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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

I Ruined the Economy and All I Got Were These Lousy Tax Cuts

Will the GOP's budget plan spark a double-dip recession?

(Flickr/Medill DC)
Last week, Ben Bernanke delivered a speech in which he agreed that the government should reduce the deficit. However, he cautioned, "a sharp fiscal consolidation focused on the very near term could be self-defeating if it were to undercut the still-fragile recovery." In economist speak, that's a warning to Vice President Joe Biden and the handful of congressional leaders he has assembled to tackle the deficit: Don't cut spending too fast or you'll kill the economy. Already, the federal government's limit on the amount it can borrow has been reached, and Treasury Secretary Tim Geithner has warned that the government is now taking "extraordinary measures" to meet its obligations. Yet Republicans refuse to raise the limit without big cuts to government spending. Also last week, Sen. Jon Kyl, a Republican from Arizona and a member of the Biden negotiating team, reiterated his party's demand : Every dollar the debt ceiling is increased must be accompanied by at least a dollar in spending...

The Democrats' Trump Card

Democrats threaten reconciliation in the fight over federal spending.

House Majority Leader Eric Cantor and Vice President Joe Biden at talks on a budget deal on Thursday, May 5, 2011, at Blair House in Washington. (AP Photo/J. Scott Applewhite)
The Democrat-controlled Senate has yet to vote on a 2012 budget that would serve as a counterpoint to the Medicare-slashing Paul Ryan plan that passed the House. When Senate Budget Committee Chair Kent Conrad explained on May 19 why he wasn't taking a budget proposal to the Senate floor, he may have said too much. Conrad, a member of both the Bowles-Simpson deficit commission, which failed to get the required votes for its deficit plan to trigger congressional action, and the now dismantled Gang of Six, which tried to hash out a deal on reducing the deficit, said in a press conference last week that voting on a budget bill in the Senate along party lines now would make it more difficult to use reconciliation to get a budget passed. Remember "reconciliation"? Thanks to the crash civics lesson we all received during the battle over the Affordable Care Act, the public may recall that Democrats used this legislative trick to circumvent a Senate filibuster by Republicans and get health-...

Off Register

County-level officials take on big banks over irregularities in records that cost localities millions.

State and federal regulators have yet to stop mortgage-foreclosure abuses and exact punishment on the banks responsible for them. A slap on the wrist for 14 of the largest mortgage firms, a still fruitless effort by state attorneys general to reach a settlement with banks, and superficial investigations into the extent of the abuses have done little to answer questions about the proliferation of mortgage fraud. Without that knowledge, regulators are at a disadvantage in arriving at an equitable solution. Enter the most unlikely players in this whole mess: unassuming elected county officials known as registers of deeds. Whenever a mortgage gets transferred from one owner to another or a home falls into foreclosure, documents of the transaction get filed at the county register's office. Much of the truth about systemic document fraud is sitting in these local offices. Until now, virtually no register of deeds had bothered to take a look. But Jeff Thigpen, the register of deeds in...

A Foreclosure Problem Congress Couldn't Ignore

After a new report showed banks were improperly foreclosing on members of the military, the companies are scrambling to fix the problems and camo-wash their images.

Iraq veteran and U.S. Paralympic alpine skier Heath Calhoun, 30, walks past the new home that is being built for his family by the veterans group, Homes For Our Troops, and members of his community. (AP Photo/Kristin M. Hall)
Last week, the mortgage servicing arm of JPMorgan Chase reached an unusual settlement in a class action lawsuit, acknowledging it had charged illegally high interest rates and wrongfully foreclosed on 6,000 homeowners across the country. JPMorgan agreed to give $12 million to the individuals and $15 million to a fund for additional damages, on top of $6 million already promised for these particular violations. So had one of the major corporate forces behind the foreclosure crisis finally come to terms with its criminal activities and done right by the customers it defrauded? Hardly. Last week's settlement, and similar ones by other banks, relate only to a very specific type of foreclosure fraud: violations of the Servicemembers Civil Relief Act. Banks are hoping that by compensating members of the military for improper foreclosures, they can boost their public image and avoid responsibility for the broader foreclosure crisis and the truckload of violations committed against civilian...

A Slap on the Wrist for Mortgage Fraud

A new enforcement order from federal regulators basically leaves it up to banks to monitor for themselves how they process mortgages.

(Flickr/lewisha1990)
On Wednesday, three federal regulators -- the Federal Reserve, the Office of Thrift Supervision, and the Office of the Comptroller of the Currency -- released an enforcement order against 14 of the nation's largest banks and two third-party service providers for persistent irregularities and outright fraud in the way they process mortgages. These regulators are, respectively, the gang that missed the housing bubble, American International Group's overseer (whose colossal lapses caused it to be disbanded in last year's financial-regulatory law), and an entity most recently headed by a former bank lobbyist. The product of their deliberations, then, is no surprise: a toothless federal consent decree that essentially lets the offending banks off the hook and puts them in charge of their own prosecution. And yet, paradoxically, this weak consent decree could be the best chance for accountability in the mess that banks have made of the housing market. It certainly wouldn't appear that way...

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