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David Dayen

David Dayen is a contributing writer to Salon.com and a weekly columnist for The Fiscal Times. His forthcoming book about foreclosures will be published by the The New Press.

Recent Articles

Homeowners vs. Big Bad Banks

AP Photo/Paul Sakuma, File
AP Photo/Michael Dwyer, File I n June, six former employees of Bank of America's loan-modification department testified in court that since 2009, they had been instructed to lie to struggling homeowners, hide their financial documents, and push them into foreclosure. In the most egregious example, the employees said they were offered Target gift cards as a bonus for more foreclosures, which generated lucrative fees for the bank. The employees, who were in charge of implementing the government’s Home Affordable Modification Program (HAMP) at the bank, described the same deceptive practices across the country. Two weeks ago, U.S. District Court Judge Rya Zobel dismissed the case , denying class-action certification to 43 homeowners in 26 states who suffered because of similar conduct. “Plaintiffs have plausibly alleged that Bank of America utterly failed to administer its HAMP modifications in a timely and efficient way,” Zobel agreed, adding that vulnerable homeowners had to wade...

Foreclosure Fiasco

Flickr/The House of Mouse
“L et’s kill all the lawyers,” Shakespeare demanded over 400 years ago. These days, lawyers have taken a back seat to Wall Street as the main target of public ire. But when a bank sues a homeowner for foreclosure or engages in any other legal action related to delinquent mortgages, they hire a law firm to represent them. Nicknamed “foreclosure mills” because of the relentless churn of cases they take on, these firms are complicit in much of the misconduct we attribute to banks throughout the foreclosure process. There’s a long list of documented abuse by foreclosure mills, which are often specialist law firms built to handle thousands of foreclosures at once. Because of their financial incentives, firms are rewarded for each action they take and frequently cut corners on legally mandated steps of the process. And like everyone else along the foreclosure chain, foreclosure mills have faced virtually no accountability for their misconduct. “It’s the crookedest thing I’ve ever seen in 38...

The Commodities Market: A Big Bank Love Story

The Fed loosened rules to allow banks to buy commodities, driving up everyday prices for consumers. Who the next chair is matters if these kinds of practices are ever to be stopped. 

AP Images/Carolyn Kaster
AP Images/Charles Dharapak W ho becomes the next Federal Reserve chair matters, not only because of the implications for economic and monetary policy, but because the Fed remains one of the nation’s chief financial regulators. There are dozens of policies, some we don’t even know about, over which the Fed wields critical influence. While the past year has seen a small but important shift toward tighter controls, particularly on the largest Wall Street institutions, all of that could change if President Barack Obama selects another deregulator in the Greenspan tradition. A perfect example of the Fed’s centrality to the financial regulatory space came last week, when a Senate hearing focused on an unseemly practice that the Fed perpetuated and has the power to stop. As reported in The New York Times and elsewhere, large investment banks like Goldman Sachs have purchased warehousing facilities for aluminum and shuffled the product from one facility to another. When a purchaser buys the...

Going Abroad With Dodd-Frank

Come Friday, the hope reformers once had that risky trades made overseas by American banks might be regulated is likely to be crushed. Democrats cozy with Wall Street are just fine with that. 

AP Images/Harry Hamburg
AP Images/Harry Hamburg One of the biggest catastrophes of the 2008 financial crisis came out of the AIG Financial Products division, whose disastrous trades eventually led to a $182 billion bailout of the insurance company. One of the largest financial market blowups since the crisis came from the Chief Investment Office of JPMorgan Chase , where similar trades backfired and cost the company at least $6.2 billion. The common thread? Both of these offices, despite being subsidiaries of American corporations, were based in London, and they enjoyed a degree of autonomy, both from their management teams and from federal regulators, who were unable to recognize the outsized risk until it was too late. The Dodd-Frank financial reform law intended to end the practice of financial industry behemoths shifting away their riskiest practices from U.S. regulators’ prying eyes. But a rule that would subject the $630 trillion global derivatives market to the same regulations, no matter the location...

Murky Language Puts Homes Underwater

Banks around the country are exploiting a loophole to foreclose on homes that shouldn't be in the crosshairs. 

AP Images/Don Ryan
AP Images/Don Ryan Revelations from Bank of America whistleblowers show widespread and ongoing abuse of homeowners seeking loan modifications to avoid foreclosure. Customer service representatives were told to lie about pending modifications and were given bonuses for pushing homeowners into default. The allegations mirror continued complaints about “dual tracking,” a practice where mortgage servicers pursue foreclosure while deciding whether or not to grant a loan modification. Servicers at the five biggest banks were required to pay $25 billion in fines and agree to dozens of new guidelines to curb these abuses as part of last year’s National Mortgage Settlement. While the banks argue that they have fixed any outstanding problems, a recent report from the settlement’s oversight monitor, Joseph Smith, showed continuing violations in several key areas, though not to the degree that housing advocates claim . This discrepancy between homeowner complaints and bank pleas of innocence can...

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