Smug Smiles and Full Diapers--What the conviction of an Indiana sheriff can remind us about civics

Lake County Sheriff John Buncich was recently convicted of fraud.

While hearing of the conviction did not surprise me, it reminded me of questions I have held through the years. First, the Lake County, Indiana Sheriff's office is a somewhat flawed place. I remember hearing from a friend of mine who got stranded near Gary. Although an officer was nice enough to give him a ride, he had to endure "warnings" about, and racial epithets related to, African-Americans throughout the ride. This was during one of Buncich's reigns.

During another of his reigns, there was an alleged murder in my neighborhood. For some reason, it brought out the Lake County Sheriff as well as the local police. The Sheriff's officers were truly foul people--they ran door-to-door with the energy of excited puppies, speculating the death was a drug crime. Their reactions would have been endearing in a Barney Fife way if not so hateful. They made the episode of The Andy Griffith Show where Andy deputizes Goober look like a stellar police training film. In fact, as I told them was likely, it was a crime of passion. The family affected was in no way involved with drugs. It turned out one spouse had walked in on the other "cheating" and had reacted . . . explosively. Of course, neither the Lake County goons nor the local "press" ever corrected the "drug" story with the public, so the surviving child got to grow up with the stigma attached by shoddy police work coupled with racism.

The real question, though, isn't whether there are flaws. It is why people keep voting for these flawed representatives. In Northwest Indiana, many people brag on this kind of voting with smug looks on their faces, clearly thinking their ignorance is "cute." It is not so cute for a black family whose reputation is smeared or crime victims who don't get justice because we put reprehensible in people in office time and time again.

Although the Supreme Court has deemed much of the Voting Rights Act irrelevant, we really need a new, expanded one. The Voting Rights Act is largely limited to "covered jurisdictions" based on a problematic history, and it forbids practices like gerrymandering and imposing a poll tax or literacy tests. While these protections are important, there is the question of how people are disenfranchised through lack of basic, civic knowledge.

When I ran for a political office in the 1990s, I encountered a lot of weird behavior. There was the smug insistence on voting for a known wife-beater (person, not t-shirt) because, "I knew him since he was in diapers." However, more troubling were people who were disenfranchised for low amounts of money.

When a woman told me should could not vote for me because she would lose her place as an election judge, I assumed this was a mighty position. After all, one would have to be paid a lot to be disenfranchised in exchange for the job. However, the job paid $50.00 for a grueling day of work. Some years might bring two opportunities ($100.00), but some brought none. Others gave up space in their yards for election signs--to the tune of $5.00 per election. Even people holding onto coveted municipal jobs were making a whopping $18,000 year--a salary easily matched (or beat) with honest work in a private-sector job with soul intact.

In the end, questioning of people brought one common theme: they honestly believed they could be observed in the voting booth. Maybe they were--many had stories of lost jobs and other repercussions following a vote. It seems more likely that a stray word about how one voted got back to the wrong person.

Northwest Indiana voters put up with a lot, seeing a lot and saying nothing. Someone knew--some spouse or employee or contractor--about the Buncich scandal before it erupted. But people said nothing. For years. Through multiple Buncich reigns.

Before that, a powerful county politician was controlled by one disgusting, corrupt family. Word was (as was told to me), the drunken patriarch had dangled the politician, a lawyer, from a high window by his feet to drive home the point that he would do the family's bidding. He obeyed (maybe liking not having his skull crashing down onto pavement) for years before he was caught. His misdeeds were public secrets, eliciting that sleazy, aren't-I-cute smile from any number of voters--until he was caught. He crashed so hard and fast that I was the only person civil enough to give him a few minutes at a fundraiser after the "public secret" became public. He ended up doing time in jail, and losing his Illinois and Indiana law licenses.

To this day, Indiana's lack of public transit is one of this best indicators of corruption. Money enters the area, but it does not go into buses and trains. Suspecting we knew where the money went, a friend and I dined at a watering-hole known to be popular with certain political appointees who control transit money for Northwest Indiana. Although the now-shuttered restaurant was truly vile, we poked down a bit of what they called food. We asked for our bill to be applied to the transit conglomerate's tab . . . and the waitress smilingly complied. Perhaps it was the fried gristle, but we didn't have the stomach to carry out fraud. We quickly called the waitress back and settled our bills with cash.

Indiana needs an enhanced Voter Rights Act of its own. Basic civic education is sorely lacking--voters at least deserve to know they are not watched/recording in their polling places. Perhaps the education should be tied to eligibility for a driver's license, since poor political choices have resulted in transit monies being pocketed and few public transit options--making driving a necessity for survival.

At any rate, it is time to wipe the smug smiles away and stop selling votes. And surely we can find a better basis for electing officials than our memories of their full diapers.

Feds Determined to Deny Due Process to Foreclosure Defendants

As I have pointed out before, the banks need to do some time. Perjury is a jailable offense, and it is perjury to sign a false affidavit. The banks have admitted to signing false affidavits, a large part of the robosigning scandal. Instead, the Federal regulators are determined to let the banks escape punishment and to not even require any meaningful change in practices.

After the robosigning scandal became public, the states' attorneys general began an investigation that has resulted in a weak draft settlement. I have written about the proposed settlement and its problems on this blog before.

Around the time of the weak proposal by the attorneys general, the Fed stated it had performed a cursory review of a few foreclosure files and concluded that there was not problem. The Fed maintained that no foreclosure was done where there was not a "substantial default." As I mentioned in a previous blog post, this was a mischaracterization of the evidence--foreclosure in the absence of any default by the homeowner is extremely common. Moreover, the Fed ignored due process. Even if one is in "substantial default," one is entitled to legal protections. These include the right to notice and the opportunity to be heard about the alleged default (due process) and the right to cure the default and save the home (redemption).

Now, it appears that Federal regulators will let the banks off the hook with a settlement even weaker than the proposed attorney general settlement. The settlement is in the form of a consent decree (court order), making it more likely that the banks will try to use the settlement to say that homeowners have lost their rights to any legal action for the banks' wrongdoing.

The settlement allows banks to appoint their won "monitor"--a committee chosen by the Board of Directors of each bank. The bank's committee will tell the Fed what needs to be done.

The primary duty of the banks under the settlement is to comply with existing law. Problems like assignments from Mortgage Electronic Registration Services (MERS) are handled on a business as usual basis--with banks promising to get the documents required to do a foreclosure from MERS this time. This is a legal requirement that should have been followed in every foreclosure.

The banks can retain an independent consultant to conduct reviews of completed residential foreclosures. The review will only cover those with judgments or foreclosure sales (auctions) from January 2009 until December 2010.

The independent consultant will set criteria for evaluating the reasonableness of fees and penalties set during the foreclosure process. This circumvents another requirement that the review will include evaluating whether fees and penalties were consistent with the loan documents.

In the end, the bank can give a "reasonable" sum of money if mistakes were made in a foreclosure.

These procedures, under control of the banks, further circumvent due process by placing a stamp of approval on foreclosures that were already completed. This indicia of legitimacy may be invoked to stop actions by the states or by individual homeowners to redress the mistakes made by the banks.

The provision for payment of money shows perhaps the greatest disregard for the special position of homeowners and the right of redemption. Law in the United States recognizes that real estate is non-fungible. For example, one cannot be compensated for losing the opportunity to own one house by substituting another or with payment of money. This is true even if one is buying a McMansion in a tacky subdivision--if the buyer selects the McMansion on Lot A, he or she cannot be forced to instead accept the identical McMansion on Lot B. This is because the law recognizes that real estate is unique, the opposite of money--where one $1 bill is generally as good as the next.

Because of this special status, additional barriers exist before real estate is taken away. One of the most notable of these in the foreclosure area is the right of redemption. This is the right to pay off the sum owed and save the property. Preventing someone from doing this--for example, by refusing to take the money or making it impossible to pay--is called "clogging the equity of redemption."

If homeowners in foreclosure were charged too much in fees and penalties that had to paid to redeem the property, then the right of redemption was clogged. A home was lost where it might have been saved through exercising the right of redemption if the extra fees and penalties had not created a "clog." The mere payment of money is not sufficient to make these homeowners "whole," or in the same position as they would have been had the equity of redemption not been clogged.

It is upsetting that many consumer advocates bemoan the possibility that the settlement will be used to prevent future lawsuits or actions, but do not grasp the harm that has been done to the concepts of due process and redemption. These ideas protect the rights of every litigant, and the concept of redemption helps guarantee a home can be saved in many circumstances. Actions that undermine these concepts make it more likely that a home will not be a good investment in the future--it will remain subject to being taken in an arbitrary and unjust way.

The rush of the Fed to bargain away your rights is one more reason to consult with a HUD-certified housing counseling agency or reputable lawyer right away if you are in foreclosure. If it becomes more difficult to vacate (set aside) wrongful foreclosures, it will be more important than ever to fight each foreclosure carefully when it is initially filed in court.

The entire proposed settlement is here: http://cdn.americanbanker.com/media/pdfs/040111CandD.pdf

The Good, the Bad, and the Unethical: Hints for finding a good lawyer

There is a lot of fraud directed toward homeowners in foreclosure. Rescue scammers, including attorneys, realize that a homeowner faced with the loss of his or her home is vulnerable. Homeowners will pay a lot of money for nothing from a lawyer with a fancy office and slick story while viewing me with distrust because I tell the truth: I cannot guarantee a result.

Many attorneys are taking unethical actions. These include soliciting clients at the courthouse. This is illegal.

Other attorneys promise to "delay" the foreclosure. This is unethical. The rules governing attorneys do not allow anything to be done just to cause a delay. There are many steps an attorney can do, if justified after reviwing an individual case, that happen to also slow down the foreclosure. But, an attorney who promises "a delay" without carefully considering every aspect of your case is breaking the rules--the same rules that guard against the attorney stealing your money or selling your confidential information.

Another unethical practice is taking money on a monthly basis, often equivalent to half one's mortgage payment. This is not permitted because attorneys are required to charge a fee that is reasonable related to services performed. During a lawsuit, there are many months when the attorney does not do anything. For example, the judge may have given the bank's attorney a month to file a paper, and the homeowner's attorney is simply waiting.

I had a recent email inquiry from someone outside my state who wanted to know how to find a good attorney, and may answer is below. For those in foreclosure, one of the most important things is to start out talking to a HUD-Certified Housing Counseling Agency. These services are FREE. A lawyer may be needed, but the counselor can help homeowners get a good start. A listing is available at www.hud.gov

Here are some tips for seeking an attorney that is not out to take advantage of you. There is no substitute for your good judgment after you speak with theGood attorneys:

--Don't advertise with huge ads on the back of phone books or on late-night TV or on billboards

--Don't tell you you have only one option, such as bankruptcy

--Don't sell products like a "forensic loan analysis" or say they are "experts" in areas like being a "short-sale" expert or "modification" expert

--Won't take your money for something another service will do for free. Free services include HUD-Certified Housing Counseling Agencies. There are exceptions--some people choose to hire me once I tell them there are other options. In cases where they have the money, that is fine

--Have a written retainer that tells you your rights and responsibilities

--Have a clear billing plan based on an hourly rate (NOT a monthly payment regardless of whether work is done that month) OR based on recovery from a third-party as a contingency of winning where the main goal is to sue someone and win money (rarely the case with mortgages; almost always the case with things like car accidents)

--Provide you with monthly statements or bills or some other way to know what is being done for you and why you are being asked to pay

Try going to your bar association to see if they have a referral service. It is best if these attorneys are screened. Check the state disciplinary records (official records maintained by the state disciplinary board, usually available online--NOT just a site that lets comsumers post comments) before hiring anyone. The latter often contain falsified information that attorneys post for each other as "satisfied clients."

Bear in mind that every case has a deadline called a statute of limitations. Once this passes, the legal claim is lost. Never delay in seeking an attorney, and always be clear with attorneys about dates as you describe your case.


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