The Corruption of the Financial Press: A Look at Housing Wire
Yesterday, I took John Carney of CNBC to task for his headline “Have Consumers Gone on Strike?” That represented a particularly myopic worldview in the financial press which is all too common. CNBC has long been criticized for such a perspective. But you also see in other parts of the financial press what amounts to basic corruption.
One such example is Housing Wire. This magazine and website bills itself as “financial news for the mortgage market,” and for the most part reports on related events. But Paul Jackson, the founder and publisher of Housing Wire, writes editorials, and of late he has been particularly concerned with telling his readers that there’s nothing of consequence in the foreclosure fraud issue, in particular the possibility that banks messed up their securitization processes and created clouded title issues on millions of properties.
That’s his opinion and his right to print. But Jackson took this a step too far. He’s had a long-running feud with Naked Capitalism’s Yves Smith on the subject, culminating in a post where he intimated that a case in Alabama, ultimately unsuccessful, where the plaintiff asserted that a faulty securitization meant that her servicer could not prove they owned the note on the home, had to have been bankrolled by some higher-up looking to hurt the banking industry. “If I’ve learned anything over the years, it’s this: always follow the money,” he writes.
Morality and the accompanying emotions to that noble love of justice are simply a varnish for the fires of greed. In other words, everything is about the money, and if you can find a viable angle to make more of it than someone else. And I mean everything.
OK then, let’s follow the money. What is Housing Wire, anyway? The principals of it and its parent company, the LTV Group, are Paul Jackson, and Richard Bitner. He used to be a subprime mortgage broker, and he wrote a book about it called Confessions of a Subprime Lender. Bitner has compared himself in interviews to a drug dealer for his career in the subprime industry.
The main shareholders in Housing Wire, and its publisher LTV Publishing, which is also an advertising/PR/marketing company, are:
Robert Jackson, Paul’s father and a CEO at Jackson and Associates, an REO (real estate owned; it means a property owned by a bank or government entity after an unsuccessful foreclosure auction) lawyer; Berry Laws, a partner at Martin, Leigh, Laws & Fritzlen, a foreclosure mill law firm out of Kansas, linked to robo-signing, which also owns a title company; and Benny Nassiri, the owner of Asset Financial Network, which specializes in foreclosure properties. Basically, someone cashing in on the misery of others. She has also worked with IndyMac, the collapsed subprime lender.
So this is the group around Housing Wire: foreclosure firms, an REO broker and an ex-subprime lender. If it is indeed “all about the money,” there’s a lot of guilt by association here. All of these people make money off the broken housing market and its constant stream of foreclosures.
But there’s more. The leading advertiser for Housing Wire is, in fact, LPS (Lender Processing Services). You may have heard of them because they have been implicated in multiple criminal investigations for producing fake documents for foreclosure cases. LPS ran DocX, the company that sold “authentic” documents to foreclosure mill law firms at cut rates. And they continued this profit center even outside of DocX:
Questionable signing and notarization practices weren’t limited to its subsidiary, called DocX, but occurred in at least one of LPS’s own offices, mortgage assignments filed in county recorders’ offices show. And rather than halt such practices after the federal investigation got underway, the company shifted the signing to firms with which it has close business ties. LPS provided personnel to work in the new signing operations, according to information from an LPS spokeswoman and court records including an October 21 ruling by a judge in Brooklyn, New York. Records in county recorders’ offices, and in the judge’s opinion, show that “robosigning” and preparation of apparently false documents went on at these sites on a large scale.
In one instance, it helped set up a massive signing operation at the nearby office of a major client, a spokeswoman for the client, American Home Mortgage Servicing, confirmed. LPS-hired notaries who worked there said in interviews that troves of documents were improperly handled. They said that about 200 affidavits per day were robosigned during the two months the two notaries remained there.
See also here and here. Yet Jackson has repeatedly defended LPS, its leading advertiser, from these charges, minimizing their legal exposure. One of the principals of the company, Benny Nassiri, also lists herself as affiliated with LPS.
Here’s the point. Jackson has a habit of throwing around statements like “it’s all about the money,” but his organization really fails under that standard. It’s filled with people from the mortgage industry who obviously have an incentive to minimize the conduct of the mortgage industry. It also makes its money from the mortgage industry. This is part and parcel of the financial press in all its sleaze.