Tag: Martha Coakley

Another slap on the wrist by the government for the banks that caused the housing bubble and the crash that sank the economy world wide with unregulated derivatives and credit default swaps:

The Department of Justice has announced a $335 million settlement with Countrywide, the former subprime mortgage giant now subsumed into Bank of America, on claims of housing discrimination.

   The Justice Department on Wednesday announced the largest residential fair-lending settlement in history, saying that Bank of America had agreed to pay $335 million to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers during the housing boom.

   A department investigation concluded that Countrywide had charged higher fees and rates to more than 200,000 minority borrowers across the country than to white borrowers who posed the same credit risk. It also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received prime loans, the department said.

   The pattern and practice covered the years 2004 to 2008, before Countrywide was acquired by Bank of America.

   “The department’s actions against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation’s largest, for discrimination,” Attorney General Eric H. Holder Jr. said. “These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin.”

I’m waiting for someone to hold financial institutions accountable for discrimination against every one of its customers, by defrauding them and destroying the residential home mortgage market. That’s obviously not going to happen here.[..]

Here’s the settlement agreement, and once again you see that Countrywide doesn’t have to admit wrongdoing for their crimes.

But the Department of Justice and the Securities and Exchange Commission will enthusiastically pursue the one agency that didn’t cause the crash but just inherited it, at tax payers expense:

The walls have closed in over the past couple weeks on mortgage giants Fannie Mae and Freddie Mac. The SEC charged former CEOs and executives at the companies with fraud. California Attorney General Kamala Harris sued them for imformation (sic)in a wide-ranging fraud investigation. And now we learn that the FBI is investigating them[..]

If Fannie and Freddie are guilty of misleading investors, they deserve to pay the penalty. And yet, I do sense more enthusiasm to go after these government sponsored enterprises than to go after the private banking firms which were far more responsible for subprime. This feeds a false narrative that government somehow caused the financial crisis by forcing lending to poor people. Fannie and Freddie followed the market in subprime and did not originate it.

The two of the lady state attorney generals took the stage on the talk shows discussing their actions to protect their constituents from the thousands of illegal foreclosures that are crushing their states economies. Massachusetts AG Martha Coakley joined Dylan Ratigan for a lively chat about her lawsuit against five major banks and MERS. Later, AG Kamala Harris explained to Lawrence O’Donnell on “The Last Word” her reasons for breaking from the not-50 State Agreement being brokered by the Obama administration.

The ladies are really on a roll. Just this week it was announced that Ms. Harris has teamed up with Nevada’s State Attorney General, Catherine Cortez Masto, to look into a wide array of abuses, including mishandled documents, shoddy loan servicing, and the questionable ways in which mortgages were bundled and sold to investors. Like New York’s AG Eric Schneiderman and AG Beau Biden of Delaware, the ladies see strength in numbers.

This is the hard work protecting consumers that the Obama administration refuses to do.  

Massachusetts Attorney General Martha Coakley filed a law suit against five major banks and MERSover deceptive mortgage practices. One of those entities, GMAC, the mortgage lender of Ally Financial Inc., decided to stop mortgage lending in Massachusetts. The nation’s fifth-largest mortgage originator said it “has taken this action because recent developments have led mortgage lending in Massachusetts to no longer be viable,”. Seriously, they are not going to play in the state because Martha wants them to play by the rules. How dare she!

Yves Smith at naked capitalism says that in essence GMAC Mugs Massachusetts for Insisting on the Rule of Law, Suspends Mortgage Lending in the State

This move by GMAC, now Ally, is remarkably brazen. GMAC has effectively said that Massachusetts must hew to its demands of how to deal with foreclosures. It announced it is withdrawing from mortgage lending in the state in an effort to bring it to heel. [..]

GMAC is trying to get other big banks to follow suit. I hope the state and other groups that do substantial financial business with banks (largish churches are also attractive clients) make it clear than any effort to punish the state for enforcing the law will be met by moving their accounts to smaller institutions that respect the law. [..]

Sorry, for the first decade plus of the private mortgage securitization business, banks and servicers did hew to the requirements of state law. It was only in the late 1990s through 2004 or so that they started to fail to comply with the requirements of their own contracts (the breakdown appears to have taken place over time, with the biggest decay taking place during the 2002-2003 refi boom). That’s what has put their foreclosures on shaky footing, which in turn has led to wideranging legal abuses to get around the mess they created.

The insolence of the securitization industry continues to be astonishing. They act as if they have an imperial right to dictate to governments, and refuse to admit any role in a disaster of their own creation. I hope those of you who do business with Ally close your accounts immediately and tell the bank that it is due to their Mafia style move in Massachusetts.

If you’re a GMAC customer in Massachusetts, it’s time to move your loan.  

Another state attorney general is suing five major banks and Mortgage Electronic Registration System Inc. and its parent company over deceptive foreclosure practices. Massachusetts Attorney General Martha Coakley  filed the suit on Wednesday seeking redress from Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and Ally Financial.

Ms. Coakley joins a small group of state attorney generals from larger states that have been hit the hardest by the foreclosure/mortgage fraud scandal:

Ms. Coakley, whose reputation was tarnished after her loss to a Republican for the late Ted Kennedy’s senate seat, has been strong on tightening state regulations and force banks to assist financially stressed homeowners save their homes:

Coakley spoke in support of legislation she filed in January with state Senator Karen Spilka, an Ashland Democrat, and Representative Steven M. Walsh, a Lynn Democrat. The proposed law, which they call An Act to Prevent Unlawful and Unnecessary Foreclosures, focuses on mortgage loans that are considered to be risky, including those with interest-only payment and adjustable rates.

The bill would require lenders to analyze a borrower’s financial information to determine whether modifying the loan to a more affordable payment would be more beneficial financially to the lender than going through the lengthy and costly process of taking the property through foreclosure. Many lenders already undertake such a study before deciding whether to foreclose, but the bill would permit homeowners to file a lawsuit if the process does not occur, according to Coakley’s staff.

The proposed law also would force lenders to prove they are the legal owner of mortgages before foreclosing, incorporating the findings of recent foreclosure-related decisions from the state’s Supreme Judicial Court.

These five state attorney generals are doing the hard work that should be done by the US Attorney General Eric Holder. Instead Mr. Holder is still clinging to Iowa AG Tom Miller’s stalled negotiations with the banks to settle the fraud for a mere $25 billion and exoneration from criminal prosecution. Mr. Holder has made protecting banks and corporations his priority and just recently announced a new initiative to prosecute intellectual property rights thefts by the public. This is not what Americans elected this administration to do.