Minds are changing on Too Big to Fail. A month ago, it was just something in the air. Now, it looks like we're headed for a real legislative confrontation. And man, is the finance sector freaking.
Last week, on April 24th, Democratic Senator Sherrod Brown of Ohio and Louisiana Republican David Vitter introduced legislation called the "Terminating Bailouts for Taxpayer Fairness Act of 2013 Act," or the "Brown-Vitter TBTF Act" for short. The bill is a gun aimed directly at the head of the Too-Big-To-Fail beast.
During the Dodd-Frank negotiations a few years ago, Brown teamed up with Delaware Democrat Ted Kaufman to introduce an amendment that would have physically capped the size of the biggest banks. The amendment was bold and righteous but was slaughtered on the floor by a 61-33 margin, undermined by leaders of both parties – 27 Democrats voted against it.
Brown-Vitter offers a different and, in a way, more elegant solution to the problem than Brown-Kaufman. Rather than impose size limits, it simply insists that banks with over $500 billion in assets maintain higher capital reserves than are currently required. Companies like J.P. Morgan Chase, Wells Fargo, Morgan Stanley, Goldman Sachs, Citigroup and Bank of America will have to keep capital reserves of about 15 percent, about twice the current amount.
The bill only has such tough requirements for just those few megabanks, which sounds unfair, except that the aim of the bill, precisely, is to level the playing field. Right now, the biggest U.S. banks enjoy a massive inherent market advantage in that they're able to borrow money far more cheaply than other banks, because everybody on earth knows the government will never let them fail and will always bail them out in a pinch, making their debt essentially U.S.-government guaranteed. Studies have shown that these banks borrow money at about 0.8 percent more cheaply than other banks, and that this implicit government subsidy is worth about $83 billion a year just to the top 10 banks in America. This bill would essentially wipe out that hidden subsidy and make the banks bailout-proof.
As soon as Brown-Vitter was introduced, a very interesting thing happened. The Independent Community Bankers of America, or ICBA, issued a press release boosting the bill. "ICBA strongly supports this legislation," the release read, "and urges all community banks to join the association in advocating passage of legislation to end too-big-to-fail."
Somebody really needs to let Elizabeth Warren know how Washingon society works. Last week Warren and several other senators rebuked regulators for their refusal to act against felonious banks and bankers when they violate sanctions or criminally assist psychotic drug lords who cut off people's heads.
Their outrage was triggered by the lack of indictments against bankers at HSBC. The bank's executives earned big bonuses after their bank laundered money for Mexican drug cartels and criminally violated sanctions against Iran, Libya, Sudan, Burma and Cuba. As "punishment," the banks' shareholders will pay a $1.9 billion fine. The lawbreakers themselves will not be charged, and will be allowed to keep their own ill-gotten income.
As Sen. Warren noted:
"If you're caught with an ounce of cocaine, the chances are good you're going to jail. Evidently, if you launder nearly $1 billion for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night."
Warren and several of her colleagues continued to lambast these public servants at length for their indifferent attitude toward Wall Street felonies. Apparently nobody told them: In Washington, that sort of thing just isn't done.
After all, the word has come down from Attorney General Eric Holder himself: We don't punish too-big-to-fail banks. "(I)f we do bring a criminal charge," said Holder, "it will have a negative impact on the national economy, perhaps even the world economy."
This is presumably why Wells Fargo, like HSBC, was never indicted for feloniously aiding and abetting Mexican drug lords. That group is made up of people like "El Loco" - "The Madman" - who run gangs like "Los Zetas." They've murdered more than sixty thousand people, often by cutting off their heads and tossing them into nightclubs and town squares. "El Loco" himself was indicted for beheading 49 people and dumping their heads in the town square.
There is finally, finally, finally some momentum starting to build toward accountability for the biggest banks. The results of the election will determine whether it continues to build or completely fades away.
I will be the first to admit that there is a certain irony in that last sentence. Tim Geithner and Eric Holder haven’t exactly been jumping up and down in excitement to prosecute the Too Big To Fail banks for their evident fraud in pumping up the housing bubble and making billions off it. The wheels of justice have turned pathetically slowly. Martin Luther King said that “the arc of the moral universe is long, but it curves toward justice”, but in the case of banks this big and powerful, that arc is even longer. Inch by inch, though, the wheels long stalled have begun to move, and now the pace is beginning to pick up.
In the last several weeks, JP Morgan (twice), Wells Fargo, and now this week Bank of America have all been taken to court by different parts of the government. And while we don’t know how things will turn out, none of these are small potato cases. Together, they represent the broadest cases against the TBTF banks that we have seen since the crisis hit. And the Residential Mortgage Backed Securities task force co-chair says that more are coming.
My colleagues in the Wall Street accountability movement, burned by the lack of action from the DOJ for 4 years, have been understandably skeptical of the RMBS task force, especially when it took what seemed like forever to bring its first case. But without that commission from the President, I don’t think any of these cases would have been brought, because it focused resources (definitely not enough, but some) on investigations, and it raised the political stakes on not doing anything.
Where this heads next will be fascinating. I suspect what Schneiderman and the other more aggressive prosecutors in the task force want to do is to build a web of tough, broad cases against these banks in order to given them maximum leverage. Such a legal strategy could well reap major benefits as investigations proceed.
But imagine a scenario where President Obama loses, and the Democrats lose the majority in the Senate.
Since we're never going to see the criminal indictments these weasels deserve, would it be too much, in light of current developments, that the president and other administration officials stop throwing in little digs at homeowners for their miniscule role in the massive and systemic mortgage fraud that crashed the economy? I can't tell you how that makes my blood boil in light on the ongoing rape and pillaging of those unfortunate enough to be holding mortgages with these bastards:
Oct. 9 (Bloomberg) -- Wells Fargo & Co. was sued by the U.S., which alleged the bank made reckless mortgage loans that defaulted and forced the federal government to pay hundreds of millions of dollars in insurance claims.
The government seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 for alleged misconduct spanning more than a decade related to the bank’s participation in a Federal Housing Administration program, U.S. Attorney Preet Bharara in Manhattan said in a statement. The complaint was filed today in New York federal court.
“As the complaint alleges, yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance,” Bharara said in the statement.
The suit undermines San Francisco-based Wells Fargo’s reputation as a lender that avoided some of the industry’s worst underwriting practices and threatens to compound the bank’s costs as the government completes probes of the housing bubble’s collapse.
Where does the Post get such lousy, lazy reporters? Just a few months ago (see video), Wells was fined $175 million for steering qualified minority buyers to subprime mortgages. And in 2008, a Louisiana bankruptcy court hit Wells with $3.1 million in punitive damages - for one bad loan. As Yves Smith wrote then:
Wells, as we have pointed out repeatedly, has an annoying habit of piously claiming it is better than other servicers when it engages in the same indefensible conduct as its peers. So if you were to take Wells at its word, the conduct of other servicers is at least as bad as what has taken place in this jurisdiction, if not worse. Remember, servicers are highly routinized operations, so if something, it is almost certain to be standard practice. And Wells has admitted that in this case.
[...] The latest example of Wells bad behavior in Magner’s courtroom that has come to a resolution of sorts is another case of Wells overcharging a borrower. In this suit, Jones v. Wells Fargo, filed in 2007, involved a borrower having to sue Wells to recoup overcharges by Wells plus actual damages, plus a request for punitive damages. The ruling sets forth the sorry history in some detail and I strongly suggest you read it in full.
[...] The word “predatory” is not adequate to describe Wells’ conduct. The bank is not simply willing to steal from consumers, via blatant, institutionalized violations of its own agreements on mortgages and later on bankruptcy plans. It has absolutely no respect for the law, whether it be contracts or court procedures. It’s a band of marauders that our society treats as legitimate because the perpetrators wear suits and can afford to hire lobbyists. And the Federal government and state attorneys general are certain to have emboldened Wells and its brethren by rewarding them rather than treating them like the criminals they are.
Even though crime rates in American have either stabilized or gone down, the incarceration rate (especially for people who are in this country illegally) has gone up - way up. (As this video points out, more people are being incarcerated on civil charges, not criminal.)
Naturally, as with most changes in this country, this has more to do with profit than anything else - and now we find that Wells Fargo is a major shareholder in for-profit prisons. Hmm. So this is what's taken the place of mortgages as the banking cash cow? From Salon:
As Wells Fargo has grown over the years, using its bailout funds to gobble up rival Wachovia and expand to the East Coast, so has the U.S. prison population. By 2008, one in 100 American adults were either in jail or in prison – and one in nine black men between the ages of 20 and 34, many simply for non-violent offenses, justice not so much blind as bigoted. Overall, more than 2.3 million people are currently behind bars, up 50 percent in the last 15 years, the land of the free now accounting for a full quarter of the world’s prisoners.
These developments are not unrelated.
A driving force behind the push for ever-tougher sentences is the for-profit prison industry, in which Wells Fargo is a major investor. Flush with billions in bailout money and an economic system designed to siphon wealth from the working class to the idle rich, Wells Fargo has been busy expanding its stake in the GEO Group, the second largest private jailer in America.
At the end of 2011, Wells Fargo was the company’s second-largest investor, holding 4.3 million shares valued at more than $72 million. By March 2012, its stake had grown to more than4.4 million shares worth $86.7 million.
Unfortunately, it’s a safe investment. While a 50 percent growth in the number of human beings our society cages in rape factories may sound impressive – or perhaps the word is “revolting” – a study released last year by the Justice Policy Institute found that the private prison industry grew by more than 350 percent over the last decade and a half. While other industries of course benefit from state-granted privileges, companies like GEO profit by the state literally kidnapping and handing them clientèle, particularly as of late about-to-be-deported immigrants, of which President Barack Obama has ensured there is a steady, record-breaking supply.
“All prisons are awful,” says Melanie Pinkert, an activist based in Washington, DC, who along with other members of Occupy DC’s “Criminal Injustice Committee” is helping lead a boycott of Wells Fargo, which just expanded to the nation’s capital. “But private prisons take it to the next level.” Indeed, a recent report from the U.S. Justice Department found that at one GEO-run juvenile facility in Mississippi, sexual abuse was endemic, “among the worst that we have seen in any facility anywhere in the nation.” According to the report, GEO staff demonstrated:
Deliberate indifference to staff sexual misconduct and inappropriate behavior with youth;
Use of excessive use of force by [prison] staff on youth;
Inadequate protection of youth from youth-on-youth violence;
Deliberate indifference to youth at risk of self-injurious and suicidal behaviors; and
Deliberate indifference to the medical needs of youth.
These findings, shocking though they may seem, are not surprising. With an eye on maximizing quarterly profits, privately run facilities are even less inclined than state-run prisons to treat their involuntary customers humanely, skimping on health care and anything else that could hurt their bottom line, particularly programs aimed at reducing recidivism. As the ACLU noted in a report released late last year, “Not only is there little incentive to spend money on rehabilitation, but crime, at least in one sense, is good for private prisons: the more crimes that are committed, and the more individuals who are sent to prison, the more money private prisons stand to make.”
If you haven't closed your Wells Fargo account yet, this would be a good time to do so. But let's not pretend that closing our bank accounts is going to hold back the tide. There's very, very big money involved in sending people to jail for minor infractions (so much so that our political "leaders" won't even entertain the notion of legalizing marijuana) and it's only getting worse. Why, now we even lock up the mentally ill instead of treating them!
Through involvement in the leadership of ALEC (American Legislative Exchange Council), private prison companies have played a key role in lobbying for and passing harsher sentencing for non-violent offenses including three-strike laws, mandatory sentencing, and truth-in-sentencing. They are also behind the recent spate of anti-immigrant state laws that are putting more and more immigrants behind bars -- the new profit center for the prison industrial complex.
Private prison companies employ legions of lobbyists to push for policies that support their bottom line. Since 2001, three major prison companies, CCA, GEO Group and Cornell, have spent over $22 million lobbying Congress. Recent lobbying by CCA and GEO Group includes efforts to increase funding to Immigration Customs and Enforcement (ICE). Since 2003, CCA has employed 204 of lobbyists in 32 states, and GEO Group has employed by 79 lobbyists in 17 states.
Private prison companies also influence policymaking by strategically supporting political campaigns. At the federal level, the political action committees and executives of private prison companies have given at least $3.3 million to political parties, candidates, and their political action committees since 2001. The private prison industry has given more than $7.3 million to state candidates and political parties since 2001, including $1.9 million in 2010, the highest amount in the past decade.
A Wells Fargo executive explains to the SEC that his company didn't do anything wrong!
I had to laugh when I read this, because bill collectors from Wells Fargo keep hounding me over a few bucks I owe from when I closed my account and moved it to a credit union. (I plan to give them the money, I just haven't gotten around to it yet.)
"Don't you have any sense of honor about your just debts?" the last bill collector said.
"Are you serious?" I said after I stopped laughing. "Do you know who you're working for?"
The next time he calls, I'm going to tell him I'll write him a check just as soon as Wells Fargo complies with their SEC subpoenas!
(Reuters) - U.S. securities regulators accused Wells Fargo & Co on Friday of repeatedly ignoring its subpoenas for documents in connection with a probe into the bank's $60 billion sale of mortgage-backed securities.
The Securities and Exchange Commission's filing in a San Francisco federal court seeks to compel the fourth largest U.S. bank to hand over documents. The SEC said it has issued several subpoenas since September.
A Wells Fargo spokeswoman called the SEC's action "inappropriate" and pledged the bank would "vigorously defend itself in court" against the SEC action.
"Wells Fargo has extensively cooperated in the commission's investigation and believed it had an understanding with the SEC staff with regard to the outstanding document requests; the filing of this action violates that understanding," said Wells Fargo spokeswoman Mary Eshet.
The SEC said on Friday it is looking into whether Wells Fargo made "material misrepresentations or omitted material facts" in offerings it made to investors from September 2006 through early 2008, a period that included the beginnings of the financial crisis.
The SEC charges that a due diligence review of a sampling of the securitized loans was done, and some of those loans would be dropped because they failed to meet the bank's underwriting standards.
But the regulator said it "does not appear that Wells Fargo took any steps to address similar deficiencies in the remainder of the loans in the pool, which were securitized and sold to investors."
Eshet said that the SEC had inaccurately described its conduct with regard to residential mortgage backed securities and that no enforcement action was warranted.
Payday lending is just a gentle term for loan sharking. Payday lenders give signature loans to people against future paychecks, locking them in with incredibly high interest rates. Missouri's laws are some of the most lax on the books.
According to a Missouri Better Business Bureau study (PDF) published in 2009, Missouri's state laws allow interest rates of 1950 percent to be charged on a two-week loan of $100.00, while most neighboring states' laws limit those rates to around 400 percent, which is not wonderful, but not as obviously impossible as Missouri's.
Payday lenders take at the very least $3.4 billion from our communities every year in fees alone. This figure represents some $3.1 billion in wealth stripped from desperate borrowers -money that could have gone to buy needed groceries or school supplies- to pump up the payday lenders' fat bottom lines.
Nationwide, revenues for the major payday loan companies (Advance America, EZ Corp, First Cash Financial, Dollar Financial, Cash America, QC Holdings) have risen to their highest level - $1.48 Billion per year- more than before the financial crisis.
Big banks like Bank of America, Wells Fargo, JPMorgan Chase, and US Bank finance approximately 42% of the entire payday loan industry, providing the industry the capital for usurious and predatory loans.
Needless to say, the CFPB could not be investigating these loan sharks any sooner, particularly when they prey upon the working poor who are already struggling. These types of loans are typically targeted at minority communities, but also military families and other struggling groups. But while the CFPB investigation continues, a coalition of churches, bankers and nonprofits are working to create an alternative around a microlending model. In addition, petitions are being circulated for voter initiatives to limit interest rates on payday loans to more - ahem - reasonable rates.
The buzz is that President Barack Obama is pushing hard for a deal with the big banks over the foreclosure crisis in advance of the State of the Union address on Tuesday. Most observers are afraid that the deal will be too small and that the banks will get a slap on the wrist despite playing a major role in creating the financial crisis that led to a recession.
AFL-CIO President Richard Trumka joined a growing chorus calling for a rejection of such a small deal and calling for an investigation of the banks over potential fraud and illegal activity:
We need to hold banks accountable for the fraudulent practices that brought about the worst economic crisis since the Depression. State Attorneys General have been investigating bank fraud, and these critical investigations must not be undermined by a premature and inadequate settlement. We call on the administration to reject any deal that insulates banks from full responsibility.
We commend state Attorneys Generals like New York’s Eric Schneiderman and Delaware’s Beau Biden for their leadership and courage in calling for a real investigation and relief on a scale that helps the millions of homeowners who face a new wave of foreclosures.
The economy is currently weighed down by $750 billion in negative home equity, so relief on a massive scale is needed to lift home values and stimulate the economy by increasing consumer demand. A comprehensive settlement must force banks to write down underwater mortgages. A sum significantly larger than the rumored $25 billion is needed for the economy to grow and create jobs.
Specifically, the administration must stand strong against the Big Banks and insist on:
1. A full and thorough investigation into problems tied to the residential mortgage-backed securities (RMBS) market, and
2. A guaranteed minimum amount of money set aside for reducing the mortgage principal of “underwater” homeowners in key states impacted by the foreclosure crisis.
This is an opportunity for the administration to demonstrate leadership and show that it has the political will to do what’s right for homeowners and right for our economy.
This week 60 Minutes gave viewers a good look at some of the widespread criminality that created the Wall Street mortgage boom and led to our ongoing financial crisis. They also saw some of the overwhelming evidence of illegal activity on the part of big banks, and were reminded that none of those banks' executives have been prosecuted.
As ugly as the situation is, there is some logic behind the government's actions - and its inactions. They're acting on a tragically incorrect (but internally coherent) set of assumptions that can be summed up in one sentence. It goes something like this:
"To preserve the health of the American economy, banks must be allowed to keep preying on their consumers."
That's it. That's the logic.
But there are two exciting "Occupy" developments this week that could change the equation - "Take Back the Capitol" in the District of Columbia, and Tuesday's "Occupy Our Homes" events around the country. Think of them as complementary actions: One is taking place at the site of our greatest government power. The other is bringing the action to homes where people have been victimized by bankers.
People may not realize it, but there's power in those homes, too.
The Logic of Injustice
Despite their destructive behavior, the people who bailed bankers out and are giving them a free pass for their crimes aren't necessarily evil or corrupt. Well, okay, people like this guy are. But others have merely been so infected by misguided economic thinking that they really believe that the only way to save the economy is to keep shafting consumers and pampering mega-bankers.
The thinking goes something like this: Our largest banks are too big to fail, and since we lack the will or the motivation to break them up or regulate them we must protect them at all costs. We've propped them up with TARP, quantitative easing, and $7.7 trillion in secret Federal Reserve loans, but they're still shaky as hell. If we prosecute any of their executives, their stock prices will fall and they'll collapse again. And they'll take the entire economic system with them.
That leads to some grotesque miscarriages of justice. Nobody at Wells Fargo has been indicted for money laundering, for example, despite the fact that the bank has paid millions to settle charges of laundering cash for the Mexican drug cartels that have murdered more than 35,000 people. As an experienced bank investigator working for the Senate observed, "There’s no capacity to regulate or punish them because they’re too big to be threatened with failure."
The Bailout Nobody Knows
And banks don't just need protection from their own criminality. They also need protection from their own lousy management. Their balance sheets are filled with toxic risks from their long run of incompetence, negligence, and greed. That's where you and I come in. Some powerful folks are afraid the banks will fail if they're forced to write off the bad loans on their books, or to stop profiting from loans sold deceptively or irresponsibly.
TARP may be over, but there's another massive bank rescue going on. Who's funding it? We are. Every time we pay a usurious interest fee on a credit card, we're propping up the banks. Every time we make another month's payment on an underwater mortgage, we're propping them up too. Every time we pay an overpriced consumer loan of any kind, we're making another payment into the consumer-funded bailout that's keeping the big banks afloat.
It would be great if politicians in Washington stopped using American consumers to subsidize banks that shouldn't even exist. But they haven't. That's where "Occupy Our Homes" comes in.
Occupy Our Homes
Tuesday, December 6, has been declared a National Day of Action to Occupy Our Homes. Its goal is to focus attention on the corrupt banking practices that led to the mortgage boom and today's ongoing economic misery for most of the 99 percent.
It's also a day for helping people in our communities who have been victimized by predatory lending, criminal bank forgery, unfair or illegal foreclosure practices, and other bank abuses that victimize the public. Occupy Minnesota has already occupied an illegally-foreclosed home, and plans to do the same thing with another home tomorrow. Here in Los Angeles, where an inspiring victory has already taken place, OccupyLA will help two brave families re-occupy their illegally foreclosed homes.
One of those homes belongs to a three-earner family that includes a gainfully employed woman with cerebral palsy named Ana Wison. Ana's household clearly seems capable of making its mortgage payments, but her bank's foreclosing anyway. And in one of ironies that have become all too common, the bank in quesion is none other than that Mexican drug cartel money-laundering outfit, Wells Fargo.
The Occupy movement hopes to focus the public's attention on people like Ana Wison. In the words of the Dylan song: "Things should start to get interesting right around now."
Demonizing the Victim
Resisting illegal foreclosures is a good first step. It brings attention to Wall Street's criminality, venality, and plain old inhumanity toward the people they call their"customers" - but treat like serfs.
It does something else important: It counteracts the brainwashing, driven by Wall Street and dutifully echoed by the media, which has demonized the victims of bank misbehavior. (We were trying to fight that brainwashing back in 2008, without much luck.) The Occupy movement has already won several battles in that war. If the public's attention can now be focused on people like Ana Wison, that can be a powerful blow against the Wall Street/corporate media "they deserve it" hype.
What about the millions of people who have suffered because of the banks' predatory mortgage lending but aren't behind in payments or in the foreclosure process? We need to re-open the debate about the fairness of forcing any underwater homeowners to pay underwater principal on homes that their banks knew, or should have known, were going to decrease in value. After all, the same conglomeration of banks and corporate media that demonize homeowners as "greedy" and "irresponsible" spent most of the last twenty years convincing people that real estate was a sure-fire investment.
Banks made an extraordinary amount of money off the bubble they created. The total mortgage amount outstanding in this country went from $6.2 trillion in 2002 to $11.9 trillion in 2009, a meteoric rise. And while banks feed off the Federal Reserve's unusually low rates, they've renegotiating very few home loans.
Consumers also owe nearly three quarter of a trillion dollars in credit card debt, much of it being paid at unconscionable rates of 12 percent to 29 percent - while their banks enjoy rates from 0 percent to 3 percent, thanks to the government institutions created by those same consumers.
What will happen if consumers stopped blaming themselves? What if they demanded that the banks take responsibility for their irresponsible and/or predatory lending? What if they refused to stop this country's perverse economic role reversal, where customers have become the ATMs while banks keep making the withdrawals?
If 10% of America's homeowners declared a mortgage strike it would rock the banking world. If everybody paying exorbitant credit card interest declared a moratorium on payments all at once, Wall Street would change forever.
Think about it: "Occupy ALL Our Homes." "Occupy Our Credit Cards ... Our Payday Loans ... Our Buy-and-Drive Loans ..." I'm not saying these are necessarily the right tactics, although they very well may be. But what's most important is that we understand that consumers have far more power than we usually realize - provided we act together.
Many of Washington's leaders will cringe at the thought, of course. "That could hurt our biggest banks," they say. It would be tempting to reply, You say that like it's a bad thing. Here's a better response: Then start planning to break them up in an orderly fashion. We're done living a life of indentured servitude just so we can subsidize their greed.
Those are the discussions that we should be having. If powerful people on Wall Street and in Washington aren't worried about Occupy Our Homes , they're not paying attention. But with any luck, they soon will.
(If you've been a victim of mortgage abuse you can tell your story here. If you want to find an Occupy Our Homes event near you, you can look for one here.)
Doesn't this story warm your heart? I know it does mine. (BTW, the attorney quoted on this case is my friend Alex's father, a lifelong public interest lawyer who's really, really good.) Philly represent!
Patrick Rodgers, an independent music promoter in Philadelphia, has won a judgment against his mortgage lender, Wells Fargo, which Wells hasn't paid, and so he's foreclosed on them and arranged for a sheriff's sale of the contents of Wells Fargo Home Mortgage, 1341 N. Delaware Ave to pay the legal bill.
Rodgers made all his mortgage payments on time, but Wells decided out of the blue that he had to carry insurance for the full replacement value of his home -- $1 million -- and started to charge him an extra $500 a month in premiums. When Rodgers sent a formal letter to the lender questioning this, they did not answer in good time, so a court awarded him $1,000 in damages, which Wells wouldn't pay. So the court is allowing him to sell the contents of the lender's office to make good on the bill.
"It's a completely unreasonable demand," says Irv Ackelsberg, a mortgage expert at the Philadelphia law firm Langer, Grogan & Diver. "Their interest is in protecting their mortgage, not ensuring that the house is rebuilt."
Rodgers' next step put him at some risk, he concedes now. He refused to renew the higher-cost policy. Instead, Wells Fargo bought him so-called forced-placement insurance - a policy that typically costs much more than ordinary coverage and only protects the mortgage-holder's interests.
But he fought back with his suit under the Real Estate Settlement Procedures Act (RESPA). Last month, Wells Fargo sent him more than $1,000, and Menke says it intended to fully satisfy the judgment. "We had considered this matter closed," he says.
What about Rodgers' four-page letter demanding answers about how much Wells is trying to charge him - charges that have added $500 a month to his statement?
Menke says Wells Fargo sent a written response "within the last month." As of Monday, Rodgers hadn't seen it.