The Long-Term Cost of the Mortgage Fraud Meltdown — The Real Legacy of Wall Street

Editor’s Note: Why do I do this? Because we are delivering a message to future generations about how the world works contrary to our constitution and contrary to American values and ideals. Conservatives conserve nothing except the wealth of the fantastic few while the liberals liberate nobody from the yoke of economic slavery. Maybe it’s all a game. I won’t play and if you care about this country and wish to avoid a societal collapse, you should stop playing too.

History has shown us with grim clarity what happens to any country or empire when the power and the wealth gets so concentrated in just a few people while the rest of the population can’t keep a roof over their head and can’t eat food and can’t get medical care, all hell breaks loose. Galbraith, IMF economists, World Bank economists, all know what is going to happen do to our failure to police our own, our failure to make it right and our failure to make amends to our allies or would-be allies.

Children are learning an important lesson: in their world, Mom and Dad are powerless to prevent the worst things from happening and there is nobody else they can depend upon. A whole generation is growing up with the notion that the American Dream is an unknown, unknowable fantasy. Every time the far right asserts personal responsibility in the face of a wretched fraud committed on most of the country, they close the gate a little more, waiting for the final slaughter. Every time the far left wimps out on their own paltform, the one the people elected them on for CHANGE NOW, they deceive and abandon our citizens.

And so we are a Prozac nation because everyone is depressed. We are a Xanax nation because everyone is so stressed out we can’t think straight. And those of us who are entering our twilight years see a future where our children and grandchildren and their children will lead bleak lives of quiet desperation in a country which proclaims free speech and assembly but has surrendered that basic right to about 100 institutions that control the lobbyists who control the flow of money in Washington and state houses.

In April, 2007 stocks were up, confidence was high and everyone had been convinced that all was well without questioning anything. Meanwhile in the inner recesses of the Federal Reserve and halls of power of the executive branch and the U.S. Department of Treasury in particular, they knew the collapse was coming and the only reason they did nothing was political — they didn’t want to admit that the free market was not working, that it wasn’t free, that it was controlled by monopoly and oligopoly, and that the government wasn’t working either because we the people had allowed people to get re-elected despite their sell-out of our countries and our lives.

In I did some very simple calculations and determined that the DJIA was not actually worth 14,000, it was worth 8,000. As it came down, more stumps revealed themselves as the high water receded. The equities market is overpriced by about 25%-30%. Housing is still inflated by 15%-20%. Nobody wants to hear this. The dollar is in a swan dive because everyone in the world knows the reality except the citizens of the United States of America where we have a “free press” that would rather entertain us than actually tell us the news.

I’m doing my part. What are you doing to end this catastrophe?

Job Woes Exacting a Toll on Family Life

THE WOODLANDS, Tex. — Paul Bachmuth’s 9-year-old daughter, Rebecca, began pulling out strands of her hair over the summer. His older child, Hannah, 12, has become noticeably angrier, more prone to throwing tantrums.

Initially, Mr. Bachmuth, 45, did not think his children were terribly affected when he lost his job nearly a year ago. But now he cannot ignore the mounting evidence.

“I’m starting to think it’s all my fault,” Mr. Bachmuth said.

As the months have worn on, his job search travails have consumed the family, even though the Bachmuths were outwardly holding up on unemployment benefits, their savings and the income from the part-time job held by Mr. Bachmuth’s wife, Amanda. But beneath the surface, they have been a family on the brink. They have watched their children struggle with behavioral issues and a stress-induced disorder. He finally got a job offer last week, but not before the couple began seeing a therapist to save their marriage.

For many families across the country, the greatest damage inflicted by this recession has not necessarily been financial, but emotional and psychological. Children, especially, have become hidden casualties, often absorbing more than their parents are fully aware of. Several academic studies have linked parental job loss — especially that of fathers — to adverse impacts in areas like school performance and self-esteem.

“I’ve heard a lot of people who are out of work say it’s kind of been a blessing, that you have more time to spend with your family,” Mr. Bachmuth said. “I love my family and my family comes first, and my family means more than anything to me, but it hasn’t been that way for me.”

A recent study at the University of California, Davis, found that children in families where the head of the household had lost a job were 15 percent more likely to repeat a grade. Ariel Kalil, a University of Chicago professor of public policy, and Kathleen M. Ziol-Guest, of the Institute for Children and Poverty in New York, found in an earlier study that adolescent children of low-income single mothers who endured unemployment had an increased chance of dropping out of school and showed declines in emotional well-being.

In the long term, children whose parents were laid off have been found to have lower annual earnings as adults than those whose parents remained employed, a phenomenon Peter R. Orszag, director of the White House Office of Management and Budget, mentioned in a speech last week at New York University.

A variety of studies have tied drops in family income to negative effects on children’s development. But Dr. Kalil, a developmental psychologist and director of the university’s Center for Human Potential and Public Policy, said the more important factor, especially in middle-class households, appeared to be changes in family dynamics from job loss.

“The extent that job losers are stressed and emotionally disengaged or withdrawn, this really matters for kids,” she said. “The other thing that matters is parental conflict. That has been shown repeatedly in psychological studies to be a bad family dynamic.”

Dr. Kalil said her research indicated that the repercussions were more pronounced in children when fathers experience unemployment, rather than mothers.

She theorized that the reasons have to do with the importance of working to the male self-image, or the extra time that unemployed female breadwinners seem to spend with their children, mitigating the impact on them.

Certainly, some of the more than a dozen families interviewed that were dealing with long-term unemployment said the period had been helpful in certain ways for their families.

Denise Stoll, 39, and her husband, Larry, 47, both lost their positions at a bank in San Antonio in October 2008 when it changed hands. Mrs. Stoll, a vice president who managed a technology group, earned significantly more than her husband, who worked as a district loan origination manager.

Nevertheless, Mr. Stoll took unemployment much harder than she did and struggled to keep his spirits up, before he landed a new job within several months in the Kansas City area, where the family had moved to be closer to relatives. He had to take a sizable pay cut but was grateful to be working again.

Mrs. Stoll is still looking but has also tried to make the most of the additional time with the couple’s 5-year-old triplets, seeking to instill new lessons on the importance of thrift.

“Being a corporate mom, you work a lot of hours, you feed them dinner — maybe,” she said. “This morning, we baked cookies together. I have time to help them with homework. I’m attending church. The house is managed by me. Just a lot more homemaker-type stuff, which I think is more nurturing to them.”

Other families, however, reported unmistakable ill effects.

Robert Syck, 42, of Fishers, Ind., lost his job as a call-center manager in March. He has been around his 11-year-old stepson, Kody, more than ever before. Lately, however, their relationship has become increasingly strained, Mr. Syck said, with even little incidents setting off blowups. His stepson’s grades have slipped and the boy has been talking back to his parents more.

“It’s only been particularly in the last few months that it’s gotten really bad, to where we’re verbally chewing each other out,” said Mr. Syck, who admitted he had been more irritable around the house. “A lot of that is due to the pressures of unemployment.”

When Mr. Bachmuth was first laid off in December from his $120,000 job at an energy consulting firm, he could not even bring himself to tell his family. For several days, he got dressed in the morning and left the house as usual at 6 a.m., but spent the day in coffee shops, the library or just walking around.

Mr. Bachmuth had started the job, working on finance and business development for electric utilities, eight months earlier, moving his family from Austin. They bought something of a dream home, complete with a backyard pool and spa.

Although she knew the economy was ultimately to blame, Mrs. Bachmuth could not help feeling angry at her husband, both said later in interviews.

“She kind of had something in the back of her mind that it was partly my fault I was laid off,” Mr. Bachmuth said. “Maybe you’re not a good enough worker.”

Counseling improved matters significantly, but Mrs. Bachmuth still occasionally dissolved into tears at home.

Besides quarrels over money, the reversal in the couple’s roles also produced friction. Mrs. Bachmuth took on a part-time job at a preschool to earn extra money. But she still did most, if not all, of the cooking, cleaning and laundry.

Dr. Kalil, of the University of Chicago, said a recent study of how people spend their time showed unemployed fathers devote significantly less time to household chores than even mothers who are employed full-time, and do not work as hard in caring for children.

Mr. Bachmuth’s time with his girls, however, did increase. He was the one dropping off Rebecca at school and usually the one who picked her up. He began helping her more with homework. He and Hannah played soccer and chatted more.

But the additional time brought more opportunities for squabbling. The rest of the family had to get used to Mr. Bachmuth being around, sometimes focused on his search for a job, but other times lounging around depressed, watching television or surfing soccer sites on the Internet.

“My dad’s around a lot more, so it’s a little strange because he gets frustrated he’s not at work, and he’s not being challenged,” Hannah said. “So I think me and my dad are a lot closer now because we can spend a lot more time together, but we fight a lot more maybe because he’s around 24-7.”

When Rebecca began pulling her hair out in late summer in what was diagnosed as a stress-induced disorder, she insisted it was because she was bored. But her parents and her therapist — the same one seeing her parents — believed it was clearly related to the job situation.

The hair pulling has since stopped, but she continues to fidget with her brown locks.

The other day, she suddenly asked her mother whether she thought she would be able to find a “good job” when she grew up.

Hannah said her father’s unemployment had made it harder for her to focus on schoolwork. She also conceded she had been more easily annoyed with her parents and her sister.

At night, she said, she has taken to stowing her worries away in an imaginary box.

“I take all the stress and bad things that happen over the day, and I lock them in a box,” she said.

Then, she tries to sleep.

16 Responses

  1. Nye,

    Thanks for the endorsement re: Robert.


  2. I am looking for a lawyer that “gets it” in New Jersey. Please let me know a lawyer that you highly recommend.

    Mr. Neil and Mr. Kaiser, thank you for giving us hope and support to fight for our rights.


  3. Robert has been a great job on investigating this story on LPS and Fidelity. Any of you with information, kindly get to him. Many thanks!


  4. i am committed to fight till the end……and my attitude will be like Zack Brown once said….

    I got my toes in the water, as in the sand Not a worry in the world, a cold beer in my hand Life is good today. Life is good today.

    Get well soon Neal

  5. THOU, too, sail on, O Ship of State!
    Sail on, O Union, strong and great!
    Humanity with all its fears,
    With all the hopes of future years,
    Is hanging breathless on thy fate!
    We know what Master laid thy keel,
    What Workmen wrought thy ribs of steel,
    Who made each mast, and sail, and rope,
    What anvils rang, what hammers beat,
    In what a forge and what a heat
    Were shaped the anchors of thy hope!
    Fear not each sudden sound and shock,
    ‘Tis of the wave and not the rock;
    ‘Tis but the flapping of the sail,
    And not a rent made by the gale!
    In spite of rock and tempest’s roar,
    In spite of false lights on the shore,
    Sail on, nor fear to breast the sea!
    Our hearts, our hopes, are all with thee.
    Our hearts, our hopes, our prayers, our tears,
    Our faith triumphant o’er our fears,
    Are all with thee, -are all with thee!

    Henry Wadsworth Longfellow

  6. The American Dream : It was a mirage !
    The House with the white picket fence . Two cars in the
    garage .
    ” My Three Sons , Ossie & Harriot , Fathers Knows Best ,
    Leave it to Beaver ….it was Madison Avenue Advertising …buy this , Buy that, You have to have this… You’ll be more attractive if you use this , or wear that…Bla…Bla…Bla…
    We became consumers slaves. Like the donkey and the carrot hanging on the stick. Carrying a heavier load as the years passed by …
    Until the weight is so heavy ..the donkey sits down,,and stops. That us ..the tired and broken donkey…
    The owner of the carrot run us to the ground .
    All great Nations Rise and Fall…..but they don’t disappear.
    The most powerful Nation ..the British Empire ,
    Napoleon’s France, World Conquistadors of Spain…
    The Roman Empire…..all were powerful for a while … but with the passage of time .. they collected up their gear and went home .They became less rich ,but they live their lives content and in peace within their borders.
    Its time for us to pick up our gear ..spread out all over the world , and come Home .
    Lets stop spending zillions of our tax payers money on
    15 million dollar fighter jets , 50 million dollar submarines,
    100 billion aircraft carriers ..
    Lets close up all those bases we support to protect.. who from what ???? ?Bring our troops back home.

    Just like the other super powers of the past ..they loved wars so they could conquest smaller nations , to conquer weaker people to have more slaves and colonies, to dig up or steal more and more Gold. …

    In time ….They ran out of money , they all went bankrupt eventually.

    It’s our turn.. … the USSR went out of business recently,
    after 10 years of war in ” Afghanistan ” ….. are we there in our 7th year ? and we are following right behind them ..making the same mistakes. History repeats its self .

    But the USA is such a massive, rich, and beautiful country…we have all the Natural blessings any nation in the world. could dream about..

    So lets not weep, and cry…yes it’s going to be very rough…
    but we as a Nation will become a happier , and content.
    and we so much room to grow.inside our own borders..


  7. I think one way to avoid the entire mess in the future is to institute a mortgage inspection for all homebuyer or homeowners looking to refinance.

    Currently buyers pay for a home inspection, termite inspection, why not a mortgage inspection.

    When you buy a used car from a private party do ask the owner how it runs and write a check?
    Probably not! I would think the prudent thing to do would be to pay a mechanic to complete a inspection of the vehicle! That’s pretty common sense…people pay 200 to 300 to have a Mechanic look over a 10k purchase.

    Why? Because the consumer knows in exchange for a fee they will get a third party objective opinion.

    The same would be true for a mortgage inspection. Objective opinion on costs, rate, fees, terms of note etc. Why ask the loan office if the deal is fair… We all know the Answer would be of course!

    Before we change history we need to change the way people obtain a mortgage loan! Third party inspections are a great start. The governments increase in transparency is and will be a huge failure because consumers don’t read the fine print an lack the requisite knowledge to make an informed decison on the largest financial investment most will ever make.

    We could all use the help

  8. a story about how these peole are stealings homes and unfortunately getting away with it and how we Americans need to fight back would be very becoming of Businessweek

    what a rip off losing your home to people who never put up a dime and who forge every single document to do so and get away with it.

    how many people are now homeless and the business magazines do not write about it.
    I guess it may be advertising revenue.

  9. “So where does that leave us in the food chain?”

    First Masticated.

    Then Expectorated.

    Any more questions?

    Lisa E (Pro Se, Florida)

  10. “And so we are a Prozac nation because everyone is depressed. We are a Xanax nation because everyone is so stressed out we can’t think straight. ”

    Quoted from the above article; consider this. The drug companies own the banks, who in turn own the government. This is not just my opinion, it happens to be true. So where does that leave us in the food chain?

  11. Thanks for putting this up, Neil. This IS the real damage. We have lived it for over 3 years. The kids are the ones who take it the hardest. My children have schoolmates who have been displaced by foreclosure. They, too, have suffered emotionally because of the stressful situtation brought on by predatory lending and the threats of foreclosure and homelessness. They stopped asking for “things” (rented movies, Dairy Queen, candy bars or even gum in line at the grocery) a long time ago. They have felt the stresses of their parents’ struggle. And they wear the scars.

    I, personally, am in a business that is directly affected by employment and financial stability: automobile sales. When sales figures go from 16 million to 10 million/year, your income stream disappears overnight. We have seen a severe downturn (and I’m in a premier import-branded store) in sales, and there is no end in sight. I do believe that the worst is yet to come. This rally we see on Wall Street right now is the beginning of the “Suckers Rally”. Commercial real estate is tanking (because of the retailers imploding). I look across the street at the suburban shopping mall and see the empty, boarded up storefronts. As we watch the fundamentals of our economy deteriorate (employment, homeownership, and the value of the Dollar, particularly)we can only wonder what the future has in store for the children we brought unto this world. This is not the country I grew up in. I am sorry to say that. My belief system was based in work ethic, capitalism, and I as I got older, making sure to think a little further into the future. And doing the right thing. I have always voted, but now, the lines are blurred. Maybe the lines don’t exist at all. Just two different takes on how to widen the divide and steal more wealth. It’s time to make something happen. There are plenty of angry people. We must all make an effort to channel the angst and energy of those folks, along with our own, and take control of this country.

    I will undertake this challenge to save our country, one neighbor, one foreclosure, and one predatory lender at a time. You don’t have to be a LAWYER to TALK about the LAW, DO YOU?

    Foreclosure Defense Workshop
    Community Center
    Tuesday Night
    Bring a Friend!

  12. Robert Berner

    yes i have both info …
    Quality Loan Service (AKA McCarthy & Holthus LLP, LSI, LPS, Fidelity National, Fidelity ASAP, etc) this should keep you busy!

  13. I am a writer for BusinessWeek. I am doing research on Lender Processing Service, formerly known as Fidelity National Information Systems. I am looking at it’s default servicing buiness. If you have any cases involving these entities please contact me. My phone number is 312-451-7149. My email is Thanks for your help, Robert Berner

  14. THANK YOU NEIL for a most poignant appeal to our sensibilities and better natures, if we and those who come after us are to have any primacy or future as a nation.

    Who of us cannot fully agree with you we are handing our descendants a damaging malaise from which few will escape, just as surely as if nationwide we as stewards of this providential bounty, had allowed deadly cancerous toxins to seep into aquifers across our land. Sadly, we as individuals and collectively as a nation seem impotent to counter this fate in the face of an overwhelming imbalance in the distribution of wealth and power. How do we wrest the levers of power from the oligarchs and restore to ourselves our balance, good sense and cherished democracy?

    KOYAANISQATSI is a Hopi Indian word meaning “life out of balance.”

    How do we restore a balance of power so that 300 million people are not led like lemmings to their almost certain demise?

    Why does our political system feel unresponsive and broken?

    Why does our judicial system seem to repeatedly show bias and favor to corporate or moneyed interests?

    Why is economic justice meted out in proportion to one’s ability to pay for it or one’s good fortune to find good and effective counsel, while denied to those rendered impecunious who can do neither?

    Why is consensus and truth denied?

    Why do strides taken by dint of hard, thoughtful and serious work get eviscerated or lost by successor ‘know-nothing’ or beholden incumbents?

    What do visionary change agents George Washington, Mikhail Gorbachev, FW DeKlerk and Ralph Nader have in common? Like you, Neil, all Piscean by temperament, they challenged the status quo and each acted in times of crisis, at tipping points, to articulate their profound concerns for the good of the commonwealth and, where able or empowered, to oversee major transformations that speak to our better angels. They ” practice with all the skill of our being the art of making possible.”

    On this very inspiring blogsite which you birthed and ably guide, take a look here at the ‘thousand points of light,’ all the countless creative initiatives and outreach taken by those who, in working hard to contest their own foreclosures, bring others along in the learning, ever mindful of the greater good of our commonweal.

    THE ART OF MAKING POSSIBLE, by Nancy Scheibner

    My entrance into the world of so-called “social problems”
    Must be with quiet laughter, or not at all.
    The hollow men of anger and bitterness
    The bountiful ladies of righteous degradation
    All must be left to a bygone age.
    And the purpose of history is to provide a receptacle
    For all those myths and oddments
    Which oddly we have acquired
    And from which we would become unburdened
    To create a newer world
    To transform the future into the present.
    We have no need of false revolutions
    In a world where categories tend to tyrannize our minds
    And hang our wills up on narrow pegs.
    It is well at every given moment to seek the limits in our lives.
    And once those limits are understood
    To understand that limitations no longer exist.
    Earth could be fair. And you and I must be free
    Not to save the world in a glorious crusade
    Not to kill ourselves with a nameless gnawing pain
    But to practice with all the skill of our being
    The art of making possible.

    “Earth could be fair”
    “Let’s roll”

    B e M o v e d @ A O L .c o m

  15. And sadly…………..oh, so sadly………………this is just the very beginning…………….

    Defend your homes America!

    Defend your homes!

    Lisa E. (Pro Se, Florida)

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