Audit Notes: A Foreclosure Tragedy, Dirty Diapers, 1994, Hyatt’s Jingle Mail

The Miami Herald finds a sad twist on the foreclosure scandal: Who do you sue when your toddler drowns in an abandoned house’s poorly secured pool and nobody can figure out which bank owns the damn thing?

It took months for the family’s attorney, Janet Spence of Pembroke Pines, to sort through the property’s muddied chain of title possessions and transfers. At one point, Spence said, the home had two separate foreclosure actions pending simultaneously…

Several documents transferring the mortgage appear to be flawed or possibly fraudulent, with conflicting dates…

Because of the confusing paper trail, Spence has named 20 defendants in the case. They include banks that once owned the mortgage, companies that serviced the loan, property maintenance companies and even a company that was holding the mortgage for the banks.

And then there’s the public-safety issues raised by the confusion or dereliction, whichever it is:

Untold thousands of foreclosed homes across the United States pose an added public safety hazard because of their green, murky backyard pools, which can breed mosquitoes, nourish problem animals and rodents, or, in the case of Isaac Dieudonne, attract young children…

“What you’ve described is a really tragic example of what happens when properties are abandoned and no one individual or institution will accept responsibility for the property,” said Dan Kildee, president of the Center for Community Progress, which pushes for redeveloping vacant and abandoned properties. “It’s particularly troubling when mortgage-foreclosed properties are managed by a servicer who claims they don’t own the property and therefore they don’t have any obligation to protect the public.”

Nice work by the Herald.

— Business Insider reports that has launched a price war on, which, as a result, may go out of business.

A source familiar with the matter tells us that Amazon has approached the company about an acquisition several times in the past. But Quidsi has refused to sell.

And now Amazon appears to be trying to kill by selling its core product—diapers—at a huge discount.

My questions: Is Amazon selling this product at a loss? And is it doing so to crush a competitor? If so, isn’t that illegal?

I’d like to see the Journal or somebody pick up on this and take a hard look at it. It doesn’t, uh, smell right.

— My friend Moe Tkacik runs some numbers on the differences between 1994 and 2010, noting how almost all of the income gains have gone to the wealthiest 1 percent.

But this particularly caught my eye:

So I tried to find numbers that were as unsullied as possible, without too many percentages, averages, subtle changes in methodology or adjustments for inflation. The consumer price index says that $1.00 then bought what $1.47 gets you today, but I’ve got a Washington City Paper from 1995 right here chock full of 75-cent draft beer specials and dozens if not hundreds of classifieds advertising Adams Morgan and Mount Pleasant housing shares in the under-$300 price range.

You need to know what you’re doing or get lucky to find a beer for under five bucks in the District these days, much less a $300 room (or even a $441 one, adjusted for official inflation).

And, even though I understand that D.C. has gentrified over the last decade-and-half that makes Moe’s point, if you think about it.

It’s also one reason why people don’t really buy the official inflation statistics.

— My former Journal colleague Theo Francis of Footnoted has a good follow-up on how Hyatt walking away from its mortgage defaulting on its obligations.

In a previous post, he noted the stark contrast between how a corporate hotel giant is treated when it mails the bank the keys (even though it can easily afford to pay the mortgage) and how American homeowners are. Which is a good excuse to run this amazing Daily Show segment on how the Mortgage Bankers Association defaulted on its own mortgage in D.C. while sermonizing against homeowners doing the same:

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Mortgage Bankers Association Strategic Default
Daily Show Full EpisodesPolitical HumorRally to Restore Sanity

Francis today:

Now we know how the decision to walk away affected Hyatt: It made money, at least on paper.

It took a $35 million accounting gain, which was most of its third-quarter pre-tax profit.

All in all, not a bad outcome for a “strategic default,” to borrow a phrase from the Fannie Mae executive we cited in our previous post on this hotel.


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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,