Regretfully, I cannot disclose how the following transcript fell into my hands. I have guaranteed the complete anonymity of my source, who participated in the surreptitious recording of a recent face-to-face interview with Kenneth Y. Slick, III, chief lobbyist and head of public relations for Belial Bank. Mr. Slick has been affiliated with Belial Bank ever since it was a small local Midwestern bank with three branches. Today, Belial Bank is the largest and most powerful bank in the country, as measured by hubris. Belial Bank has come to metaphorically represent all Big Banks, due to its aggressive foreclosure tactics – some would say “mean-spirited” – and its apparent inability to avoid controversy and litigation. Humility is not – according to Mr. Slick – a recognized banking term. What follows is a redacted transcript of Mr. Slick’s interview, which, due to the ground rules he demanded, was not to be recorded. You will find it revealing. [BTW, there is no Belial Bank. This post is pure satire…except where it’s true. You decide.]- PCQ
Xxxxxxxxx “Mr. Slick, it’s a real honor to….”
Slick: “Just call me ´KY` – all my friends do. I prefer monikers and first names Xxxxxxxxx.”
Xxxxxxxxx (Resuming) “All right, ´KY`. It’s a real honor to be able to speak with you. Your reputation for secrecy and avoiding the public limelight is renowned. So, I’m very pleased you agreed to take time out of your busy schedule to speak with me. To review the ground rules that you and Belial Bank have set, I understand that I’m entitled to ask any question on any topic, but I’m limited to taking only handwritten notes. I am not to record this conversation. I further understand that you and Belial Bank have absolute and final editing rights before anything goes to print.”
Slick: “That’s right Xxxxxxxxx. No recordings. I’ve put my foot in my mouth too many times years ago when I was less disciplined – sort of like Joe Biden today. I’ve come a long way since then, and if there’s one thing I’ve learned, recorded interviews provide less room for obfuscation and denial. They have a way of coming back to bite you. With that being said, be my guest – ask away.”
Xxxxxxxxx: “Well, in no particular order, let’s start with your boss, B.L. Zebub. How did you two come to meet, and is it true that you’re really very close friends?”
Slick: “It’s true. We’re two peas in a pod. Very close. Have been for years, when we both attended the Rough Justice School of Law. Boy I could tell you some stories back then. How BL and I got caught cheating on the final exam in…. Well, there I go again – insert foot in mouth! Better not get into that! Ha! Let’s just say that we both learned a lot back in those days. And what we didn’t learn, we faked. And when we couldn’t fake it, we cheated. That was when we studied ´The Real Law` – not that claptrap they teach today with ‘legal ethics,’ and being ‘green,’ and doing ‘pro bono’ work. It’s no wonder Belial Bank has such a tough time hiring legal talent these days. These newbie lawyers today get so pumped full of how to practice law and have a conscience, it’s a wonder we can find anyone to work in our legal department.”
Xxxxxxxxx: “Well, KY, I do want to come back to your legal department, since you’ve been instrumental in setting it up. But, first, let’s start with the HAMP loan modifications Belial bank has been doing. Have they been generally successful? And are they well received? I hear so many complaints today.”
Slick: “Well, Xxxxxxxxx, first of all, we don’t do HAMP mods. Never have. Everything we do is our own proprietary modification program. Just like your better restaurants – ´we use our own ingredients` so to speak. We don’t do what everyone else is doing. We march to our own drummer. At Belial Bank, we developed the Lender Initiated Modification Program, or ´LIMP` as we like to call it. It underscores our disdain for having to help at all. We do it simply because it allows us to use platitudes like ´We want to help` on our website. We’ve spent millions creating the illusion that we’re helping homeowners, but actually, the minute we commence a modification, we also file a foreclosure. It’s known in the industry as “dual tracking.” Actually, all we’re really doing is dragging out the default process, so our loan servicing arm can pile up the late charges, and our casualty insurance arm can force-place expensive insurance on the homeowner. By then, there’s no way they’ll ever qualify for a modification program. ‘Course, they don’t know that! Then we sick our affiliated foreclosure company on ‘em. Our entire business model is the quintessential example of vertical marketing – we make money when we lend and we make money when we foreclose. And the greatest irony of all is that the American Taxpayer – ya gotta love ‘em! – bailed us out so we could do this to ’em!”
Xxxxxxxxx: “Seems kinda harsh, KY. How do you sleep nights?”
Slick: “Very well, thank you. Remember, our goal is to make money. Sympathy doesn’t increase share prices, dividends, or market cap. We need to please our shareholders. So we’ve pulled out all the stops. We use every accounting trick in the book to make us appear more profitable than we really are. Thank God, we were able to get the FASB to back down on their silly rules. Now we don’t have to strictly follow mark-to-market accounting, like we did before. The day we were able to avoid that requirement, our stock value shot up 25%! ‘Course people complain that there’s something wrong when we carry our housing inventory at pre-recession values, but that’s too bad. It reduces our capital requirements and helps our stock prices. We don’t need to actually be financially sound, so long as we look financially sound. Simply because the little homeowners have to recognize their net worth based on today’s depresses real estate values, doesn’t mean we should. We’re the ones that are ´too big to fail` – not them!”
Xxxxxxxxx: “Let’s move along, KY. How about the robo-signing scandal? Do you think we’re through that mess yet? And aren’t you afraid there were some state forgery laws violated as a result of what the robo-signers did?”
Slick: “Well, Xxxxxxxxx, first, let’s avoid using the word `robo-signing.´ That term has become a little pejorative today. We like to call them `irregularities´ or `flaws´. And as for your question about violation of state forgery laws, the real question is who you’re referring to? Certainly, nothing will happen to any of Belial’s top executives. We’re all on the safe side of the firewall. We have, in Big Bank parlance, ´plausible deniability`. We’re were never in the same room with the folks who were doing this. Anyway, most of the time it was the big servicers, like LPS who were knee-deep in this. We just looked the other way. The worst that can be said is that we ignored the problem – but that’s not the same as causing it. And even the kids we hired at $10 an hour to do the work didn’t realize they were committing forgery.”
Xxxxxxxxx: “What do you mean ´didn’t realize they were committing forgery?` Most first graders would know it’s not OK to sign someone else’s name to deceive people – and besides, all of you knew, right up to the highest levels at your bank, that these bogus documents were going to be recorded on the public record in county courthouses across the country for the purpose of foreclosing people out of their homes. Even your foreclosure mill attorneys knew these documents were bogus when they filed them in court.”
Slick: “But that’s the beauty of this Xxxxxxxxx! We don’t get our hands dirty. Our attorneys know better than to ask us the difficult questions. They’re well paid to be our shills. And the kids we hire to robo-sign really didn’t know what they were doing was illegal. Obviously, we don’t tell them is ´forgery`. That makes it sound illegal. Instead, we tell them they were ´Surrogate Signers`. They’ve bought it hook, line and sinker! Some of them even later put it on their resume’, thinking it was some kind of executive promotion, because it was a big word. We knew they wouldn’t know what a ´surrogate` was – and we figured they’d be afraid to ask. We were right, of course. You see, Xxxxxxxxx, here at Belial, we subscribe to the ‘Lemming Principle.’ As soon as one goes over the cliff, the rest follow suit. No questions asked. Thank God, Burger King rejects some of its job applicants!”
Xxxxxxxxx: “Well, KY, let’s talk about the Belial Bank Legal Department. What kind of qualifications must they have; and once hired, what training do you give them?”
Slick: “It’s kinda confidential…. Well, hell, why not. I’m enjoying this little tête-à-tête, and anyway, I have final editing rights before this interview ever sees the light of day. So, to answer, we require that they go through extensive personality testing. We give each of them the Minnesota Multiphasic Personality Inventory, also known as the`MMPI´. They’re required to score a perfect `9´. We don’t want any `goody-two-shoes´ in our legal department. Then, once hired, we give them extensive training in our proprietary and confidential company policies. At the end of the training period, we have a 97% washout rate. We only keep 3%. It ultimately gets down to one simple question, which if they answer correctly, they’re IN, and if they answer incorrectly, they’re OUT.”
Xxxxxxxxx: “Wow! So, can you tell me the question? There’s no taping here. You can always deny it later….”
Slick: “I guess that’s fair. Sure I’ll tell you. Our guiding principle is ´It’s not cheating if you don’t get caught`. Any young lawyer who believes that cheating is wrong, even if they don’t get caught, is not anyone we’re interested in. Hell, how do you think we got away with ignoring the Oregon recording law for so long while we foreclosed people out of their homes?! Obviously, we were ´cheating` in a highly technical or moral sense, but we got away with it for years. So it wasn’t cheating. In short, we want lawyers who can ethically detach themselves from these `technicalities´ and just move forward with the foreclosure. We teach our attorneys to develop a `moral relativism´ philosophy – that is, there are no absolutes – no ´right and wrong`. We want our lawyers to argue that people who don’t pay their mortgages deserve to be kicked out of their homes. And the fact that we have to take a shortcut or two in the foreclosure process…. Well, too bad. If they paid their mortgages, they wouldn’t be in this mess. Most of all, we want lawyers who follow orders; who don’t question authority; who will do what we require without looking at the moral side of the issue.”
Xxxxxxxxx: “So what’s a `perfect 9´ on the MMPI, KY?”
Slick: “Well, you can’t always believe what the literature says. But it calls this score indicative of someone who has ‘hypomania´ – whatever that means. It says they have a tendency to have ‘delusions of grandeur’ and supposedly, they tend to have an exaggerated self-worth. But they are outgoing, sociable, and gregarious! They can create good first impressions, but I hear their relationships are likely to be superficial. So what we do here at Belial Bank, is channel all these negative characteristics and impulses into positive attributes. We get ´lemonade from lemons` so to speak! We do need lawyers who have a high sense of self-worth, even if it’s grandiose. That way, they believe they are above the law. We put a premium on arrogance here at Belial. We need more foreclosure lawyers like David J. Stern, for example, who would have scored a ´perfect 9` had he applied here. It’s necessary that our legal recruits not have the slightest twinge of regret, doubt, hesitation or guilt – even if they suspect what they’re doing might be illegal.”
Xxxxxxxxx: “What do you mean `illegal´ KY?”
Slick: “I think the best examples come from our foreclosure department. For example, there are states like Oregon, whose law requires we file all intervening trust deed assignments before we can foreclose a family out of their home. We’ve never recorded our assignments before! Nor could we. Once a loan gets securitized and becomes registered with MERS, instead of the assignments being placed on the public record, we basically lost track of them. What we do, instead, is record a single assignment right before the foreclosure is commenced, then the bank to whom we assigned the trust deed moves forward with the Notice of Default and Notice of Sale. For years, no one was the wiser. We conducted thousands of foreclosures this way. It was `cheating´ in a hyper-technical sense because we never recorded the intervening trust deed assignments, but since we didn’t get caught, it really wasn’t ´cheating`. It was just smart business, and as an added bonus, we avoided millions of dollars in recording fees. And, the fact that Oregon foreclosures are nonjudicial – meaning they are not filed in court – we were able to do it without judges and defense attorneys getting to scrutinize our paperwork in court. So the lawyers we want in our legal department are the ones who believe this is all ´OK`. We don’t want some prissy attorney telling us that we can’t do it because it’s not what the statute says. Hell, we knew what the statute said long before most of these kids were out of high school! If they go along, we’ll get along. Otherwise, they’re out.”
Xxxxxxxxx: “We’ll KY, today it’s kinda hard to say you `got away with it.´ There are cases all over the country, including Oregon’s McCoy case, saying that if the successive recording requirement wasn’t followed, the foreclosure is void. Sounds to me as if cheating doesn’t really pay off in the long run.”
Slick: “Aha! That’s where I work my magic. I’ve been discussing this with our chief legal counsel, Damien Faust, and we’ve figured out a `work-around´. I’ve been warming up to several Oregon politicians, and whispering in their ears. I have made certain promises of campaign contributions, and at the same time, floating Damian’s legal argument to them. Some of these people publicly appear to be our enemies, but we know that `money talks´. Look at Tom Miller, the Iowa Attorney General in charge of the state AGs’ investigation of all the Big Banks. At first he was strutting around saying things like ´people will go to jail´, – referring to us. Well, you’ve seen what’s happened. We made a bunch of campaign contributions, and voila, he changed his tune. So, yeh, we’re pretty confident that we’ll ultimately get our way in Oregon. The only issue is how many pieces of silver will it take. In the meantime, we’ve got our friends in the title insurance industry beating the drum, telling anyone who’ll listen that the public needs a legislative fix permitting MERS to continue ignoring the recording requirements for trust deed assignments. It’s the old fear-mongering argument that `commerce will come to a halt´, if we don’t get our way.”
Xxxxxxxxx: “KY, do you mind sharing your surprise legal argument you think’s gonna carry the day?”
Slick: “Not at all. It goes like this: ORS 86.705(1) says that the “Trust Deed Beneficiary” – that’s us, the Big Banks – means `…the person named or otherwise designated in a trust deed as the person for whose benefit a trust deed is given….´ Damien’s argument – which I think is just brilliant – is that this means ´the Big Banks or MERS`. Thus – so the argument goes- the statute actually permits MERS to be the lawful beneficiary, since they were `designated´ by us when we first registered with MERS. That being the case, once the loan is electronically registered with MERS, then MERS can make a single assignment of that trust deed directly to the foreclosing lender – which is exactly the way we’ve been doing it for years! Pretty slick! If you’ll pardon the pun.”
Xxxxxxxxx: “Hmmmm. Has Mr. Faust actually checked the legislative history on this law? Do you really think that the clause `or otherwise designated´ was intended to permit lenders to avoid the mandatory county recording requirement? Do you think voluntary registration by MERS members is really the same as mandatory recording in the county records? And what about the banks that don’t belong to MERS? I think that’s about 40% of the entire industry. So they don’t register with MERS and they don’t record with the county. How’s that supposed to work? MERS isn’t a publicly accessible facility, like the courthouse, where people can easily check the trust deed records. Most people don’t know how to even access MERS, and even if they did, most don’t know a MIN from a VIN. Moreover, what about the fact that many lenders never bothered to register their assignments with MERS anyway? And what about the fact that MERS didn’t even exist when this statutory language was created? It’s my understanding that several parts of Oregon’s trust deed law were created years ago – long before MERS was even a flashing little synapse in the bankers’ brains. KY, mandatory recording of successive assignments seems to make a lot of sense; that way, the lenders’ right of foreclosure – their ´standing`, if you will – is clearly established. That way you can see on the public record exactly how the bank foreclosing you actually came into possession of the trust deed. In judicial foreclosure states, successive recording isn’t required, since the foreclosing bank has to routinely prove their standing in court, as a part of the legal process. In other words, since the banks were given a right to nonjudicially foreclose in Oregon, the rationale for recording successive assignments under ORS 86.735(1) was so Big Banks would still have to prove their `standing´ just as they do when they are foreclosing in court. Are you sure Mr. Faust has thought this little argument all the way through?”
Slick: (Pause) “That damn Faust! I told him it was too easy. But he said `Nooooo´. He said it was a slam dunk! Those hayseed Oregonians wouldn’t figure this out. I said it was `too cute by half´. But he said `Nooooo.´”
Xxxxxxxxx: “KY, I thought you said a minute ago that Mr. Faust’s argument was ‘just brilliant’. So, which is it, stupid or brilliant?”
Slick: “Xxxxxxxxx, I think this interview is over. I can tell by the tone of your voice, you think this is funny. You’re just trying to provoke me, and confuse me with logic. Remember our deal. No recordings of this interview – I have complete editorial oversight. So I think you should just draft your silly little article, send it to me, and I’ll edit it, where I think it’s appropriate. So Xxxxxxxxx, what’s your `take-away´ from this interview? What did you leave with that you didn’t come in with?”
Xxxxxxxxx: “KY, what I remember most is you telling me that `It’s not cheating if you don’t get caught´. So what I’m leaving with that I didn’t have when I came here was a great recorded interview. Bye, Slick.”
