Tag: Mortgage Fraud

Recent attempts by the Obama administration to persuade New York State Attorney General Eric

Schneiderman to sign off on the 50 state agreement that was being brokered by Iowa AG has resulted in Schneiderman being removed from the panel last week. In the on going power play to get Schneiderman to play ball with an agreement that would allow the banks to get away with a piteous fine and protection from any litigation regarding fraudulent foreclosures, Matt Stoller, formerly of Open Left and former Senior Policy Advisor to Rep. Alan Grayson, writes a revealing article at Naked Capitalism that examines President Obama and AG Tom Miller dishonesty in the negotiations and their need to squash Schneiderman’s investigations. Stoller argues that all the parties are doing what they think is right not because any of them must but because it is their choice. While it can be said that is somewhat true, there is the matter of law that they have all sworn to uphold. Scheiderman seems to be the one of the few, along with Delaware AG Beau Biden and Massachusetts Attorney General Martha Coakley, who is doing just that:

The banking system is really at the heart of our politics, which is why it’s such a great test of one’s political theory of change. I’ve been following the foreclosure fraud story for a few years now, because it’s the tail end of a massive economy-wide fraud scheme that started as early as 2003. The securitization chain failure can’t be put back in the bottle, the housing system it collapsed is simply too big to bail. So elites keep trying to patch this up the way they have everything else. It isn’t working. And their scheme has been obvious and obviously dishonest. Along with Obama (who I criticized as empty as early as 2004, ratcheting this up to dishonest and authoritarian by 2006-2007), I pointed out that Iowa Attorney General Tom Miller was engaged in serious bad faith only a few months after the negotiations started.

I’m no genius, I just listened to what these people actually said and did. Obama mocks the idea that he is an honest politician, overtly, lying about NAFTA and FISA very early on in power. Miller lied to activists about being willing to put bankers in jail, and then said he was negotiating with banks in secret. It was overt. For Miller, as with Obama, few people really picked up on the lies until recently. Iowa activists who heckled Miller got it, as did Naked Capitalism readers. Now it’s becoming more and more obvious. That’s just how it is, I suppose, people in the establishment are paid to not notice corruption until the harsh glare is too bright.

The crazy thing is that robosigning is apparently still going on. Right now, the “settlement” talks are the equivalent of law enforcement negotiating with a serial killer over whether he’ll get a parking ticket, even as he continually sprays bullets into the neighborhood. Even having these “settlement” talks when the actual crimes haven’t been investigated or a complaint hasn’t been registered should be example enough that this process is rigged as badly as Dodd-Frank. It should not be a surprise that the administration is putting pressure on Eric Schneiderman, that Tom Miller is kicking him out of the club house. That’s who these people are. It’s what they believe in. Just as it should not be a surprise, though it is laudable, that Schneiderman isn’t knuckling under to the administration. I suspect he probably is laughing at the idiocy of Miller’s pressure tactic. I mean, this is a guy going up some of the most powerful entities in the United States: Bank of New York Mellon, Bank of America, the New York Fed, etc. And the Iowa Attorney General isn’t going let him on conference calls? Mmmkay.

Stoller doesn’t end there with his indictment of the corruption and sell out to the banks. He call out the failure of Obama’s policy agenda in the wake of the 2010 defeats as a wake up call to Democrats and the party:

From 2006-2008, the Bush administration’s failures crashed down upon conservatives, and they in many ways could not cope. But their intellectual collapse was bailed out by Obama. Faux liberals are seeing their grand experiment in tatters, though right now they can only admit to feeling disappointed because the recognition that they have been swindled is far too painful. And the recognition for many of the professionals is even more difficult, because they must recognize that they have helped swindle many others and acknowledge the debt they have incurred to their victims. The signs of coming betrayal were there, but in the end it all comes down to judging people based on what they do and who they choose as opponents. And this Democratic partisans did not do, choosing instead a comfortable delusional fantasy-land where foreclosures don’t matter and theft enabled by Obama (and Clinton before him) doesn’t matter.

Ouch.

Of course there is always the possibility that a “minor player” such as Schneiderman can be easily taken down with an overblown personal scandal, as was former NY AG and governor, Eliot Spitzer. Schneiderman seems unfazed and unmoved by the threats and accusations that he undermining a bogus settlement with the banks that would help thousands of homeowners. And after the failures of other programs, such as HAMP, who is really going to believe that this is the cure?

The latest development in this on going battle for a realistic Main St rescue came when John O’Brien, Registry of Deeds for Southern Essex County in Massachusetts is requested that Iowa AG Tom Miller step down:

Schneidernan getting kicked off the committee should come as no surprise to anyone following the foreclosure negotiations and is sickeningly similar to Pam Bondi, Florida’s Attorney General firing Theresa Edwards and June Clarkson, who were heading up investigations on a series of mortgage related crimes for over a year.

While Bondi insists that the firings were a result of poor job performance, Miller points more towards attitude and that Schneiderman is somehow not a team player.

snip

This is like Pam Bondi firing the two assistant AGs in Florida,” O’Brien said. “Miller claims that Schneiderman was undermining the negotiations. Why wouldn’t he since the negotiations are far from being in the best interest of homeowners and the general public? This settlement clearly favors the banks and I’m one hundred percent behind Eric Schneiderman. This is an outrage and they are beginning the process of selling the American people down the drain I say Miller should step down and all AGs should be appalled at what has happened.”

Schneiderman’s removal will likely make it easier for state and federal officials to reach an accord with the five banks. However, the potential amount of money they’ll be able to extract will likely decrease.

American Banker posted the 27 term sheet of the negotiations presented to the banks with major servicing operations by the AGs and Federal Banking Regulators.

The deal completely handcuffs state attorneys general whose constituents are suffering serious economic damage as a result of the foreclosure fiasco and fraud by the banks and servicers.

When the investigation into robo-signing and fraud, Tom Miller had a brief moment of righteous advocacy until he received $261,445 in campaign contributions from out-of-state law firms and donors from the finance, insurance, and real estate sector shortly after he announced he was seeking criminal charges and retribution from the banks for mortgage fraud — that’s 88 times what he has received in the past decade.

Nice pay off, Tom. Now, I wonder what Barack’s campaign is getting?

Once again the President who campaign on the restoration of the rule of law falls on the wrong side. The New York Times writer, Gretchen Morgensen, revealed in an article that the Obama Justice Department and Housing and Urban Development were putting pressure on New York State Attorney General Eric Schneiderman to drop his investigation into the banking industries foreclosure fraud that led to the economic housing crisis:

Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.

Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.

But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.

In other words, this is going to take too long and we have an election to finance. Please, do not piss off the banksters, they’re the only ones with money.

Obama administration doesn’t want to help the homeowners or prosecute those who committed this fraud, as David Dayen so bluntly states, they want to “white wash the fraud”:

The White House must think that if they can get Schneiderman, the AG with the most leverage over the talks by virtue of New York’s important position with respect to mortgage securitization, to bend, they can roll the rest as well. The WSJ article says that federal officials have a Labor Day target date for a settlement, and that they’ll continue “outreach” to all AGs. I bet they will.

The banks want at least 40 states signing off on this settlement before they agree to it. I can think of at least 10 AGs right now who wouldn’t agree to the broadest terms. Democrats Madigan, Schneiderman, Delaware’s Beau Biden (the VP’s son, who has joined Schneiderman on his intervention into the Bank of America settlement with investors over mortgage backed securities), Massachusetts’ Martha Coakley and Nevada’s Catherine Cortez Masto are on the record against a broad liability release in one way or another, and others like Washington’s Rob McKenna (R), Colorado’s John Suthers (R), California’s Kamala Harris, and even Utah’s Mark Shurtleff (R) and Michigan’s Bill Schuette (R) have active investigations or lawsuits on this issue. That’s an incomplete list off the top of my head. And if you add Republican anti-government types who don’t want to see any monetary penalty at all, you might not get to 25 in favor.

Of course this has earned a couple of people the dubious honor of not being named “wankers” but two of the worst people by Dayen and our man of few words, Atrios.

From Dayen the honor goes to Kathryn S. Wylde, board member of the Federal Reserve Bank of New York:

   The lawsuit angered Bank of New York Mellon, and as Mr. Schneiderman was leaving the memorial service last week for Hugh Carey, the former New York governor who died Aug. 7, an attendee said Mr. Schneiderman became embroiled in a contentious conversation with Kathryn S. Wylde, a member of the board of the Federal Reserve Bank of New York who represents the public. Ms. Wylde, who has criticized Mr. Schneiderman for bringing the lawsuit, is also chief executive of the Partnership for New York City. The New York Fed has supported the proposed $8.5 billion settlement {…}

   Characterizing her conversation with Mr. Schneiderman that day as “not unpleasant,” Ms. Wylde said in an interview on Thursday that she had told the attorney general “it is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street – love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.”

And from Atrios, his honor goes to HUD Secretary Shaun Donovan for this gem:

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks. … In an interview on Friday, Mr. Donovan defended his discussions with the attorney general, saying they were motivated by a desire to speed up help for troubled homeowners. But he said he had not spoken to bank officials or their representatives about trying to persuade Mr. Schneiderman to get on board with the deal.

Remember HAMP? Right. They just want to help.