Honolulu Weekly | The Foreclosure Fiasco, The Ethics of Big Banking in America

“I am the editor of the Honolulu Weekly and just did a cover story on the Foreclosure Fraud in Hawaii by Bank of America. Go to honoluluweekly.com to read cover story. (4/20/11). I would appreciate any feedback and might be able to use it as a letter to the editor. Aloha!”  Lucy Jokiel

Feedback can be posted on the message board as a reply to her comment here…


The Foreclosure Fiasco

The ethics of big banking in America

by Lucy Jokiel

Some of Hawaii’s homeless say living on the beach is their preferred lifestyle, choosing to call themselves “houseless” rather than “homeless.” But for many of the 52,000 local Bank of America mortgage holders who have lost–or could lose–their houses due to the bank’s nationwide frenzy of mortgage foreclosures, the possibility of being houseless is terrifying.

Criticism is also directed at a handful of other large mainland banks, but in Hawaii, more than 30 percent of the mortgage foreclosure complaints target Bank of America (BofA), America’s largest bank, according to a report by Faith Action for Community Equity (FACE). Founded in 1996, this organization has been dealing with borrowers’ foreclosure problems for several years. The top 10 mainland lenders foreclosing in Hawaii represented 86 percent of all foreclosure notices in the state in the month of November, according to FACE. This data implies that a significant proportion of families facing foreclosure cannot meet face to face with the off-shore mortgage lender or servicer who is foreclosing on their home.

Maui homeowner, and BofA mortgage customer, Wayne Salas says, “Bank of America has misled my family and me for more than two years, enticing us to drain our savings and our pension and playing games with my families’ future. The bank is threatening to take the home that I grew up in and where I raised my family.” Salas, a longtime City & County employee, will retire from the Hawaii Army Reserve with 31 years of service in June. “We are a hardworking family, and we want to pay our mortgage,” says Salas. “But Bank of America has rigged the system; and no matter how much we pay, they have found ways to make sure that they will get our home in the end.”

Check out the rest here…



5 Responses to “Honolulu Weekly | The Foreclosure Fiasco, The Ethics of Big Banking in America”
  1. Marcy says:

    Here’s what was not said.

    HB 1411 and SB 651 Mandatory mediation; bills got gutted and there is a fight going on to
    “ungut them” Roz Baker and Herkes are fighting for the people of Hawaii!

    What was removed?

    1) The foreclosure moratorium ( that had been decreased from 6 months, to 5 months to 3 months to gone ! )

    2) Face to Face mediation, they want to do mediation by “skype” because they do not want to have to pay to fly to Hawaii where they do not have single bank!

    3) EXCLUDING all home-owners who have have already gotten a foreclosure notice!
    That’s right, drop the moratorium, and during the time it takes to get the mediation program going, the banks will sent foreclosure notices on everyone!!

    4) Requiring the banks show PROOF of Ownership with original notes and proper chain of Title !!!!!!!!

    Number 4 is the worst of all, because if they actually had to show proof of ownership, everything else would self correct!!!

    After seeing what happen in Arizona with SB 1259 , you just KNOW how important a point this is!!!!!!!!!!!!!

    But Hawaii is still fighting over this bill and we need all the help and support we can get!!!!!!!!!

  2. Reuben Nieves says:

    Homeowners across the nation are being foreclosed unconstitutionally when banks lke Bank of America are foreclosing non judicially. They are NOT private corporations as they allege. National Banks are public corporations because they were created for public and national purposes.

    In Easton v. Iowa,188 U.S.220 (1903) the Court said of national banks:
    We think that this view of the subject is not based on a correct conception of the federal legislation creating and regulating national banks. That legislation has in view the erection of a system extending throughout the country, and independent, so far as powers conferred are concerned, of state legislation which, if permitted to be applicable, might impose limitations and restrictions as various and as numerous as the states. Having due regard to the national character and purposes of that system, we cannot concur in the suggestion that national banks, in respect to the powers conferred upon them, are to be viewed as solely organized and operated for private gain. [bold & underline added]
    The Court in Easton went on to say at p. 230 that the principles enunciated in McCullough v Maryland, 17 U.S. 316(1819), and in Osborn v Bank of United States, 22 U.S.738 (1824), though expressed in respect to banks incorporated directly by acts of Congress, were still applicable to the later and present system of national banks. The Court cited with approval the holding of the latter as expressed by Chief Justice Marshall:
    The bank is not considered as a private corporation whose principal object is individual trade and individual profit, but as a public corporation created for public and national purposes. That the mere business of banking is, in its own nature, a private business, and may be carried on by individuals or companies having no political connection with the government, is admitted, but the bank is not such an individual or company. It was not created for its own sake or for private purposes. It has never been supposed that Congress could create such a corporation.[bold, underline & italics added]

    The court in Easton goes on to say:

    ‘National banks are instrumentalities of the Federal government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States. It follows that an attempt by a state to define their duties or control the conduct of their affairs is absolutely void, wherever such attempted exercise of authority expressly conflicts with the laws of the United States, and either frustrates the purpose of the national legislation or impairs the efficiency of these agencies of the Federal government to discharge the duties for the performance of which they were enacted.
    Our conclusions, upon principle and authority, are that Congress, having power to create a system of national banks, is the judge as to the extent of the powers which should be conferred upon such banks, and has the sole power to regulate and control the exercise of their operations…[bold, underline & italics added]

    National Banks have violated the 5th Amendment Due process clause for decades. Check out this argument now before a colorado court. against Citibank and Citimortgage.

    Can the government divest itself of its identity with a corporation created and participated in for a public purpose sufficiently to allow the corporation to use a procedure that does not allow procedural due process? That question was asked, and answered in Lebron v National Railroad Passenger Corporation. 513 U.S. pgs 374, 375, when the court clarified and expanded the definition of federal actor. The court said:
    c) There is a long history of corporations created and participated in by the United States for the achievement of governmental objectives. Like some other Government corporations, Amtrak’s authorizing statute provides that it “will not be an agency or establishment of the United States Government,” [cite]
    (d) Although § 541 is assuredly dispositive of Amtrak’s governmental status for purposes of matters within Congress’s control–e. g., whether it is subject to statutes like the Administrative Procedure Act-and can even suffice to deprive it of all those inherent governmental powers and immunities that Congress has the power to eliminate-e. g., sovereign immunity from suit-it is not for Congress to make the final determination of Amtrak’s status as a Government entity for purposes of determining the constitutional rights of citizens affected by its actions. The Constitution constrains governmental action by whatever instruments or in whatever modes that action may be taken…
    (e) Amtrak is an agency or instrumentality of the United States for the purpose of individual rights guaranteed against the Government by the Constitution. This conclusion accords with the public, judicial, and congressional understanding over the years that Government-created and -controlled corporations are part of the Government itself.(cites) ; A contrary holding would allow the government to evade its most solemn constitutional obligations by simply resorting to the corporate form, Bank of United States v. Planters’ Bank of Georgia, 9 Wheat. 904, 907, 908 (other cites).[bold, italics & underline added]
    Like Amtrak, national banks including CITIBANK and its operating subsidiary CITIMORTGAGE, as well as federal savings associations are federal instrumentalities. The banks are members in banking systems created to advance the government’s economic public goals, and controlled through the directors of The Comptroller of the Currency and The Office of Thrift Supervision respectively. Like Amtrak it is not for Congress to make the final determination of the status of these corporations as government entities for purposes of determining the constitutional rights of citizens affected by its actions. Consumers are citizens whose constitutional rights are affected when non- judicial foreclosures are exercised by federally chartered corporations like National banks and federal savings associations . To paraphrase an old saying, “that with great power comes great obligations.” This is no less true when Congress confers enumerated and incidental powers on a corporation it creates for an important governmental function. It must follow that with the immunities from taxation and state laws that frustrate the activities of corporations for which acts of Congress were enacted preempting state laws, the constitutional obligations of the government must also attach and must be equally protected against state laws. For as Justice Scalia said in Lebron, at p. 399:
    But it does not contradict those statements to hold that a corporation is an agency of the Government for purposes of the constitutional obligations of Government rather than the “privileges of the government,” when the State has specifically created that corporation for the furtherance of governmental objectives, and not merely holds some shares but controls the operation of the corporation through its appointees.

    In Lebron, respondent also invoked the court’s decision in the Regional Rail Reorganization Act Cases, 419 U. S. 102 (1974), which found the Consolidated Rail Corporation, or Conrail, not to be a federal instrumentality, despite the President’s power to appoint, directly or indirectly, 8 of its 15 directors. See id., at 152, n. 40; Regional Rail Reorganization Act of 1973, § 301, 87 Stat. 1004. But the court specifically observed in that
    case, that the directors were placed on the board to protect the United States’ interest
    “in assuring payment of the obligations guaranteed by the United States,” and that “[f]ull voting control … will shift to the shareholders if federal obligations fall below 50% of Conrail’s indebtedness.” 419 U. S. , at 152. Moreover, we noted, “[t]he responsibilities of the federal directors are not different from those of the other directors to operate Conrail at a profit for the benefit of its shareholders,” ibid.-which contrasts with the public interest “goals” set forth in Amtrak’s charter, see 45 U. S. C. § 501a. Amtrak is worlds apart from Conrail: The Government exerts its control not as a creditor but as a policymaker, and no provision exists that will automatically terminate control upon termination of a temporary financial interest.

    In distinguishing Amtrak from Conrail for the purpose of determining that Amtrak was a federal instrumentality subject to constitutional constraints, the court focused on the control of the corporation by the government, the public interest goals of the corporation, that no provision existed that would automatically terminate the government’s control upon termination of a temporary financial interest, and the fact that in Amtrak the role of the government was as a policymaker and not as a creditor as in Conrail. The elements which led the court in Lebron to attach the constitutional obligations of the 1st amendment to the corporation can also be attributed against CITIBANK and by extension CITIMORTGAGE in attaching its 5th amendment obligation to this case because defendants are federal instrumentalities created for public and national purposes in carrying out the government’s public economic goals as mandated by its authority under the Commerce Clause and implemented through the “Necessary and Proper Clause”. Thus the government’s control through the regulatory agencies is as a “policymaker” where control would never shift to the shareholders. Control of the operations is exercised by the directors of the Office of the Comptroller of Currency and the Office of Thrift Supervision respectively, independent federal regulatory agencies vested with plenary authority to administer the National Bank Act of 1864 (NBA) and the Home Owners’ Loan Act of 1933 (HOLA). The Director of the Comptroller of the Currency is appointed by the President, by and with the advice and consent of the senate.(12 USC § 2) The Director of the OTS is appointed by the President, by and with the advice and consent of the senate. (12 USC §1462c) The issue of the government’s control over the operations of National Banks the governments control was made clear in Easton when the court said:
    Our conclusions, upon principle and authority, are that Congress, having power to create a system of national banks, is the judge as to the extent of the powers which should be conferred upon such banks, and has the sole power to regulate and control the exercise of their operations…[bold, underline and italics added]
    In federal savings associations the government control is clarified in Fidelity Fed. S. & L. v. De la Cuesta, 458 U.S. 141 (1982) at p. 161 when the court said:
    The broad language of § 5(a) expresses no limits on the Board’s authority to regulate the lending practices of federal savings and loans. As one court put it, “[I]t would have been difficult for Congress to give the Bank Board a broader mandate.” [cites] And Congress’ explicit delegation of jurisdiction over the “operation” of these institutions must empower the Board to issue regulations governing mortgage loan instruments.


    • l vent says:

      Let’s cut to the chase. These banks are FOREIGN OWNED AND OPERATED MULTINATIONAL CORPORATIONS. THEY ARE NOT AMERICAN BANKS. Chase, Deutsche, Wells Fargo, BofA, even the ORIGINATORS OF THE ORIGINATION FRAUD, FANNIE AND FREDDIE ARE ALL FOREIGN OWNED AND OPERATED. They wear an American face to hide their true identity.

  3. THE REAL MAGGIE says:

    HAWAII wow!

    • MARIO KENNY says:

      Yeah they are only just beginning to awake to the reality and it may take them years to get out of bed and do something about it, most people are still sleeping, they have not realized what has struck them, yet.

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