This is a state by state breakdown of the foreclosure settlement (h/t Yves Smith):

An astute observation from Lambert Strether:

OMFG, look at the weasel wording in the press release:

   “This agreement is very significant in how it addresses the fraud that these banks committed against many homeowners across our state,” said ___.” This agreement not only provides much needed relief to (STATE) [Ha ha, fill in the blank!!!] borrowers, but it also puts a stop to many of the bad [criminal] behaviors that contributed to the mortgage mess in our state and across the country.”

And then there’s “fraud that these banks committed.” So if it’s fraud (against whom?!) then why is nobody going to jail?

UPDATE Oh, I’m sorry. I forgot. Banksters never go to jail. A banana republic like ours has a two-tier system of justice, and banksters have impunity for all crimes. Unlike you, peasants. My bad, seriously.

And is definitely a top comment:

Google tells it like it is. I google the first phrase as a complete string, a la “This agreement is very significant in how it addresses the fraud“, and the first thing that comes up is indeed Tom Miller’s press release, from 9 minutes ago (10:44AM EST), and two or three down after that, links to Nigerian 419 scams, triggered by the similarities between the Miller’s wording, and the scripts of scam artists. Shocker!

(all emphasis mine)

Some of the propaganda (again h/t Yves Smith):

Settlement Graphic and Settlement Graphic

Click the links but first put all heavy and sharp objects out of reach.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Robert Sheer: Elections Are for Suckers

Let’s just dip our fingers in purple ink and pose for photos now that voting has the same significance for us as it had for those Iraqis who got conned into thinking they were participating in some grand democratic experiment.

Our own elections, the ones our government has modeled for the world, are a hoax. What other word should we use to describe this year’s presidential election, whose outcome will turn on which party’s super PACs gets the most generous bribes from billionaires? The Republicans, enabled by decisions of a Supreme Court they still control, were the first out of the gate and are far more culpable in destroying our system of popular governance. But the Democrats, no less committed to winning at any cost to political principle, have now jumped in.

Gail Collins: Tales From the Kitchen Table

This is a really old story, but let me tell you anyway.

When I was first married, my mother-in-law sat down at her kitchen table and told me about the day she went to confession and told the priest that she and her husband were using birth control. She had several young children, times were difficult – really, she could have produced a list of reasons longer than your arm.

“You’re no better than a whore on the street,” said the priest. [..]

Organized religion thrives in this country, so the system we’ve worked out seems to be serving it pretty well. Religions don’t get to force their particular dogma on the larger public. The government, in return, protects the right of every religion to make its case heard.

The bishops should have at it. I wouldn’t try the argument that the priest used on my mother-in-law, but there’s always a billboard on the front lawn.

The biggest banks involved in mortgage fraud have agreed to a $26 billion settlement along with 49 states attorneys general. Oklahoma is the only hold out because the state’s Attorney General, Scott Pruitt, did not believe that the banks should face any penalty. The agreement will “help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years.”

Yves Smith at naked capitalism notes that while the final terms of the agreement have not been released but some of the details have been leaked:

   1. The total for the top five servicers is now touted as $26 billion (annoyingly, the FT is calling it “nearly $40 billion”), but of that, roughly $17 billion is credits for principal modifications, which as we pointed out earlier, can and almost assuredly will come largely from mortgages owned by investors. $3 billion is for refis, and only $5 billion will be in the form of hard cash payments, including $1500 to $2000 per borrower foreclosed on between September 2008 and December 2011.

   Banks will be required to modify second liens that sit behind firsts “at least” pari passu, which in practice will mean at most pari passu. So this guarantees banks will also focus on borrowers where they do not have second lien exposure, and this also makes the settlement less helpful to struggling homeowners, since borrowers with both second and first liens default at much higher rates than those without second mortgages. Per the Journal:

      “It’s not new money. It’s all soft dollars to the banks,” said Paul Miller, a bank analyst at FBR Capital Markets.

   The Times is also subdued:

       Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out because earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected.

   2. Schneiderman’s MERS suit survives, and he can add more banks as defendants. It isn’t clear what became of the Biden and Coakley MERS suits, but Biden sounded pretty adamant in past media presentations on preserving that.

   3. Nevada’s and Arizona’s suits against Countrywide for violating its past consent decree on mortgage servicing has, in a new Orwellianism, been “folded into” the settlement.

   4. The five big players in the settlement have already set aside reserves sufficient for this deal.

Yves goes on to enumerate the top 12 reasons why this settlement really stinks. These are her top 5:

1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.

2. That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401 (k)s. Refis of performing loans also reduce income to those very same investors.

3. That $5 billion divided among the big banks wouldn’t even represent a significant quarterly hit. Freddie and Fannie putbacks to the major banks have been running at that level each quarter.

4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.

5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves. The framework is similar to that of the OCC consent decrees implemented last year, which Adam Levitin and yours truly, among others, decried as regulatory theater.

She goes on to explain how there are no constraints on servicers cheating to reduce their losses and will face no consequences when caught as in the past. With the law suits against Countrywide somehow “folded into the deal”, Bank of America, who is by far the worst offender in the chain of title disaster, gets a “special gift”: “that failing to comply with a consent degree has no consequences but will merely be rolled into a new consent degree which will also fail to be enforced”. As David Dayen at FDL News Desk explains:

As far as the release goes, AG offices that signed onto the lawsuit claimed it was narrowly crafted to only affected foreclosure fraud, robo-signing and servicing (which I don’t feel is all that narrow, but I’m trying to just-the-facts this – ed). The lawsuit that New York AG Eric Schneiderman filed last Friday, suing MERS and three banks for their use of MERS, was preserved fully. There was a last-minute request by the banks to dissolve that lawsuit, but it was not successful. In addition, Schneiderman reserves the right to sue other servicers for their use of MERS along the same lines as the current lawsuit. [..]

Other lawsuits, like Delaware AG Beau Biden’s lawsuit against MERS, Missouri AG Chris Koster’s criminal indictments against DocX, and Nevada AG Catherine Cortez Masto’s suit against LPS and its employees would be able to go forward as well because the banks are not a party to them. However, it’s unclear whether any of those AGs will be able to work their way up the chain to indict bank officers for the same conduct; the likely answer, I assume, would be no. In California, Kamala Harris preserved the right for state officials and large pension funds to sue under the state’s False Claims Act over mortgage backed securities that later fell in value.

The status of Massachusetts AG Martha Coakley’s suit against five banks for foreclosure fraud is unknown. In all likelihood, the Nevada/Arizona suit against Bank of America for failing to follow their responsibilities in the Countrywide settlement will be folded into the deal.

In that settlement, BofA promised to deliver $8.5 billion in relief for Countrywide borrowers who fell victim to deceptive practices in the mortgage process. In reality, only $236 million was ever spent. Weak settlement terms allowed BofA to take credit merely for offering loan modifications to borrowers. And the Nevada suit alleged that BofA immediately started abusing borrowers who tried to get relief under the deal. But that suit is now gone.

As to the role of new Federal task force, if it were to be taken seriously this settlement should have not been completes until the task force’s investigation was finished. A good investigation takes charges that are easy to prove to help get the more evidence for the more difficult ones. By letting the banks walk. As Yves sees it, and she is correct, the investigations in Nevada and Missouri led to criminal charges and arrests that might have led to deals to catch the criminals “higher up the food chain.” There is plenty of evidence of bankruptcy-related filings, such as inflated and bogus fees, and even substantial, completely made up charges that has been ignored that could have led to a bigger settlement and prosecutions. By cutting a deal on robosigning the deeper chain of title problem has now been covered up making it even more difficult to address the on going fraud at high levels, the banks themselves.

So the bottom line is the banks have three years to hand out $5 billion in cash to about one million homeowners that will amount to about $2000 each for the loss of their homes through fraud. They will suffer no other consequences and there will be no further means to prosecute them, even if there is clear evidence of complicity in fraud related to robosigning. There is still the issue of 10 million underwater homeowners with $700 billion in negative equity that will continue to drag on the housing market and the economy for years to come. It would seem the Obama administration has once again screwed the vast majority of Americans to protect the Banks and Wall St. and his supporters are cheering this as another reason to reelect him. I see no reason for the Republicans to worry about another four years of Obama.

Up Date: If you’re one of the victims of the banking ghouls, you might not want to visit the new website for “The National Mortgage Settlement” The picture alone might make you want to do something you’d regret. The site details the agreement. David Dayen gives a brief synopsis of some of the gorier detail:

$750 million in a payment to the federal government;

$4.5 billion in direct payments to the states, of which $1.5 billion will go to those $2,000 checks to borrowers, and $2.75 billion to state foreclosure prevention services like legal aid, mandatory mediation and other programs. So the hard money comes to $5.25 billion.

$20 billion in “direct consumer relief”;

$3 billion to help current underwater borrowers refinance, and $17 billion in “credits” for principal reductions. HUD estimates that the dollar value of this will come to $32.3 billion in the end, as we’ve discussed. HUD Secretary Donovan has alternately said that a “substantial” amount of this money will come from MBS investor loans, and also that the large majority would come out of bank-owned loans. Also second liens have to be reduced along with firsts at least pari passu (on equal terms).

In addition, officials are touting the nationwide servicing standards that will be ushered in with this deal. Left out of this is the fact that the CFPB now has control over the servicing market, and can regulate national standards all by themselves.

The site mentions what the settlement doesn’t cover:

Release any criminal liability or grant any criminal immunity.

Release any private claims by individuals or any class action claims.

Release claims related to the securitization of mortgage backed securities that were at the heart of the financial crisis.

Release claims against Mortgage Electronic Registration Systems or MERSCORP.

Release any claims by a state that chooses not to sign the settlement.

End state attorneys general investigations of Wall Street related to financial fraud or the financial crisis.

We still don’t have any specific answers to the letter that Nevada AG Masto sent to the settlement negotiators. What Davyen finds really annoying is that the specific details haven’t been released to the  public who really deserves to know how badly they are being screwed.

I may have a separate article later as more specifics trickle down

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 9 is the 40th day of the year in the Gregorian calendar. There are 325 days remaining until the end of the year (326 in leap years).

On this day in 1950, Joseph Raymond McCarthy, a relatively obscure Republican senator from Wisconsin, accuses State Department of being infiltrated by communists. McCarthy announces during a speech in Wheeling, West Virginia, that he has in his hand a list of 205 communists who have infiltrated the U.S. State Department. The unsubstantiated declaration, which was little more than a publicity stunt, suddenly thrust Senator McCarthy into the national spotlight.

Asked to reveal the names on the list, the reckless and opportunistic senator named officials he determined guilty by association, such as Owen Lattimore, an expert on Chinese culture and affairs who had advised the State Department. McCarthy described Lattimore as the “top Russian spy” in America.

These and other equally shocking accusations prompted the Senate to form a special committee, headed by Senator Millard Tydings of Maryland, to investigate the matter. The committee found little to substantiate McCarthy’s charges, but McCarthy nevertheless touched a nerve in the American public, and during the next two years he made increasingly sensational charges, even attacking President Harry S. Truman’s respected former secretary of state, George C. Marshall.

Wheeling speech

McCarthy experienced a meteoric rise in national profile on February 9, 1950, when he gave a Lincoln Day speech to the Republican Women’s Club of Wheeling, West Virginia. His words in the speech are a matter of some debate, as no audio recording was saved. However, it is generally agreed that he produced a piece of paper that he claimed contained a list of known Communists working for the State Department. McCarthy is usually quoted to have said: “The State Department is infested with communists. I have here in my hand a list of 205-a list of names that were made known to the Secretary of State as being members of the Communist Party and who nevertheless are still working and shaping policy in the State Department.”

There is some dispute about whether or not McCarthy actually gave the number of people on the list as being “205” or “57”. In a later telegram to President Truman, and when entering the speech into the Congressional Record, he used the number 57. The origin of the number 205 can be traced: In later debates on the Senate floor, McCarthy referred to a 1946 letter that then-Secretary of State James Byrnes sent to Congressman Adolph J. Sabath. In that letter, Byrnes said State Department security investigations had resulted in “recommendation against permanent employment” for 284 persons, and that 79 of these had been removed from their jobs; this left 205 still on the State Department’s payroll. In fact, by the time of McCarthy’s speech only about 65 of the employees mentioned in the Byrnes letter were still with the State Department, and all of these had undergone further security checks.

At the time of McCarthy’s speech, communism was a growing concern in the United States. This concern was exacerbated by the actions of the Soviet Union in Eastern Europe, the fall of China to the communists, the Soviets’ development of the atomic bomb the year before, and by the contemporary controversy surrounding Alger Hiss and the confession of Soviet spy Klaus Fuchs. With this background and due to the sensational nature of McCarthy’s charge against the State Department, the Wheeling speech soon attracted a flood of press interest in McCarthy.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day

Katrina vanden Heuvel: What We Learned From Planned Parenthood: Fighting Back Works

In 2010, when the right-wing echo chamber succeeded in destroying ACORN-a group Bill Moyers described as “more devoted to helping poor people become their own best champions” than any group he’d ever covered as a journalist-Senator Bernie Sanders offered this warning:

“These same forces drummed Van Jones out of the White House. The rightwing echo chamber is now two-for-two, and no one should have any illusions that it won’t be back.”

Sanders’ words proved prescient. Since 2010 Planned Parenthood-along with organized labor-has been a prime target of a well-funded and relentless effort by Republicans to dismantle and destroy progressive institutions. While the right might employ different tactics depending on the target, the goal is the same: take down progressive groups that have institutional strength.

Nancy Goldstein: Proposition 8 Is Unconstitutional. What’s Next for the Anti-Gay Law?

Today’s decision overruling Proposition 8 is deeply satisfying. The randomly assigned three-judge panel for the U.S. Court of Appeals for the 9th Circuit Court went beyond finding, 2-1, that Prop 8’s amendment of California’s state constitution failed the rational basis test and violated the Equal Protection Clause of the 14th Amendment of the United States Constitution. Judge Reinhardt’s 128-page decision also skewers the claims of Prop 8’s proponents to be protecting marriage, revealing their alleged concerns as nothing more than sheer mean-spirited prejudice tricked out as paternalism. To wit, “Proposition 8 served no purpose, and had no effect, other than to lessen the status and human dignity of gays and lesbians in California.”

This is rousing stuff and one of the biggest losses that anti-equality supporters have ever suffered. “Even though this is a narrow decision that applies only to California, it will return us to same-sex marriage in an important state – one that has 40 million people and a disproportionate influence on the politics and culture of the country,” says Dale Carpenter, law professor at the University of Minnesota.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 8 is the 39th day of the year in the Gregorian calendar. There are 326 days remaining until the end of the year (327 in leap years).

On this day in 1828, Jules Gabriel Verne is born in Nantes, Brittany in France. He was a French author who pioneered the science-fiction genre. He is best known for novels such as Twenty Thousand Leagues Under the Sea (1870), A Journey to the Center of the Earth (1864), and Around the World in Eighty Days (1873). Verne wrote about space, air, and underwater travel before air travel and practical submarines were invented, and before practical means of space travel had been devised. He is the third most translated individual author in the world, according to Index Translationum. Some of his books have been made into films. Verne, along with Hugo Gernsback and H. G. Wells, is often popularly referred to as the “Father of Science Fiction”.

Literary debut

After completing his studies at the lycée, Verne went to Paris to study for the bar. About 1848, in conjunction with Michel Carré, he began writing libretti for operettas. For some years his attentions were divided between the theatre and work, but some travellers’ stories which he wrote for the Musée des Familles revealed to him his true talent: the telling of delightfully extravagant voyages and adventures to which cleverly prepared scientific and geographical details lent an air of verisimilitude.

When Verne’s father discovered that his son was writing rather than studying law, he promptly withdrew his financial support. Verne was forced to support himself as a stockbroker, which he hated despite being somewhat successful at it. During this period, he met Victor Hugo and Alexandre Dumas, pére, who offered him writing advice.

Verne also met Honorine de Viane Morel, a widow with two daughters. They were married on January 10 1857. With her encouragement, he continued to write and actively looked for a publisher.

Verne’s situation improved when he met Pierre-Jules Hetzel, one of the most important French publishers of the 19th century, who also published Victor Hugo, Georges Sand, and Erckmann-Chatrian, among others. They formed an excellent writer-publisher team until Hetzel’s death. Hetzel helped improve Verne’s writings, which until then had been repeatedly rejected by other publishers. Hetzel read a draft of Verne’s story about the balloon exploration of Africa, which had been rejected by other publishers for being “too scientific”. With Hetzel’s help, Verne rewrote the story, which was published in 1863 in book form as Cinq semaines en balloon (Five_Weeks_in_a_Balloon Five Weeks in a Baloon). Acting on Hetzel’s advice, Verne added comical accents to his novels, changed sad endings into happy ones, and toned down various political messages.

From that point, Hetzel published two or more volumes a year. The most successful of these include: Voyage au centre de la terre (Journey to the Center of the Earth, 1864); De la terre à la lune (From the Earth to the Moon, 1865); Vingt mille lieues sous les mers (Twenty Thousand Leagues Under the Sea, 1869); and Le tour du monde en quatre-vingts jours (Around the World in Eighty Days), which first appeared in Le Temps in 1872. The series is collectively known as “Voyages Extraordinaires” (“extraordinary voyages”). Verne could now live on his writings. But most of his wealth came from the stage adaptations of Le tour du monde en quatre-vingts jours (1874) and Michel Strogoff (1876), which he wrote with Adolphe d’Ennery. In 1867 Verne bought a small ship, the Saint-Michel, which he successively replaced with the Saint-Michel II and the Saint-Michel III as his financial situation improved. On board the Saint-Michel III, he sailed around Europe. In 1870, he was appointed as “Chevalier” (Knight) of the Légion d’honneur. After his first novel, most of his stories were first serialised in the Magazine d’Éducation et de Récréation, a Hetzel biweekly publication, before being published in the form of books.

In his last years, Jules Verne wrote a novel called Paris in the 20th Century about a young man who lives in a world of glass skyscrapers, high-speed trains, gas-powered automobiles, calculators, and a worldwide communications network, yet cannot find happiness and comes to a tragic end. Hetzel thought the novel’s pessimism would damage Verne’s then booming career, and suggested he wait 20 years to publish it. Verne put the manuscript in a safe, where it was discovered by his great-grandson in 1989. It was published in 1994.

In 1905, while ill with diabetes, Verne died at his home, 44 Boulevard Longueville (now Boulevard Jules-Verne).

This morning the US 9th Circuit Court of Appeals has ruled that California’s Prop 8 is unconstitutional striking down the ban on gay marriage under both the Due Process and Equal Protection clauses of the U.S. Constitution’s 14th Amendment. The ruling is limited and specific to California only.

“Proposition 8 served no purpose, and had no effect, other than to lessen the status and human dignity of gays and lesbians in California,” the court said.

The ruling upheld a decision by retired Chief U.S. District Judge Vaughn R. Walker, who struck down the ballot measure in 2010 after holding an unprecedented trial on the nature of sexual orientation and the history of marriage.

The ruling makes same sex marriage legal again in California but it is expected that the court will not permit marriages to take place while the appeals are in progress. The backers of Prop 8 have stated that they will appeal this ruling but have not said if they would request a the full 9th Court to hear the appeal or take it directly to the US Supreme Court.

Ninth Circuit Prop. 8 decision

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Joe Nocera; Poisoned Politics of Keystone XL

On Monday, Stephen Harper, the prime minister of Canada, traveled to China for a week of high-level meetings.  He brought with him a handful of his cabinet ministers, including Joe Oliver, his tough-talking minister of natural resources who, until recently, had been withering in his scorn for the opponents of the Keystone XL oil pipeline, which President Obama rejected a few weeks ago.  The pipeline, of course, was intended to transport vast oil reserves in Alberta to the American refineries on the Gulf of Mexico.

Oliver no longer talks so freely about the environmental critics of the Keystone pipeline; all of Harper’s ministers have been instructed to stop making comments that might be construed as interfering in the American presidential election.  But there are other, more diplomatic, ways to send messages.  Like going to China with your cabinet members and cutting energy deals with a country that has, as The Globe and Mail in Toronto put it recently, a “thirst for Canadian oil.”  Oil, I might add, that may be a little dirtier than the crude that pours forth from the Saudi Arabian desert – that is one of the main reasons environmentalists say they oppose Keystone – but is hardly the environmental disaster many suppose.

New York Times Editorial: The Payroll Tax Fight

Republicans in Congress seem to have forgotten the embarrassment they suffered late last year for trying to block a payroll tax cut for millions of wage-earners. The two-month extension they reluctantly approved will run out in three weeks, yet, again, they are stalling a full-year’s tax cut with extraneous issues and political ploys. [..]

Republicans, on the other hand, are only interested in extending the tax benefits for working Americans if they can punish other groups. They want to extend the freeze on wages for federal workers to a third consecutive year, and appeal to their base by barring the use of welfare debit cards at casinos and strip clubs. This is hardly a national problem; a few states have allowed that, but most have cracked down on it.

Republicans seem no more serious about cutting the tax and stimulating the economy than they were in December. They may be furious that President Obama is campaigning against a do-nothing Congress, but they don’t seem as if they’re planning to actually do something.

As the the multistate foreclosure settlement inches to some conclusion, the Big Banks have dropped the other shoe. They won’t sign on to the agreement unless Schneiderman drops his law suit against them and MERS. The proposed settlement would also require the attorneys general from Nevada, Massachusetts and Arizona to drop their litigation should they decide to sign onto the agreement:

Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. made a last-minute demand that New York drop claims filed against them Feb. 3 as a condition of the settlement, a person familiar with the matter said. [..]

New York sued Bank of America, JPMorgan and Wells Fargo in state court in Brooklyn, saying their use of a mortgage database known as MERS led to improper foreclosures. Schneiderman said the banks’ use of the Mortgage Electronic Registration Systems database misled homeowners, undermined foreclosure proceedings and created uncertainty about ownership interests in properties.

The banks have asked that many of the claims in the complaint be thrown out, said the person. The other two banks involved in the nationwide settlement proposal, Ally Financial Inc. and Citigroup Inc., weren’t named in the complaint. [..]

The proposed settlement already requires Massachusetts, Nevada and Arizona, which have sued banks involved in the talks, to settle their claims, a person familiar with them said.

Nevada and Arizona each sued Bank of America over mortgage- servicing practices, accusing it of misleading consumers, while Massachusetts sued all five banks.

It appears that the agreement would give the banks immunity from prosecution and civil suits from mortgage origination fraud. The settlement does not prevent an investigation into mortgage securitization (secondary mortgage fraud), it would give the banks a free pass on all the fraudulent foreclosures and mortgages that are the primary cause of the housing market crash.

So where does this leave the new unit the President Obama created to investigate mortgage fraud? Professor of law and economics at the University of Missouri-Kansas City, Bill Black, spoke with Theresa Riley on Bill Moyers & Compnany:

The special new unit is a charade. There will be no prosecutions of any elite criminals. Obama has made sure of that.

Meanwhile the agreement is inching towards a conclusion with Iowa Attorney General announcing that 40 states have agreed to sign:

“The sign-on deadline for the proposed joint state-federal mortgage servicing settlement passed Monday with more than 40 states signing on,” Miller said “This enables us to move forward into the very final stages of remaining work.Federal and state officials, as well as representatives from the banks, continue to address matters that they must complete before finalizing any settlement.”

Delaware Attorney General Beau Biden, who spoke with MSNBC’s Dylan Ratigan, indicated he will sign on only if he can continue to pursue MERS and not be precluded from adding the banks from the suit.

Apparently Missouri’s Attorney General didn’t get the word about not filing suits. He not only filed a criminal lawsuit against DocX, one of the largest companies that provided home foreclosure services to lenders across the nation, for forgery in the preparation of documents used to evict financially strained borrowers from their homes but arrested Lorraine O. Brown, the company’s founder and former president.

Chris Koster, the Missouri attorney general, will prosecute the case. “The grand jury indictment alleges that mass-produced fraudulent signatures on notarized real estate documents constitutes forgery,” Mr. Koster said in a statement. “Today’s indictment reflects our firm conviction that when you sign your name to a legal document, it matters.”

Mr. Koster said his office’s investigation was continuing. This suggests he may hope to persuade Ms. Brown to cooperate in his investigation of the parent company. If convicted, Ms. Brown could face up to seven years in prison for each forgery count. DocX could be fined up to $10,000 for each forgery conviction.

Hey, Mr. President, this is what needs to be done on a federal level.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 7 is the 38th day of the year in the Gregorian calendar. There are 327 days remaining until the end of the year (328 in leap years).

On this day in 1795, The 11th Amendment to the United States Constitution is ratified. It dealt with each state’s sovereign immunity from being sued in federal court by someone of another state or country.

The Eleventh Amendment (Amendment XI) to the United States Constitution, which was passed by the Congress on March 4, 1794 and was ratified on February 7, 1795, deals with each state’s sovereign immunity from being sued in federal court by someone of another state or country. This amendment was adopted in order to overrule the U.S. Supreme Court‘s decision in Chisholm v. Georgia, 2 U.S. 419 (1793).]

Amendment Eleven:

   The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

By itself this Amendment is a little impenetrable. It was passed as a clarification of Article 3, Section 2 of the Constitution, specifically Clause One which reads:

Clause 1:

   The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;–to all Cases affecting Ambassadors, other public Ministers and Consuls;–to all Cases of admiralty and maritime Jurisdiction;–to Controversies to which the United States shall be a Party;–to Controversies between two or more States;–between a State and Citizens of another State; between Citizens of different States,–between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects

Basically what this boils down to is the concept of Sovereign Immunity. Basically you can not use the Federal Government unless it agrees to let the case be heard. Yes, you read that right. The Government reserves the right to prevent you from suing it, as a citizen, except under very specific circumstances. The exceptions are detailed in the Federal Tort Claims Act and the Tucker Act. These acts allow a citizen to sue the Government if there is a claim resulting from either the actions of a federal employee or if there is a case involving contracts with the Federal Government.

Now, Amendment 11 extends this same sovereign immunity to the States in terms of the Federal Courts. What that means is that you as a citizen can not use the Federal Courts to sue your State Government, without the consent of the State. The Dog believes the reason for this is to prevent citizens from tying up their government with suits that arise from the normal operation of the government. As a practical matter it forces citizens that don’t like the way things are being run to replace their government officials instead of just suing the government.

Now, this does not apply to crimes committed by members of the government or the government itself. There is what is called a Stripping Doctrine that says when a government employee or official commits a crime, they have lost their immunity. So, in the case of torture or War Crimes there can be no reasonable sovereign immunity defense.

h/t Something the Dog Said