swayed by campaign lies which were of course paid for by large corporations. So in essence the rich and powerful are buying votes from those who don’t or can’t think for themselves.
    I’m pretty good at critical thinking yet I’ll voluntarily withhold votes on positions and issues that I don’t understand well enough to to make an informed decision. I wish more people would do likewise.

  52. Posted by Sfwatcher

    After reading all the posts, looks like 99% agree that she is not a victim and the bankers are also to blame.
    The rest 1% have their heads stuck in the sand and argue that she is the victim and it’s all Republicans fault. All politicians are same. If you don’t realize you can’t be helped.

  53. Posted by tc_sf

    “Her income, hands down.”
    Considering the timeframe of near immediate default that MoD points out and the first payment default of the other Quesda house a few months after getting a half million, it seems unlikely that income was a relevant factor here.
    “Shouldn’t we just admit that huge swaths of the country should just function as wards of the state with no right to contract or vote? For their own good (and ours)?”
    My take would be a few steps back from this and to note instead the inherent economic contradiction in claiming that these people were victims, yet we’d have been better off had any bailouts gone to them.
    i.e. if these people are helpless dupes that can’t be trusted to make economic decisions then what would be gained by having bailout money go to them? In econospeak, if the demand side is inefficient and wasteful then whats the overall gain from stimulating aggregate demand?
    Personally I don’t think it’s completely black and white, but I see a lot of people who don’t see the above contradiction at all and are sure that everyone was a victim of the banks and equally sure that any bailouts should go to the people.

  54. Posted by wrath

    From Michael Moore (?) or something:
    “We Envision:
    [1] a truly free, democratic, and just society;
    AS DETERMINED BY MICHAEL MOORE
    [2] where we, the people, come together and solve our problems by consensus;
    EITHER RIGHT AWAY OR AFTER A PROPER RE-EDUCATION
    [3] where people are encouraged to take personal and collective responsibility and participate in decision making;
    IN PARTICULAR, YOU WILL FIRST BE PROPERLY ENCOURAGED TO TAKE COLLECTIVE RESPONSIBILITY BY GIVING UP WHAT YOU HAVE FOR THE BENEFIT OF ALL, THEN ONCE IT’S CLEAR THAT YOU ARE PART OF THE CONSENSUS YOU WILL TAKE PERSONAL RESPONSIBILITY BY PARTICIPATING IN DECISION MAKING OF THE CONSENSUS
    [4] where we learn to live in harmony and embrace principles of toleration and respect for diversity and the differing views of others;
    (OTHER THAN AS NECESSARY TO ACHIEVE CONSENSUS AND THE VARIOUS THINGS LISTED IN 1-3 ABOVE)
    [5] where we secure the civil and human rights of all from violation by tyrannical forces and unjust governments;
    (EXCEPT TO THE EXTENT NECESSARY TO ACHIEVE 1-5)
    [6] where political and economic institutions work to benefit all, not just the privileged few;
    AS IN THE SOVIET UNION, PRC BEFORE DENG XIAOPING, CAMBODIA BEFORE THE VIETNAMESE INVASION OR CUBA SINCE 1961
    [7] where we provide full and free education to everyone, not merely to get jobs but to grow and flourish as human beings;
    AND THOSE WHO DO NOT GET JOBS BUT JUST WANT TO FLOURISH LIVE HONESTLY OFF OF THOSE WHO HAVE JOBS BUT ARE WITHOUT FLOURISH – THE FLOURISHLESS.
    [8] where we value human needs over monetary gain, to ensure decent standards of living without which effective democracy is impossible;
    $800K HOUSE IS A MINIMUM, ALONG WITH WHATEVER ELSE IS NECESSARY TO FLOURISH
    ALSO WE REJECT MONETARY GAIN AND CHOOSE TO FLOURISH RATHER THAN HAVE JOBS – AS THE PERCENTAGE OF THOSE WHO FLOURISH INCREASES AND THOSE WHO HAVE JOBS DECREASES, WE DEMAND THAT PEOPLE IN CHINA, INDIA AND BRAZIL (WHO BY NOW WILL BE MANUFACTURING EVERYTHING OUR OWN FLOURISHLESS PREVIOUSLY MANUFACTURED) PROVIDE THEIR GOODS & SERVICES TO US FOR FREE CONSISTENT WITH GOALS STATED IN 1-3 ABOVE
    [9] where we work together to protect the global environment to ensure that future generations will have safe and clean air, water and food supplies, and will be able to enjoy the beauty and bounty of nature that past generations have enjoyed.
    PAST GENERATIONS – AS IN OUR HUNTER GATHERER ANCESTORS

  55. Posted by empnor

    So what does OWS want? The bank should give her the house back and apologize for taking it from her? Can everyone sign up for that program?
    Perhaps an entrepreneurial type could set up a non-profit to which the Warren Buffets of the world could donate “their fair share” and from which homes could be redeemed from foreclosure and with new loans made to the former homeowners. And everyone gets a tax break along the way.

  56. Posted by wrath

    @lol
    so, if you never said she did not take the money, what does “manufacturing a debt out of thin air” mean then?
    She thought it was a gift? You’re saying she may have misunderstood the business that the bank is in? I can see that – I mean it says a “bank” on the papers – but that could be verb, as in you can “bank on us giving you this $ free of charge to use as you see fit”.
    Or, wait a moment…… Someone should check this – were all these “loan advances” done on Christmas Day? That may explain the misunderstanding. (Unless she’s Jewish/Muslim/atheist – (gifts for Christians, loans for others?) but, to be fair, how is the bank supposed to know that – I don’t think they can ask that? Can they? Anyone? Anyone?

  57. Posted by A.T.

    I just got my credit card bill. WTF? I can’t pay that much! Dirty crooks who gave me that credit limit should have known that it’s too high, and I trusted them not to let me buy too much sh** with that card, so I’m totally justified in stiffing them. OWS, come rally with me against that evil bank!
    On a more serious note, those later mortgages are recourse, so the lender can go after Ms. Richardson personally for the shortfall. OTOH, I have a feeling there are no assets or income to justify the legal expenses.

  58. Posted by shza

    OTOH, I have a feeling there are no assets or income to justify the legal expenses.
    True, even if she had the $300k she stole just sitting in briefcases, it would be only marginally worthwhile. More likely, there is $300k worth of flat screen TVs, ipads, restaurant and vacation receipts, and all the other things to which the Ms. Richardsons of this country believe themselves to be entitled.
    Unrelatedly, I am having a hard time believing the tipster of this thread is the same tipster of previous threads. That one I had pegged as classic republican, far to the right of me; this one is borderline socialist. I certainly agree that the banks are the worst of the bad actors here, but for me that doesn’t go so far as to suggest paternalistic treatment of the smaller time scammer-”borrowers.”

  59. Posted by lol

    wrath,
    It’s called leveraging.
    Again (for the 3rd time today I think), I acknowledge the borrower played the system and got “free money”. By doing refi after refi she was selling her house piece by piece at the ever-inflating price. When the last chair was up for grabs and the music stopped, she was the fastest one and did one last big cash out.
    But the bank and the bankers should be punished for their own stupidity. Actually, they most certainly knew they were acting unreasonably. But 3 things happened: 1 – bankers cashed out big time along the way, ensuring their personal survival in case of a big collapse. 2 – They used their profits to absorb more and more business through M&As, ensuring they would become TBTF and therefore the bank’s survival. 3 – Money collected was used to buy influence and defang regulation.
    Banks pushed the debt like drug dealers. US consumers became addicted to the stuff. Today we’re forcing the addicts to kick off the habit (fair enough, there should be a disincentive to being irresponsible) and not the dealers.
    Imagine the DEA arresting crackheads but letting crack dealers roam free on their word they won’t do it again? Yeah right…

  60. Posted by Wooman

    I will take another run at this: The woman refinancing every year, as so many other Americans were enticed to do, is a collateral event to the main objective. The banks set up all of the incentives to enable this fraudulent scheme, should I say elaborate con that they put over their prey (probably called suckers or something similar). The banks set up the compensation fees for the investment banks that sold the mortgage-backed securities to the investors. The banks rigged the ratings agencies to entice the investors into buying “high-grade” securities. The banks paid Harvard (and other universities per “Inside Job”) professors to write academic papers on the viability of mortgage backed securities and how the real estate market was unshakeable. The banks changed the underwriting guidelines so that any living dork would qualify for whatever loan they asked for. The banks trained their own agents and mortgage brokers how to switch loan programs or lie on applications by telling everyone that there would be no verification process to substantiate the information on the loan applications. The banks allowed anyone with a client base (i.e. accountants, bookkeepers, tax preparers, etc) to earn lucrative referral fees for “selling” loans to their clientele. Lastly, the banks use an elaborate magic trick (called fractional reserve stealing with no oversight) to create all the money needed to fund all those mortgage loans, even though the money did not exist before those loans funded. You can focus on the woman buying some flat screen TV’s if you want but I think you miss the point.

  61. Posted by wrath

    @lol
    Perhaps I could agree with some of that;
    ….. but have a hard time with your analogizing mortgage debt to crack……. both in terms of relative “addiction” risks and the legality of the activity (last I checked there are no “responsible, conservative” crack dealers – at least not in my neighborhood) (I’m glad to know that you view it as addictive though, so I won’t make the mistake of lending you anything).
    On a more serious note, bankers didn’t “cash out” – may of them got paid ridiculous bonuses both during the mortgage run up and before (and to some extent now). But that’s just a complaint about their compensation structure.
    Paulson, etc. may have cashed out but there were parties on the other end of those transactions, no? shouldn’t they be complaining rather than homeowners?
    I don’t know what “absorbing more business” means – they did more business, ok? so….? M&A is legal, right?
    as for defanging regulation, that may well be true and some of that regulation may come back – but that’s hardly illicit – just stupid in retrospect as to some of it (if you’re talking about Glass-Steagall) – there are plenty of dumm regulations that apply to “ordinary citizens” that they wish they could get rid of (rightly).
    I, obviously, agree that if someone timely paid off their mortgage and has a bank trying to foreclose through fraud/stupidity that that’s f’ed up – but, for the most part, that’s not what the complaints here are, I think?

  62. Posted by johnny

    @Editor
    @EBGuy
    just because a “bank” says it has title doesn’t necessarily mean it has “perfect title”. that has been a problem. many banks claiming they have perfected title and thus a right to repossess, yet in actuality, the bank has not received proper assignment of the Promissory Note. This topic has even been litigated; in Massachusetts, for example, and repossessions have been vacated. The problem in California is that it is “non judicial” and often times banks have repossed homes unchallenged and w/out perfected title.
    Just because SCME Mortgage Bankers Inc. says it possesses perfect title doesn’t mean it legally does.
    Show me the paper that literally proves it.

  63. Posted by tc_sf

    “Imagine the DEA arresting crackheads but letting crack dealers roam free on their word they won’t do it again? Yeah right…”
    But similarly, why have the government then go on to subsidize crack for the crackheads?
    Why can you get a 3.5% down FHA loan from the government three years (or less if you have a sob story) after pulling a stunt like this?
    Do you really think that were housing prices to decline from here that these 3.5% FHA borrowers would do their utmost to pay back the loan because it was intermediated by the government rather then big banks?
    Note that 3.5% down is 27:1 leverage.
    There were clearly issues within the banking system, but there were some borrower issues that would occur with nearly any lending system.

  64. Posted by wrath

    @ woman
    “The woman refinancing every year, as so many other Americans were enticed to do, is a collateral event to the main objective.”
    but….. then this thread is really a collateral and pointless thread b/c that’s what the thread is about (vide above).
    More to the point:
    “The banks set up the compensation fees for the investment banks that sold the mortgage-backed securities to the investors”
    which banks? you mean banks set up their own compensation structures, oh no!
    “The banks rigged the ratings agencies to entice the investors into buying “high-grade” securities”
    How did they “rig” them? Did they make illegal payments to them? You mean they tried to get the highest ratings possible (isn’t that their job?) and the ratings agencies bought it? That sounds like dumm ratings agencies (vide Greece btw);
    “The banks paid Harvard (and other universities per “Inside Job”) professors to write academic papers on the viability of mortgage backed securities and how the real estate market was unshakeable.”
    Really? They paid people to promote their customers’ products (again, isn’t that what invetment banks do?) And all those homeowners, no doubt having read the relevant articles in the Harvard Business Review, just swallowed this hook and sinker? What was the impact of those articles, really (I’m just assuming that (a) such articles exist, (b) people were actually paid and (c) they were paid to write specifically on this topic with the specific slant the banks wanted – all of which is no doubt “proven” in these expository books)?
    “The banks changed the underwriting guidelines so that any living dork would qualify for whatever loan they asked for.”
    So…… the banks changed their own guidelines on how risky they wanted to get with their own money? Maybe that’s stupid but isn’t that their own problem? If Apple wants to change its policies how it sloshes around cash – do I get a vote?
    “The banks trained their own agents and mortgage brokers how to switch loan programs or lie on applications by telling everyone that there would be no verification process to substantiate the information on the loan applications.”
    There was no verification process – they played loose with their own money – so what?
    “banks allowed anyone with a client base (i.e. accountants, bookkeepers, tax preparers, etc) to earn lucrative referral fees for “selling” loans to their clientele.”
    Really? My accountants have not sold me any mortgages yet – I think that’s actually illegal since their only license is a CPA license.
    “Lastly, the banks use an elaborate magic trick (called fractional reserve stealing with no oversight) to create all the money needed to fund all those mortgage loans, even though the money did not exist before those loans funded.”
    Ehhhhh…… so…….. you think that if you deposit $ into a bank that bank should not then be able to lend it out to anyone? Can it invest it in something? If yes, can the investee then lent it out or invest it? If not, how do you propose that the bank pay you interest? Or do you propose that you pay the bank interest for keeping your money (a practice prevalent in 15th century Italy, where robbers and brigands roamed the realm).

  65. Posted by lol

    tc_sf,
    Yes, the Gov’t is also a dealer of that drug. When already 25% of Americans are underwater, they try to do something to prevent this disaster from wrecking more lives. They chose easing the withdrawal instead of having people go cold turkey. With more eligibility checks this amounts to a addiction containment, like methadone. It’s not supposed to hurt you, at least not kill you. Nevertheless, people are still hurting a lot and it’s partly of their own making.
    wrath,
    Debt is addictive. You do a refi and suddenly you have more disposable “income” until that money is gone. In the mean time your kids are used with the Xmas gifts, trips to Disneyland, you yourself are used with buying more expensive food, driving a better car, having a nicer lifestyle. Remember, when asked how much people would need to be happy, they invariably say “making 50% more than today” whatever the income level. When they reach it, the goal post changes. We’re wired that way. Debt provided this access to the ideal better lifestyle.
    Without another shot of debt you’re back to your old less happy you and that hurts.

  66. Posted by The Milkshake of Despair

    “So…… the banks changed their own guidelines on how risky they wanted to get with their own money? Maybe that’s stupid but isn’t that their own problem?”
    It is until the bank needs a bailout. Then it becomes our problem. Privatizing profits and socializing losses.

  67. Posted by wrath

    @ Milkshake
    Ok, so you can either not do bailouts which is difficult but to some extent possible (see Lehman) (but why did AIG counterparties get paid 100% on the dollar?) or toughen lending standards on the national level – but, actually the opposite is happening now – the banks are now being attacked for being TOO STINGY by the same idiots in Congress – it seems they think the banks should just give the money away outright

  68. Posted by wrath

    @ lol (or maybe lol no more?)
    “Debt is addictive. You do a refi and suddenly you have more disposable “income” until that money is gone. In the mean time your kids are used with the Xmas gifts, trips to Disneyland, you yourself are used with buying more expensive food, driving a better car, having a nicer lifestyle. Remember, when asked how much people would need to be happy, they invariably say “making 50% more than today” whatever the income level. When they reach it, the goal post changes. We’re wired that way. Debt provided this access to the ideal better lifestyle.
    Without another shot of debt you’re back to your old less happy you and that hurts;”
    sounds like a difficult personal journey – sounds like you had no choice (who wants to “hurt” after all?)
    I wish you luck in treatment.

  69. Posted by A.T.

    lol’s post just set off a light bulb as to how to get rid of my credit card problem. I haven’t reached my cash advance limit yet, so I’ll just get cash, and make the minimum payments from that for a few months. And when I reach the cash advance limit, I still will have room on my total credit limit, so I’ll just buy more sh** and sell half of it on eBay (keeping the other half for myself to avoid the unwarranted pain of living within my means) and make the minimum payments from those sales for a few months. And then when I finally reach my limit, maybe I can get a few more cards and do it some more. Those crooked banks better not ever come after me for the balance because, well, they probably securitized my credit card debt, and investment banks made money off that, and govt regulations permitted it all, so I’m just an innocent dupe in their crooked game. In fact, since I’m “underwater” as all the sh** I bought isn’t worth a fraction of what I now owe, I’m going to demand a principal reduction.

  70. Posted by lol

    wrath, nope. Almost zero debt despite a recent purchase and never in more than 3X my income in total debt over the almost 20 years of RE investing. I have always done 40 to 60% financing. I am part of the not-so-few that stopped buying in 2002 when the game was rigged. Now I am back buying.
    A.T. Very entertaining. With CCs there’s no collateral except your good name aka credit score. The RE game has a tangible asset for future repo. If the bank is stupid enough to lend you more than your house is reasonably worth, it’s partly its fault. Due diligence, etc… Someone cashed out and stuck the bank with the debt, good for him. The bankster is not punished for rigging the system, shame on the DOJ.

  71. Posted by A.T.

    lol, I’m just goofin’ around (as you know). I’m with you that there was plenty of criminal conduct all around (banks, mortgage brokers, realtors, borrowers, S&P) that should be prosecuted. And the only thing that will stop this kind of thing is the threat of criminal prosecution (e.g. after Raj Rajaratnam, I suspect that hedge fund guys have largely stopped paying off inside sources for information).

  72. Posted by wrath

    cheers – to a debt free economy!

  73. Posted by VancouverJones

    Wooman summed up the Scam perfectly. Other posters are also correct in pointing out that the borrowers are largely irrelevant to the Scam…they were just kindling used to start the fire. Anyway, Wall St. has already moved on to the next couple of Scams: The unregulated carbon cap and trade market promises to be a “fun” one to watch (no pesky average citzen required to inflate that bubble). The wholesale privatization of public assets at firesale prices will also be interesting to watch. I can imagine what the discussions on this blog will be like in a couple of years: “The State of California is not a victim!! The State is a savy investor and should have known what it was getting into when it sold off the university system”. “The City of Alameda was vicitmized! What choice did they have, either close the schools or sell off the public utility”. “The OWS movement is on it’s last leg now…it was a desperate move to shut down the Twitter Gate bridge”.

  74. Posted by Wooman

    Ellen Brown’s book “The Web of Debt” is a clear bold analysis of how our banking system is a weapon of mass illusion, fraud and domination. Also, if you are ready to swallow the blue pill, watch a wonderful new film that uncovers a very different perspective about the world than many of us have seriously considered: Here’s the trailer http://www.youtube.com/watch?v=EH4fW13vXnQ and here is the website http://www.thrivemovement.com/. Peace

  75. Posted by wrath

    we will consider taking some of your arguments semi-seriously once you learn how to spell correctly (at least your name).

  76. Posted by Rillion

    AT – you may be goofing around with the CC analogy but what you describe is pretty standard and actually happens quite a bit. Final act is bankruptcy where the borrower does get a principal reduction, usually down to nothing being owed if they did it right (and can show a low enough income to the court). In fact it was happening so much that the CC companies paid Congress to change the bankruptcy rules. Of course now that it has become harder to discharge debt in bankruptcy the CC companies were able to lower the interest rates they charge on CC’s (or I am sure they will eventually….)

  77. Posted by A.T.

    Agreed Rillion. And it is true that bankruptcy is an option for shedding debt like this (sometimes, see recent bankruptcy reform act!). However, there is a big downside to bankruptcy as it is a very intrusive process with the court and creditors taking over much of your financial life for quite a while. Not a big deal if you are a poor low- or non-earner, but a huge pain if you have assets and/or income.
    Of course, the point I was making is that a serial refinancer is no different from a credit card churner, but for some reason with the former, the fact that the vehicle for the fraud is a home, the OWS crowd and others seem to give it all a pass while the same crowd does not have a lot of pity for the latter.

  78. Posted by ts364

    I agree with EBguy – great reporting. Nice to know the truth.
    Seems either she wasn’t scammed and is a fake or not everyone has the knowledge to be a mortgage borrower in the current, highly complex environment. Unfortunately that knowledge gap is something that doesn’t get enough coverage. Can’t have it both ways.

  79. Posted by Brahma (incensed renter)

    Actually I don’t agree with either Rillion or A.T., because neither of them seems to grasp that there is a lot of difference between a secured and unsecured debt.

  80. Posted by Margo

    Quite a story. Ms. Richardson has a lot of chutzpah to go along with all that cash she acquired since 1999. Hope she spent some of it on a really nice car which she can now live in. Maybe a 2008 mini-van style. Oh yes, banks played their role in it but banks are not required to make stupid people smart. I think Ms. Richardson is more upset at losing her have-it-all-now lifestyle than losing a roof over her head. OWS should run from this example.

  81. Posted by BillyBalls

    @wooman
    You are enticed daily to part with your money. Its your decision to do so or not.
    Wrath is on point.
    Originating lenders, mortgage brokers, and banks have nothing to do with compensation for the securitizing firms.
    “The banks rigged the ratings agencies to entice the investors into buying “high-grade” securities.”
    - no one can sell you crap unless you don’t do your due diligence.
    “The banks paid Harvard (and other universities per “Inside Job”) professors to write academic papers on the viability of mortgage backed securities and how the real estate market was unshakeable.”
    - lots of bs is written. and is readily disregarded.
    “The banks changed the underwriting guidelines so that any living dork would qualify for whatever loan they asked for.”
    - absolutely true and correct. Most banks did just that.
    “The banks trained their own agents and mortgage brokers how to switch loan programs or lie on applications by telling everyone that there would be no verification process to substantiate the information on the loan applications.”
    - SEVERE federal penalties for doing this.
    “The banks allowed anyone with a client base (i.e. accountants, bookkeepers, tax preparers, etc) to earn lucrative referral fees for “selling” loans to their clientele.”
    ???? There may have been a small scale referral racket, but I’m unaware of this on a large scale.
    Mortgage brokers were the culprit, rather than retail bank originators.
    “Lastly, the banks use an elaborate magic trick (called fractional reserve stealing with no oversight) to create all the money needed to fund all those mortgage loans, even though the money did not exist before those loans funded.”
    Untrue. A bank can’t fund a loan unless it has the cash to do so.
    The cash comes from its depositors, or is borrowed from:
    Federal Reserve (Fed Funds Rate) & (LIBOR – London intrabank offered rate)
    Federal Home Loan Bank
    other banks (generally slightly more expensive)
    You can focus on the woman buying some flat screen TV’s if you want but I think you miss the point.
    No one can hurt you unless you let them.
    The banker/brokers who originated her deal should be flogged. Without the income to support the loan, this woman had no business even applying.
    A banker who offers a too good to be true cash out refi, and ignores the fact that your income can’t support it, still needs your signature to complete the farce.
    The financial knowledge necessary to evaluate this deal is basic math – your income doesn’t support your payments, a is greater than b.
    Unfortunately, it’s easy to ir-rationalize out of that situation. (poor me, I didn’t get it!)
    There are in fact significant laws in place to protect borrowers on single family purchases.
    Her signature on 6 separate truth in lending disclosures would be pretty damning.
    Going further, an investment bank who securitizes crap and then tries to sell it to a fund can’t succeed unless that fund has it’s eyes closed, or is too stupid to know better.
    There are no laws protecting institutions at that level; and a fool and his money are soon parted.
    … and if the fund or bank is so stupid to buy it, then it should fall on its own sword.
    … and if the bank who made that crap can’t sell it, they should have their face ripped off.
    There are homeowners who didn’t take cash out refis.
    There are lenders who didn’t do these deals.
    There are even bankers out there, who god forbid, maintain their fiduciary duty and sleep well at night.
    I agree that there were pigs on both sides of the trough, but the series of events supports the fact that this woman was complicit in her own fate, and then conned the occupy folks into coming to her aid.

  82. Posted by Rillion

    Brahma – Huh? How can you not agree with me? Do you really believe that some people with excessive credit card debt borrowed more from their credit cards in order to make minimum payments, transferred balances on CC’s to new cards, etc until the whole process result in a bankruptcy where the debt was washed away? Cause that’s pretty much all I said. Did everyone do it? No. Was it happening a lot in the 90′s and Congress ended up passing a law at the behest of the credit card companies to make bankruptcy harder? Yes. So what don’t I understand about that?

  83. Posted by Rillion

    FYI – It looks like SFGate has picked up socketsite’s story and is linking to it from their r/e blog.

  84. Posted by Thomas

    Who is the “we” in Michael Moore’s letter? Him and his over sized slice of cheesecake?
    You gotta love a bloated, hypocritical, self-appointed “voice of the people”

  85. Posted by tonyboysf

    The Occupy movement is right about one major theme: Corporations, banks and Wall St. thieves, and rotten politicians are stealing from US, and creating a form of American working poor, sort of indentured slavery, as opposed to upwardly mobile middle class.
    A majority of Americans no longer believe their government is honest, uncorrupt, and working to make everyone’s life better. Unfortunately, they have no clue what to do about it. It’s like asking the mean gangster to stop all of their criminal activities, because we don’t appreciate our children being shot in the street playing out infront of their own house. People in power don’t just give it up because you want them to.
    Michael Moore posted a long list of demands and his ideas to fix things. I can see a few good ideas there, but more of his ideas are just socialist/communist nonsense. They may sound good to the uneducated, but they aren’t proven to be good for the 99.5%.
    As for the lady in S.F. who refied herself out into the streets: it would be interesting to learn what she did with all of that money? It would also be interesting to learn why with all of the free legal and financial advise available, she seems to have not taken advantage of any?
    There was another story about a family that lost a ton of money on WAMU stock: Who forgot to tell them that stock is not a “safe” investment? It may be a great investment at times, but it’s not a FDIC type of thing you just buy and forget about. Very sad to see people lose their life savings over such a basic lack of education. If you own stock – watch it. If you own bank stock, watch it like a hawk!

  86. Posted by wrath

    “The Occupy movement is right about one major theme: Corporations, banks and Wall St. thieves,
    and rotten politicians are stealing from US, and creating a form of American working poor, sort of indentured slavery, as opposed to upwardly mobile
    middle class.”
    That’s a major overgeneralization. What all those entities are doing – some by choice – some because they have to – is shipping jobs abroad – that’s been happening for years. This is partly a result of the high costs of labor/regulation/lawsuits here and that has to be acknowledged. In any event, on this topic the business elite and the NYT liberals agree – the first because they will go under if they don’t do it and the second b/c they are globalists who are happy to try to lift the billions of poor abroad out of poverty. Separately, the social glue keeping this country together has been unraveling for a while so people no doubt feel less loyalty to their constituents/workers.
    The second piece of this is that our population (as compared with others) is increasingly unable to showcase the skills needed to succeed in the modern economy. This is at all levels of education. The WSJ recently reported that our science/math graduates stayed the same (actually some of them are imported) but the liberal arts majors have doubled sinec the 80s. Consequently, absent robotic manufacturing jobs, those people (including college graduates) have been shifted to the only industry that cannot be shipped abroad – the local services industry – what barber shops and McD’s pay we all know.
    You can say it’s the thieves here or the criminals there but the bottom line is the country is going through (and has been for quite a while) a major shift.
    In that sense, the complaints of the Tea Party and the unshaven ones are quite similar.

  87. Posted by tc_sf

    What none of you realize but Occupy SF seems to get is that absolutely none of the big banks had cafe’s or comercial kitchens in their branches when making these loans.
    “SAN FRANCISCO (11/23)- On the eve of Thanksgiving, members of Occupy San Francisco made a major announcement at Justin Herman Plaza, recently rechristened Bradley Manning Plaza, with the creation of the Peoples Reserve Credit Union. In a statement released by the orgnization,”Members of Occupy SF are announcing plans to launch the People’s Reserve Credit Union today at 4:30 pm at Bradley Manning Plaza, formerly Justin Herman Plaza. ”
    [...]
    * Each branch will have a cafe within it and a commercial kitchen available to rent. The credit union will employ students and homeless (c.60 part-time jobs)…
    [...]
    Supervisor John Avalos expressed support for the idea, sendiung out a press release stating,”Out in [my home district of] the Excelsior, we’re underserved by traditional banks…
    http://www.facebook.com/media/set/?set=a.10150393701330817.352124.171020735816&type=3
    The same Supervisor that marches against “predatory lending” also claims that his district is underserved by traditional banks. And if you needed more evidence of the scattershot nature of OSF consider “Bradley Manning Plaza”

  88. Posted by anon

    If a bank wants to loan me $500k in cash right now I promise not to call it predatory!

  89. Posted by HOF

    It is a draw. The lenders and Ms. Richardson should go to jail. To help Ms. Richardson manage her financial affairs in the future, her credit reporting agency files should be annotated to ensure that she is “86′d forever” from again getting getting a mortgage or consumer credit.

  90. Posted by bal

    Back in the day, almost everyone was functioning on the premise that the market would keep going higher forever. Classic bubble psychology where at a certain point, it is going up only because it is going up. While mortgage lenders were guilty of this, they were not the only ones.
    In a weird way, it reminds me of the dot com bubble except that real estate has super long- protracted cycles to deflate. But it was the same mentality: doubling my money in a tech stock or doubling my money in a condo. Everyones loves the game until it goes bust, then it is not my fault.
    Yes, the lending practices are pretty obviously ludicrous in hindsight. But it’s amazing how there is not a point that exists where people have any personal responsibility. If I make money flipping a condo, then I’m a genius; I’m a savvy businessman and good market timer. If the condo goes down, if I get stuck or foreclosed upone, then it’s not my fault– I am a victim. I still have the business cards of two realtors who guaranteed me (yes, they used the word “guarantee”) in 2006, that my condo would double in five years. It’s all one big racket including the huge amount of money the NAR spends lobbying. But it is easier to say the only problem was predatory lending and everyone else is a victim.

  91. Posted by Mike Carter

    The clear implication of this article is that the difference between the $215,000 purchase price and the $660,000 refinanced loan principal balances represented cash out refi proceeds to the homeowner. However, we simply don’t have enough information here to reach that conclusion. I could certainly write a set of loan documents in which the borrower took out the mortgages in the amounts described, without taking out a single penny herself, but with the proceeds instead going to the mortgage brokers, the banks, and all sorts of people even sleazier than me. Let’s face it; maybe I am a racist, but whenever I saw someone like Richardson, living “in the Bayview,” if you know what I mean, my radar goes off, my juices start flowing and I start to think of that pig as a “MARK.” Does that make me a predatory mortgage broker? Maybe so, but whatever. Dumb people in this world get what they deserve, and players like me are the ones that drive the Benzes.

  92. Posted by duh

    Mike Carter– so you’re saying that the entire 660k might have gone to the scummy mortgage brokers and evil banksters and she might have gotten zero benefit from it? what . . . as fees?

  93. Posted by BillyBalls

    @Mark Carter and @Duh -
    I’m actually working late this evening, and you two are simply too good to ignore.
    1) “However, we simply don’t have enough information here to reach that conclusion.”
    Sure we do… …you in particular just can’t do the math.
    The foreclosing amount and missed payments indicate that the vast majority of the loan proceeds went to the borrower.
    2) “I could certainly write a set of loan documents in which the borrower took out the mortgages in the amounts described, without taking out a single penny herself, but with the proceeds instead going to the mortgage brokers, the banks, and all sorts of people even sleazier than me.”
    …and after you did, you’d be posting your message wearing orange pjs, from behind bars, rather than whatever location occupy currently occupies.
    Lets pretend for a moment, Mark, that instead of an occupy malcontent, reeking of german-car resentment and victimization, you were in fact a racist loan agent predator….
    …there are, and have been, laws that protect homeowners from people like you.
    Your vitriol is misplaced.
    Follow the money; It went to her.
    She signed for it six times.

  94. Posted by duh

    BillyBalls– I wasn’t really serious about M Carter’s post. Some people’s posts are so ridiculous and uninformed and those people are usually permanently entrenched in their views, it’s not even worth the bother replying to them. I started to write but realized it was a waste of time . ..

  95. Posted by BillyBalls

    @Duh, I appreciate your response.
    “Mike Carter” was using way too much misinformation in his “parody” for me to keep quiet. Entrenched perhaps, but on landfill.
    In principle, though, I agree with his point. Lots of malfeasance to go around.
    Policymakers who enabled and encouraged lenders to do these deals under the pretense of a social initiative are now turning on those same institutions.
    No real leadership, no programs that work, just populist cover your ass politics until the next election.
    Its politically expedient to villify anyone who can be perceived as making too much money: banks, doctors, stockbrokers, corporations, etc…
    No emphasis whatsoever on programs that create jobs and wealth.
    Make no mistake, these are the same socialist leanings that got southern Europe in trouble.
    In the end, there is no personal accountability for the homeowner who rolled the dice and came up short.

  96. Posted by NoeValleyJim

    I am curious how OSF decided to use this particular person as their example. Does anyone know?
    It would be nice to hear her side of what happened with all the money she pulled out during her serial refinancing.

  97. Posted by lol

    bal’s comment raises an interesting question:
    Back in the day, almost everyone was functioning on the premise that the market would keep going higher forever.
    Our economic model is functioning on a few basic assumptions:
    1 – Population would always grow
    2 – This population would always grow more educated
    3 – Land is limited
    4 – Technological, agricultural and industrial progress, on the back of population growth with more skills would almost ensure a global 4 to 5% growth for the foreseeable future.
    We know these 4 tenets are true when looked from very far away, but the devil is in the details. Ask “Where”, “When” and “How” on all of these points and you’ll get a much more clouded picture.
    In theory with a few good “given”s, you cannot go wrong if you go with the flow that will inevitably follow these tenets.
    Question:
    How do you invest to maximize your profits in as little time as possible?
    Answer:
    Bet on future growth. Either economical (government debt) or real estate (individual debt).
    What they forgot is you have to make sure the gains would be benefiting the overall system and helping perpetuate growth.
    No such thing happened.
    The “borrowed future growth” was wasted on:
    - Cheap imports from China (growth exported to China for a quick one-time profit)
    - Unnecessary expenditures (pergraniteel, vanity “self-enlightenment” education, extra cars that are not more reliable nor faster)
    - Capital accumulation among the insiders and other big enough players (they knew this cash would not grow back before long).
    This money could have been used on so many forward-looking projects. With trillions of borrowed money, we would have gotten rid of fossil fuels, moved to a universal kick ass health care system, provided a GI bill in par with what the WWII vets had, and so on…

Add a Comment

Your email address will not be published. Required fields are marked *