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It is quite possible and even probable that someone with enough financial resources and the will to do it could turn our financial system upside down and make an enormous profit from it. This person would have to have no loyalty to western currency and the financial well being of western countries. So let’s assume a very wealthy Asian wants to take a shot at getting into Bill Gates’s wealth status. From what I gather the game plan would be a simple one. That is buy enormous amounts of what I like to call the paper version of silver and gold and buy even more actual silver and gold. Then start a run on Comex by demanding to replace your paper with actual gold and silver. The next part is for me admittedly a bit fuzzy so my play by play of this could be off a bit but I believe the general idea fits the situation. Given that commodities’ trading is a relatively small community, if the player of this scenario has purchased enough of these metals and starts demanding their paper be replaced with the real thing, their demands should cut fairly deep into Comex reserves and then the rumor mill will kick in big time. It shouldn’t take long for the word to get out that there is more paper of gold and silver out than actual gold and silver exists to back it up. Once this gets on the street it should not take long for the Comex reserves to get wiped out. Then financial chaos is right around the corner. However as chaos swirls around them those that possess actual silver and gold will see their investment shoot up perhaps skyrocket in value. I believe a conservative estimate would be to rise anywhere from 2 to 4 times in value. However given the volatility of anything financial these days I fully expect it to zoom to 5 to 10 times in value.

That’s the good news if you are sitting on actual gold and silver but the bad news is really really really bad because the basis for all valuation including the stock market, the dollar the euro etc. etc. is gold and silver. Remove silver and gold from the valuation process and as one financial analyst recently told me the stock market probably drops to 25 percent of its value the dollar probably loses 30 percent of its value and so on. These figures are guesswork and possibly conservative but what is not a guess is that the value of stocks, the dollar, the euro and more will lose big chunks of their value enough to throw our fragile financial system into chaos. The value of silver and gold are bedrocks for building the valuation of currencies the stock market and other financial entities. Remove a bedrock and the house comes tumbling down or at least a good part of it probably most of it.

Financial Armageddon anyone, sure we have already looked that bullet in the eye and dodged it. However, many financial wizards have predicted it could still occur and none as far as I know took into account the wipeout of the silver and gold reserves. However back to the gutsy whistleblower Maguire, he was scheduled to be interviewed back when all this broke out by all the big news outlets. However, quite suddenly all of these major media sources cancelled these interviews. So unless someone you know who is into the silver market brought this to your attention, it likely went completely under your radar. Presumably, the government the wolves of Wall Street and every other financial player who has a lot to lose are working hard to keep this on the way down low for as long as possible. I can’t really blame them for this given the impending catastrophe revealing this secret will release. However the trigger for all this going public is likely the DOJ and SEC’s investigation of JP Morgan Chase’s manipulation of the silver market. Once this investigation comes to a close there has to be some consequences which the media can’t completely ignore and then the stink storm hits the fan for most of us and for those that own silver or gold their personal value jumps up quite a bit.

Between silver and gold, silver gives the much stronger appearance of giving an investor a more viable short term reward. Since the DOJ and SEC started investigating JP Morgan Chase’s very likely manipulation of silver, you no longer see silver pushed down hard after it has rallied up. In fact an interesting phenomenon has taken place recently regarding silver. Silver and gold used to be joined at the hip in that both would go up and down together as a matter of course. However, silver has continued to go up regardless of when gold goes down. Even more remarkably, silver has recently continued to go up even if the stock market goes down. This shocking behavior of silver only strengthens the case that JP Morgan was manipulating the silver market. That the silver market has such staying power is not really surprising given the big picture of high deficits, a weak dollar, a weak euro. Silver stands out as a relatively safe investment perhaps the safest investment anyone with a some extra money can make. Right now its just under $20 an ounce which is a whole lot more affordable for the average person than gold at around $1250 per ounce.

Obviously, if any of you readers have some money and you can afford to sit on for 6 to 18 maybe 24 months, it is my opinion that buying actual silver or gold especially silver is one hot investment. I suggest this time frame because I suspect within ½ to 2 years the investigation of JP Morgan Chase’s obvious manipulation of the silver market will be concluded and made public. The government will no doubt drag this out as long as they can which is why I foresee this possibly lasting a good 2 years. It’s also possible that within that time frame, some enterprising filthy rich person is willing to blow up the silver and gold market to make to make themselves super rich.

I wouldn’t just take my word on any of this. If this subject grabs your interest I strongly recommend you listen to an interview between Andrew Maguire and Adrian Douglass of GATA. GATA is the Gold Anti-Trust Action Committee and was organized in January 1999 to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities. When you hear these two speak about the inevitability of the biggest fraud in the history of man being exposed you cant help but feel that its just a matter of time before what I like to call the big bang hits our financial system. One of the questions Douglass asks Maguire is why it was allowed to happen that we now only have 1 ounce of gold and 1 ounce of silver to back a 100 ounces of each that is being sold on paper. As I recall Maguire thinks it happened because at a low point it was a quicker way to juice the financial markets and eventually it all just got way out of control. I see a parallel in the steroids era of baseball and sports in general. After the baseball strike put the sport in a dark period, the lords of baseball looked the other way while some players juiced themselves up so they could hit more home runs in one season than had ever been hit before. This created a major buzz for baseball and quickly took them out of this dark period. However when the stink hit the fan baseball would be forever tarnished and would never be the same.

Apparently the fools that run our government and our financial world also looked the other way and took the short term upside gambling against the long term loss. The question begs to be asked if and when this big bang hits given all the other bullshit that the protectors of all financial have allowed to be fostered upon the general populace, will said general populace ever again trust the members of the Fed Reserve, big banks the Secretary of Treasury etc etc ad nauseam ever again. There sure isn’t much left to trust so this new catastrophe ought to really wipe out any vestige of trust the peons of Main street still have for any and all of the big financial players. I doubt if this will lead to people stuffing cash into their mattresses but it will probably lead to the creation of more state run banks like the one that now exists in Montana.

To any of you who read my first piece on the silver market please accept my apology for not keeping my promise of following up right away with a second piece. If you care for an explanation, at first I delayed because the BP oil spill seemed like more than enough of a major downer for everyone to handle and I didn’t want to pile on. Then I got distracted and lazy. Now after a two week vacation I feel renewed enough to finally keep my promise. Hope it was worth the wait.

Lastly a note of caution given that I am recommending you readers to spend your hard earned cash on an investment, for those thinking of jumping into buying silver or gold or any investment, when contemplating making any purchase especially big ones, there are two lines not to cross. Crossing these lines is a leap from risk taking to gambling and I strongly recommend you don’t gamble with your money. In my considered opinion an action becomes a gamble when you risk something you can’t afford to lose like betting your rent money. The other line not to cross is taking unnecessary risks. I am not suggesting you should live like you are in a straight jacket but with money it’s usually best to be cautious. Taking lots of unnecessary risks can become as addictive as betting on the ponies or sports. The reason for this is both give you an adrenaline rush. The more someone takes unnecessary risks the more likely they will get burned. With that in mind please be conscious, be cautious be smart and pick your battles or risks wisely.

Job creation will likely remain weak for months or even years. But once employers do step up hiring, some economists expect job openings to fall mainly into two categories of roughly equal numbers:

_ Professional fields with higher pay. Think lawyers, research scientists and software engineers.

_ Lower-skill and lower-paying jobs, like home health care aides and store clerks.

And those in between? Their outlook is bleaker. Economists foresee fewer moderately paid factory supervisors, postal workers and office administrators.

That’s the sobering message American workers face as they celebrate Labor Day at a time of high unemployment, scant hiring and a widespread loss of job security. Not until 2014 or later is the nation expected to have regained all, or nearly all, the 8.4 million jobs lost to the recession. Millions of lost jobs in real estate, for example, aren’t likely to be restored this decade, if ever.

On Friday, the government said the August unemployment rate ticked up to 9.6 percent. Not enough jobs were created to absorb the growing number of people seeking work. The unemployment rate has exceeded 9 percent for 16 months, the longest such stretch in nearly 30 years.

The crisis poses a threat to President Barack Obama and Democrats in Congress, whose hold on the House and Senate appears to be at increasing risk because of voter discontent.

Even when the job market picks up, many people will be left behind. The threat stems, in part, from the economy’s continuing shift from one driven by manufacturing to one fueled by service industries.

Pay for future service-sector jobs will tend to vary from very high to very low. At the same time, the number of middle-income service-sector jobs will shrink, according to government projections. Any job that can be automated or outsourced overseas is likely to continue to decline.

The service sector’s growth could also magnify the nation’s income inequality, with more people either affluent or financially squeezed. The nation isn’t educating enough people for the higher-skilled service-sector jobs of the future, economists warn.

“There will be jobs,” says Lawrence Katz, a Harvard economist. “The big question is what they are going to pay, and what kind of lives they will allow people to lead? This will be a big issue for how broad a middle class we are going to have.”

On one point there’s broad agreement: Of 8 million-plus jobs lost to the recession — in fields like manufacturing, real estate and financial services — many, perhaps most, aren’t coming back.

In their place will be jobs in health care, information technology and statistical analysis. Some of the new positions will require complex skills or higher education. Others won’t — but they won’t pay very much, either.

“Our occupational structure is really becoming bifurcated,” says Richard Florida, a professor at University of Toronto. “We’re becoming more of a divided nation by the work we do.”

By 2018, the government forecasts a net total of 15.3 million new jobs. If that proves true, unemployment would drop far closer to a historical norm of 5 percent.

Nearly all the new jobs will be in the service sector, the Labor Department says. The nation’s 78 million baby boomers will need more health care services as they age, for example. Demand for medical jobs will rise. And innovations in high technology and alternative energy are likely to spur growth in occupations that don’t yet exist.

Hiring can’t come fast enough for the 14.9 million unemployed Americans. Counting part-time employees who would prefer full-time jobs, plus out-of-work people who have stopped looking for jobs, the number of “underemployed” is 26.2 million.

Manufacturing has shed 2 million jobs since the recession began. Construction has lost 1.9 million, financial services 651,000.

But the biggest factor has been the bust in real estate. The vanished jobs range from construction workers and furniture makers to loan officers, appraisers and material suppliers. Moody’s Analytics estimates the total number of housing-related jobs lost at 2.4 million. When you include commercial real estate, the number is far higher.

One of them is Martha Escobar, who last month lost her $13.50-an-hour job cleaning an office tower owned by JPMorgan Chase & Co. in Century City, Calif. She was one of 16 janitors, mostly single mothers, who lost jobs as part of the real estate crunch that’s squeezed landlords.

Some of them traveled to New York on Thursday to try to pressure JPMorgan to get its cleaning contractor to take them back, given that the bank earned $8.1 billion during the first half of this year.

“I don’t know what I am going to do if I can’t get my job back,” Escobar, 41, said.

JPMorgan Chase spokesman Gary Kishner said the bank has no say over the layoffs, which he said are handled by the building’s cleaning contractor.

On top of real estate-related job losses, manufacturing is likely to keep shedding jobs, sending lower-skilled work overseas. Millions who worked in those fields will need to find jobs in higher-skilled or lower-paying occupations.

“The big fear is the country is simply not preparing workers for the kind of skills that the country is going to need,” says Gautam Godhwani, CEO of SimplyHired.com, which tracks job listings.

Sectors likely to grow fastest, according to economists and government projections, are:

_ HEALTH CARE

The sector is expected to be the leading job generator, adding 4 million by 2018, according to Labor Department data. An aging population requires more doctors and nurses, physical therapists, home health aides and pharmacists.

Many of these jobs will pay well. Physical therapists averaged about $76,000 last year, according to the department’s data. Others pay far less. Home health care aides earned an average of just $21,600.

Home health care and personal care aides are expected to add about 900,000 jobs by 2018 — 50 percent more than in 2008.

Jennifer Gamboa of Body Dynamics Inc., an Arlington, Va.-based physical therapy firm, says the drive to reduce health care costs should benefit her profession, which can treat pain less expensively than surgery. Gamboa plans to add two employees in the next year.

_ INFORMATION TECHNOLOGY: Technology could be an economic elixir as computers and online networks expand ways to automate services, distribute media and communicate.

Companies will need people to build and secure those networks. That should boost the number of programmers, network administrators and security specialists by 45 percent to 2.1 million by 2018, the government forecasts. Most of these jobs will provide above-average pay.

Technology pay averaged $84,400 in 2008 — nearly double the average private-sector pay of $45,400, according to an analysis of the most recent full-year data by the TechAmerica Foundation, a research group.

_ NEW INDUSTRIES: Deepak Advani, an IBM executive, has a title he says didn’t exist five years ago: “Vice president of predictive analytics.”

Companies and government agencies have amassed data on behavior ranging from shopping habits to criminal activity. Predictive analytics is the art of determining what to do with that data. How should workers’ time be deployed? How best to target customers? Such jobs could grow 20 percent by 2018, the government predicts.

Still, economists say more will be needed to boost job growth. The answer may be some technological breakthrough akin to the personal computer or the Internet.

“Most big booms come from a particular sector that moves the rest of the economy,” said Richard Freeman, a Harvard labor economist.

Technology spurred job growth after the 1982 and 1991 recessions. The PC became revolutionary in the early 1980s. Internet use exploded after the Mosaic Web browser was introduced in 1994. Housing eventually lifted employment after the 2001 dot-com bust.

“There’s a lack of clarity on what the next big thing is going to be this time,” said David Card, an economics professor at the University of California.

Until there is, many people will have to lower expectations and living standards as they enter fields with less pay and less job stability, said Dan Finnigan, CEO of online employment service Jobvite.

“People who are unemployed have to embrace this future that they are going to have many jobs,” he said. “We will always be working on the next gig.”

We’ve previously written about Mr. Dimon’s trouble selling the regal 13,500-square-foot home with eight-bedrooms and nine-bathrooms. Several years ago, Mr. Dimon was asking $13.5 million, but it was priced at $9.5 million earlier this year. Now, it’s $6.95 million. Mr. Dimon can still come out ahead: He paid $4.68 million in 2000.

“They’re trying to make a bold move to get ahead of the market,” Jim Kinney, vice president of luxury sales for Baird & Warner, a residential brokerage in Chicago tells Bloomberg News. “This time next year, that house is not going to be on the market. They’re going to find whatever it takes to get it sold.”

The home built in 1870 boasts a chef’s kitchen, a workout room that includes a steam room, a rooftop terrace and staff quarters. But be warned: The listing pictures were taken when the house was furnished. Mr. Dimon hasn’t lived there since 2004 when he relocated to Manhattan after the J.P. Morgan Chase’s merger with Bank One, where he had been chairman and CEO.

LANSING, Mich. — Democrat Virg Bernero said Thursday he’ll stop the state from doing business with banks that won’t lend in Michigan if he’s elected governor.

He specifically mentioned Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., PNC Financial Services Group Inc. and Wells Fargo & Co., criticizing them for refusing to participate in the state’s Helping Hardest Hit Homeowners Fund.

Democratic Gov. Jennifer Granholm has appealed to the same banks to join the federally funded program, which would provide financial assistance for homeowners struggling to keep up with their mortgage payments.

Bernero also said the banks should be helping more Michigan small businesses get access to the credit they need to expand and hire more workers.

“We are being robbed of our recovery as a result of the lack of capital,” Bernero told reporters after unveiling his plan to about a dozen Lansing residents during a campaign stop at a downtown coffee shop. “If Wall Street doesn’t want to do business with us, then we won’t do business with Wall Street.”

The Lansing mayor also repeated his proposal to have Michigan follow the lead of North Dakota and open a state-owned bank that could make low-interest loans to businesses and college students.

Among the banks Bernero said are benefiting from state business is JPMorgan Chase, which he said the state pays to manage a fund relating to the state’s cash flow.

But the state has far more ties to the banks than Bernero mentioned. As of Wednesday, the State of Michigan Retirement Systems had $650 million in common stock holdings in banking firms Bernero criticized, about 1.4 percent of the total, Treasury spokesman Terry Stanton said.

That included $246 million in stock in Bank of America, $163 million in Citigroup, $135 million in JPMorgan Chase, $88 million in Wells Fargo and $17 million in PNC.

Michigan Bankers Association spokeswoman Gail Madziar wasn’t impressed with Bernero’s proposal to lock out the banks.

“He should be providing a plan to show the ways he would bring jobs to Michigan and go from that point of view rather than attacking businesses already here,” she said.

A spokesman for Bernero’s Republican rival, Rick Snyder, also criticized Bernero for not coming up with better ways to help Michigan’s economy recover.

“There’s a credit crunch all over and that’s an issue that has to be dealt with … (but) the populist platitudes won’t create a single job here in Michigan,” spokesman Bill Nowling said. “Rick has made it very clear we are not going to attack businesses. There has been far too much of that from the Democratic side of the ledger.”

Published: Thursday, September 2, 2010 at 3:00 a.m.
Last Modified: Thursday, September 2, 2010 at 10:25 p.m.

John Knott had reason to celebrate Thursday.

Not only did he turn 65, but he walked out of Sonoma County Superior Court with new hope of avoiding the foreclosure that has dogged him for more than year.

Knott is the first participant in a court program aimed at settling the rash of lawsuits filed by people who are suing to fight foreclosure.

Instead of costly litigation, the court is trying to set the stage for a solution by calling both sides to an informal settlement conference prior to trial.

Superior Court Judge Elaine Rushing, who led development of the program in her role as supervising civil court judge, said judges were not erecting roadblocks to legitimate foreclosures. Rather, she said, banks are often as eager as homeowners to avoid a property seizure.

“If we can find a way that lenders’ needs are satisfied and borrowers can stay in their homes, that is what we’d like to see,” she said.

How well the program works remains to be seen.

Attorney Richard Abbey, a longtime representative of local banks, said it was a noble idea that faced long odds of success.

Many mortgages have been aggregated and sold to investors, making it virtually impossible to get permission to modify loans, he said.

And the fundamental question of taking a house someone can’t afford and making it into one they can afford doesn’t have a simple remedy, especially so deep into the foreclosure process.

“It just ain’t that easy to solve the substantial issues,” Abbey said.

But on Thursday, Knott left the program’s first such conference, held before Superior Court Judge Mark Tansil, feeling he was on the road to a solution, even if it still remained out of grasp.

JPMorgan Chase did not modify the terms of the defaulted loan. But the bank’s attorney did agree to a framework for subsequent discussions, a big difference from the way things have been, Knott said.

“It’s exactly what I expected and hoped for,” he said.

For over a year, Knott said he has gotten nowhere in efforts to modify the $1 million loan that his mother took out against the house in 2007, a year before her death.

About $700,000 of the loan was used to pay a previous mortgage. Much of the balance was used for home care for his infirm mother in her final days, he said.

Knott and his brother struggled first to get the bank to recognize they had assumed responsibility for the loan after she died. The communication problems got worse as they looked for a modification to reduce the interest rate, which is over 7 percent.

JPMorgan Chase, which took over the loan when Washington Mutual went bankrupt, repeatedly lost the mountains of paperwork Knott sent over, he said.

“They have got more documentation than were needed for the Louisiana Purchase,” Knott said.

While Knott tried to negotiate with the bank, the threat of foreclosure never stopped. Since July 2009, the home that Knott helped build as a teenager was scheduled for auction nine times, only to have the sale averted at the last minute each time.

In July, he and his brother sued Chase and filed for a temporary restraining order to prevent the last of the scheduled auctions. That put them on the path to Thursday’s conference.

A spokesman for JPMorgan Chase in San Francisco declined comment on the case, as did the bank’s attorney as he left the courtroom.

But the conference apparently resulted in new interest in negotiating.

David Bush, Knott’s attorney, said the judge’s presence Thursday was a crucial change from earlier attempts at resolving the issue. The bank said it would come back with firm answers on modification by the next court date on Oct. 26, Bush said.

“The presence of a third party with authority really made the difference,” he said.

The next foreclosure settlement conference is scheduled for today. It also involves JPMorgan Chase.

You can reach Staff Writer Sam Scott at 521-5431 or sam.scott@pressdemocrat.com

According to the industry trade group, its pending home sales index increased to a reading of 79.4 based on contracts signed in July compared with NAR’s downwardly-revised reading of 75.5 in June.

The rise in pending home sales was considerably better than market expectations, which were for pending home sales to come in flat for the month of July.

Since the first-time home-buyers tax credit expired in April, the housing market has dramatically slowed as demand for future real estate was artificially moved forward through government tax programs. While it was widely expected to see housing market activity slow, the pace of the slowdown has been much more dramatic than what was expected.

The industry group’s index remains down 19.1% from this same time a year ago and nearly 30% from April’s high.

“Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” said NAR’s chief economist Lawrence Yun in a statement. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers.”

NAR’s pending home sales index is based on contracts signed and are still subject to successful financing and closing on the property in question.

Regionally, pending home sales in the Northeast rose 6.3% but remain down 21.1% from a year ago, NAR said. In the Midwest, sales increased 4.1% but are down 15.6% from last year. Pending home sales in the South were up 1.2% but are down 15.6% from last year and sales in the West rose 11.6% but are down 17.6% from July 2009.

That’s a 14 percent drop from the $1.76 million the New York-based bank spent a year earlier.

For the first six months of the year, JPMorgan Chase spent $3.03 million on lobbying as banking regulations came to the forefront of the national agenda.

That means it spent more on lobbying in the first half of the year than any of the other top 10 banks that received money under the Troubled Asset Relief Program, or TARP, in late 2008 and early 2009.

JPMorgan Chase received $25 billion in loans under the program, which was paid back in June 2009.

Chase lobbied the government about banking system and market reforms; regulations on credit and debit card transaction fees; mortgage modification issues and the rural housing loan program.

The financial regulatory overhaul President Barack Obama signed in July included new rules on a variety of banking operations.

The bank also lobbied on issues related to small business lending, on proposed “cap and trade” policies to reduce greenhouse gas emissions and other energy policies and on various trade and tax matters, including proposed taxes on the financial services industry, according to the report it filed July 20.

The bank lobbied Congress, the Federal Deposit Insurance Corp., the Treasury, Commerce and State departments in April through June.

Thomas Koonce, who worked for Rep. Brad Miller, the House Judicial Committee Democratic staff and former Rep. Stephen Neal, is among those registered to lobby for JPMorgan Chase, said the report filed with the House clerk’s office.

Published: Monday, August 30, 2010 at 6:00 a.m.
Last Modified: Wednesday, August 25, 2010 at 9:21 p.m.

Barbara Caswell’s home in rural west Petaluma was a labor of love. From the placement of trees to the artwork inside her house, she designed and built the plot with meticulous attention to detail to be an extension of the natural environment.

But now Caswell is being evicted from her home after starting a loan modification process with Bank of America that quickly morphed into a foreclosure that could not be stopped. In an all-too-familiar story, Caswell and her family came on hard times and tried to modify their home loan, but even after her husband got a job that allowed them to resume payments at a higher rate, the bank would not take their money to stop the foreclosure process.

“The loan modification process is their responsibility and they are not respecting it,” said Caswell. “It’s almost inhumane.”

After being asked to submit hundreds of pages of records in an attempt to get a modification and later to stop foreclosure, the bank sent them an eviction notice on June 14.

“You think you will save your house after doing one more thing,” said Caswell. “I thought it was a matter of working hard enough. But it doesn’t matter what you do.”

Caswell and her husband bought their Haverfield Lane home in 1992 and raised their daughter on the rural plot of land. Caswell, who worked designing houses before her industry, was hit hard by the recession, designed three other homes nearby on the six-acre subdivision called Haverfield Park.

“I dreamed it up and I created it,” she said. “It was the pride of my career.”

But financial trouble hit Caswell and her husband in 2008, and in October of that year, they called Countrywide Financial, which was later taken over by Bank of America, for a loan modification. The company told them to start the loan modification process by intentionally missing two months payments and sending a letter of hardship. They did just that, going into arrears before sending in financial documents to show their situation. Bank statements, tax returns and letters were then submitted with no response from the bank about whether a modification would be considered.

In December 2008, Caswell’s husband lost his job. For months, Caswell could not find any work in the housing industry, and was forced to take odd jobs.

“For that year, we really had to get by on very little,” said Caswell.

They continued to make modification requests, but the bank was either unresponsive or made unreasonable demands about their modification request, she said. They were told that documents that they submitted had expired after 60 days, but they took longer than 60 days for the bank to process. The bank claimed that numerous documents were lost and had to be submitted again. Caswell went into bank branches to try to speak with someone about the lack of transparency, but they always referred her to a call center.

“You never talk to the same person,” she said.

In November 2009, the bank filed to foreclose on their house. Caswell continued to submit documents and recently her husband got a better job than he had had before they went into arrears. They applied to continue payments at a higher rate than they had paid before, but the bank refused.

“We obviously have been making a good-faith effort,” said Caswell. “They have not.”

Now the family’s possessions sit in storage. They are still applying to stop the foreclosure, but under the bank’s policies they can’t move their furniture in and can’t fully move out. They are now sleeping on a mattress on the floor while they await word on whether they will have to find another place to live.

Bank of America representatives did not respond to requests for comment about their loan modification program.

Throughout Petaluma and the country, similar stories have surfaced regularly.

“The communication is horrible,” Clark Rosen, a Petaluma Realtor, said about the large banks. “It’s really difficult to talk to anyone that will be helpful.”

“They’re huge institutions facing a huge problem,” said Rosen. “It’s like they’ve recognized that they are facing a problem so large that they chop it up into pieces and create outside contractors.”

But the complications posed by different institutions owning different pieces of the loan and different people all across the world processing portions each case are often insurmountable.

“It’s an institutional dysfunction,” said Rosen.

Beyond logistics, others see the delays as a deliberate tactic.

“I don’t know what the reason is, but it’s a tactic they’re using,” said Timo Rivetti, a principal with Keller Williams Realty. “Sellers are frustrated, buyers are frustrated; so are real estate agents, cities and counties.”

“Joe,” who recently sought a loan modification for Petaluma home but wished not to give his real name, said he first went to an advertised “home loan modification specialist” in December 2008. He paid $2,000 up front, but after four months, the company hadn’t done anything. It turned out to be a scam.

“Joe” then sought a loan modification from his bank, Chase, which asked him to fax 300 pages of financial documents. He did so six separate times, each time the bank claiming that they didn’t receive the papers.

“The modification was a joke,” he said. “It’s so obvious a stall tactic that even a child could see it.”

Eventually, he worked out a short sale on his home, and will lose $900,000. “At least we’ll be out from debt,” he said.

“I don’t understand it. How can it be more beneficial for a bank to foreclose on a home than keep a family in a home?” said Bertha Medina, a counselor at the California Human Development Corporation.

Many people now many allege that banks are drawing out loan modifications in an effort to push homes toward foreclosure, which can be actually be a financial benefit for them.

Although foreclosures can be costly for banks if they own the mortgage, the same is not true if they are merely the servicer of the loan. Unlike homeowners and lenders, loan servicers have no incentive not to foreclose. While completing loan modifications can be costly for servicers, foreclosure may not be, and could even provide profits.

A recent class-action lawsuit filed against Bank of America claims that the bank services more than 1 million mortgages that qualify for modifications, but that only 12,761 permanent modifications have been granted. The suit claims that the bank has a failure rate of 99.9 percent on loan modifications and contends that it is not meeting restrictions placed on bailout money received that was designed to encourage loan modifications.

“The fox is in charge of the henhouse in charge of lobbyists and legislation,” said Rivetti, who said that proposed legislative fixes have gotten nowhere.

“Many of my clients are well aware of the lawsuits going on,” said Medina. “The good news is that consumers are much more aware nowadays.”

Medina advised homeowners not to miss payments in an attempt to get a loan modification.

“If they are able to continue to make their mortgage, I recommend they continue to do so,” Medina said.

Most people think it is their own fault. It isn’t,” said “Joe.”

His advice for homeowners in his situation?

“Don’t do anything on your own. Hire an attorney.”

(Contact Philip Riley at phlip.riley@arguscourier.com)

JPMorgan Chase & Co. (NYSE:JPM), previously accused of not modifying mortgages terms for struggling customers, has been defended by a Zacks Analyst Blog report showing otherwise.

JPMorgan Chase & Co. (NYSE:JPM) shares are currently standing at 36.42 as of 8/30/2010, which equates to a -0.20 – -0.55% change over the previous trading period.

JPMorgan Chase & Co.’s (NYSE:JPM) U.S. consumer and commercial banking arm Chase said on Wednesday that it has in fact offered more than 900,000 mortgage modifications since the beginning of 2009 in accordance with the Home Affordable Modification Program (HAMP), in efforts to reduce home foreclosure rates.

The company has met 140,000 homeowners in face-to-face counselling sessions in the hardest-hit areas of home foreclosure.