The story tells of a family, the Atchleys,

who almost lost their home in early 2006 when legal representatives of their loan servicer, Countrywide, incorrectly told the court that the Atchleys were 60 days delinquent in Chapter 13 plan payments two times over four months. Borrowers can lose their homes if they fail to make such payments.

After the Atchleys supplied proof that they had made their payments on both occasions, Countrywide withdrew its motions to begin foreclosure. But the company also levied $2,793 in fees on the Atchleys’ loan that it did not explain, court documents said. “Every paycheck went to what they said we owed,” Robin Atchley said. “And every statement we got, the payoff was $179,000 and it never went down. I really think they took advantage of us.”

The Atchleys, who have four children, sold the house and now rent. Mrs. Atchley said they lost more than $23,000 in equity in the home because of fees levied by Countrywide.

And the big picture:

A recent analysis of 1,733 foreclosures across the country by Katherine M. Porter, associate professor of law at the University of Iowa, showed that questionable fees were added to borrowers’ bills in almost half the loans.

Specific cases inching through the courts support the notion that figures supplied by lenders are often incorrect. Lawyers representing clients who have filed for Chapter 13 bankruptcy, the program intended to help them keep their homes, say it is especially distressing when these numbers are used to evict borrowers.

And, yes, there’s a difference between an academic study of 1,700 foreclosures and a survey by conflicted flacks of real-estate hacks, which is what the Journal relies on.

If business-press readers want the borrowers’ story, read the Times.

Good at Ground Zero

A Credit in the Fortune ledger this week for an excellent story on the hulking shell of the Deutsche Bank building that still looms at the World Trade Center site. This is good off-the-news coverage, and it’s something we’ve been waiting for.

Heavily reported (fifty interviews) by senior editor Nicholas Varchaver, along with research associates Doris Burke and Susan M. Kaufman, the story lays bare the environmental, technical, and political issues at stake in the saga and asks the right questions:

From a dispute between Deutsche Bank and its insurers, to battles between an overmatched agency assigned to revitalize lower Manhattan and environmental regulators, to the pressure from residents, to the brief presence of a Mob-connected contractor that was followed by a shadowy replacement with a name borrowed from an Ayn Rand novel, it’s been a miasma—a toxic project. It’s also a case study in what happens when good intentions collide with a paralyzing fear of making mistakes.

The paradoxes are endless. How did this project manage to be simultaneously hyper-scrutinized—with armies of regulators and monitors on the premises daily—and sloppy and out of control? And how is it that this skyscraper, the subject of tens of millions of dollars’ worth of environmental studies, is today described by some as a toxic nightmare and by others as only marginally contaminated? Then there’s this maddening bit of irony: Many of the calamities along the way were not only foreseeable but actually foreseen.

Fortune elegantly tells the story of the morass at Ground Zero through the story of this one building.


Debit the New York Observer and its muddled piece this week on the Bear Stearns saga.

To be honest, we’re not quite sure what the point is, but we think it’s something about the Bush administration tricking the press into thinking the financial crisis was more serious than it was so they could bail out a Wall Street bank. It’s confused in more than one way:

The roots of Bear Stearns’ collapse and of the current crisis are actually easy to grasp: The debt from subprime mortgages, which were fantastically easy to get in the housing boom’s heady days, was securitized, and those securities were traded like stocks.

They weren’t traded like stocks. There’s no exchange you can buy and sell these things on. That was part of the problem: no one knows what the values are.

The financial system—the actual nuts and bolts of American capitalism, the mechanisms and machinations that keep us, however close to teetering off, at the top of the heap and the envy of most even during tougher times at home—was never in mortal danger from one risk-addicted investment bank and its government enablers. The coverage eventually caught up with this reality once the hyperbole had its day(s).

Anna Bahney is a Fellow and staff writer for The Audit