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The Saga continues ... in neighborhoods and courtrooms, near and far to yours ...


Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal
by Gretchen Morgenson, NYTimes.com -- August 21, 2011

[...]
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.
[...]

“Eric and I agree on a tremendous amount here,” Mr. Donovan said. “The disagreement is around whether we should wait to settle and resolve the issues around the servicing practices for him — and potentially other A.G.’s and other federal agencies — to complete investigations on the securitization side. He might argue that he has more leverage that way, but our view is we have the immediate opportunity to help a huge number of borrowers to stay in their homes, to help their neighborhoods and the housing market.”

And Alisa Finelli, a spokeswoman for the Justice Department. said: “The Justice Department, along with our federal agency partners and state attorneys general, are committed to achieving a resolution that will hold servicers accountable for the harm they have done consumers and bring billions of dollars of relief to struggling homeowners — and bring relief swiftly because homeowners continue to suffer more each day that these issues are not resolved.”





New York Spars in Foreclosure Talks
Attorney General Schneiderman Opposes Other States, Obama Administration Over Banks' Liability
by Ruth Simon and Nick Timraos, WSJ.com -- August 25, 2011

[...]
State and federal officials fear Mr. Schneiderman's effort to merge investor and borrower claims would complicate and further delay any resolution of their investigation, launched last fall amid reports of "robo-signing"—where employees were approving legal documents without properly reviewing them—and other mortgage-servicing irregularities. U.S. officials say it would also push the price tag far beyond the $20 billion to $25 billion that the administration and attorneys general have set as their target.

"We are very far down the road for a settlement that will create servicing standards and will also result in a significant financial contribution towards helping homeowners and the housing market more generally," an administration official said.

One major source of disagreement is whether a settlement would impede Mr. Schneiderman's efforts. Even with an agreement, Mr. Schneiderman "can proceed with what he wants to do," the official added. "There shouldn't be a conflict here." But the spokesman for Mr. Schneiderman said the release language proposed by state officials "would unequivocally preclude Attorney General Schneiderman and other state prosecutors from following the facts where they lead."

Adding investor claims could delay a settlement by as much as two years, said one state official involved in the negotiations. "We think, quite frankly, it's a terrible idea," he said. "This multistate [effort] is about robo-signing. It's about servicing. We're interested in helping homeowners and preventing foreclosures. We're not interested in helping hedge funds or other private investors recover their losses."



It’s a Flawed Settlement
Editorial, NYTimes.com -- August 22, 2011

[...]
The deal has been in the works for nearly a year, after the state attorneys general announced an investigation into a robo-signing scandal in which banks were found to have filed false foreclosure papers in state courts. It was widely believed that the scandal would lead to a broad inquiry into how banks inflated the housing bubble, profiting as it expanded.
[...]

Shaun Donovan, the secretary of Housing and Urban Development, however, says that a settlement on the narrow issue of robo-signing would not preclude other investigations by individual attorneys general. But, clearly, once the robo-signing issue is off the table, investigators would lose leverage to pursue remedies for other possible illegalities in the packaging, marketing and transferring of mortgage securities.

The administration also says that the proposed settlement would require the banks to write down the principal balance on underwater loans. According to news reports, the banks are likely to pay around $20 billion in the deal. With 14.6 million homeowners owing $753 billion more on their mortgages than their homes are worth, how far does the administration think $20 billion would go?



NY Attorney General Schneiderman Pressured Not to Hold-Up Bank Settlement
by Bob Hennelly, WNYC News Blog, wnyc.org -- August 23, 2011

[...]
In an interview with WNYC last month, Housing and Urban Development Secretary Shaun Donovan said it was a priority of the Obama administration to use the national settlement with the banks as a way of winning relief for stressed homeowners.

“That is clearly part of the discussion in the settlement we have been negotiating,” Donovan said.

Donovan said cutting a deal with the banks that would mean real home owner assistance “was a critical step in helping strengthen the housing market so that we can see a sustained recovery.”

In the immediate aftermath of the collapse, the federal government’s emphasis was on re-capitalizing the nation’s banks — not on any forensic examination of the mortgage industry that was at the center of the meltdown.

Former Governor and Attorney General Eliot Spitzer said now was not the time to take any pressure off the banks and that Schneiderman should press on with his probe.



Under fire, N.Y. AG wins plaudits in mortgage probe
Andrew Longstreth, Reuters, BaltimoreSun.com -- August 25, 2011

[...]
On Tuesday, Iowa Attorney General Tom Miller announced the removal of Schneiderman from the committee of state officials that has been working with federal agencies to address "robosigning" and other shortcuts that banks took in their haste to remove borrowers from their homes.

The states and the departments of Justice and Housing and Urban Development have been negotiating for months with Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial.

Miller said Schneiderman "actively worked to undermine" the state coalition. The New York Times has reported that federal officials pressured Schneiderman to drop his opposition.

The New York attorney general, a Democrat, has objected to any agreement that gives banks a broad release from claims by investors who bought securities backed by home loans that soured.

A spokesperson for Schneiderman said he is "committed to a comprehensive resolution that will provide homeowners meaningful relief to stay in their homes, allow the housing market to begin to recover, and get our economy moving again."


(Reuters, Aug 25, 2011) - The New York attorney general's booting from a panel of state officials negotiating a settlement of mortgage abuses may shore up his political base and enforcement agenda.

MORE SUPPORT

On Wednesday, a day after Miller announced his removal, Schneiderman won support for his stance from a variety of national and state organizations, including the National Association for the Advancement of Colored People [NAACP], and the American Federation of Labor-Congress of Industrial Organizations [AFL-CIO].

In a letter to government officials leading the mortgage investigation, including Miller, they said the group should not be pressured into a deal that does not adequately address the harm done.

"We understand that industry is pressuring to limit relief and for overly broad releases; they must not be allowed to succeed," they said. "To the extent that institutions or individuals committed illegal acts, there have to be consequences for breaking the law that are in proportion to the seriousness of the violations."





Living in a Tent, is not so bad (I've done it before).

You almost always, have a nice breeze, to keep you company ... Lot's of Crickets too ...  

a lot like Congress that way.



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Comment Preferences

  •  jamess, this really sums up this new con-job: (12+ / 0-)
    With 14.6 million homeowners owing $753 billion more on their mortgages than their homes are worth, how far does the administration think $20 billion would go?

    Thanks for bringing us right up to date on this most important matter.

  •  This proposed settlement is a drop (4+ / 0-)
    Recommended by:
    jamess, Badabing, DaleA, nicolemm

    in the bucket compared to what pension plans and other funds in which the public was invested lost.  

    I wish I could remember where I read it.  Perhaps one of your diaries, jamess?  The state of Florida pension plan lost $62 billion in 2008 alone.  Much of that loss was tied to these toxic mortgage backed securities.

    And now they want to settle everything for $20 billion?  I hope Eric Schneiderman can hold to his course and prosecute these mobsters to the fullest extent possible.

    The United States is not just losing its capacity to do great things. It's losing its soul.--Bob Herbert. gulfgal98's corollary- Our soul is gone.

    by gulfgal98 on Sat Aug 27, 2011 at 01:59:46 PM PDT

    •  Also it is criminal (5+ / 0-)
      Recommended by:
      Badabing, DaleA, CJnyc, Nada Lemming, Tam in CA

      what the Obama administration is doing here.  They are aiding and abetting a criminal operation by refusing to investigate, prosecute, and re-regulate the banking mafia.

      The United States is not just losing its capacity to do great things. It's losing its soul.--Bob Herbert. gulfgal98's corollary- Our soul is gone.

      by gulfgal98 on Sat Aug 27, 2011 at 02:05:26 PM PDT

      [ Parent ]

      •  I think that yet to be proven ... (3+ / 0-)
        Recommended by:
        gulfgal98, Badabing, DaleA


        but with the recent revelations of the SEC

        destroying Wall Street Investigative evidence,

        going back several years

        -- complicity may not be too far a stretch.


        OR they may simply trying to Kick-start the Economy,

        NOT fully realizing the implications of their immunity-granting to the Banks

        (???)


        Either way following and upholding the Law,

        is usually the Best Policy in the long run.

        If were are to truly remain a democratic republic,

        of, by, and for the People.


        What is necessary to change a person is to change his awareness of himself.
        -- Maslow ...... my list.

        by jamess on Sat Aug 27, 2011 at 02:18:28 PM PDT

        [ Parent ]

        •  jamess, both you and I (4+ / 0-)
          Recommended by:
          Badabing, jamess, DaleA, Nada Lemming

          worked for various govts.  We know that failure to uphold the laws is wrong, no matter what the excuse.  If the laws are not being enforced, then in effect, they are rendered worthless.

          Senator Carl Levin's report which was a bipartisan report, called for the Justice Department to investigate Goldman Sachs and whether Lloyd Blankfein perjured himself to Congress in testimony.  One of the charges was that Goldman Sachs participated in knowingly misleading clients by

          peddling collateralized debt obligations backed by risky loans that the banks’ own traders believed were likely to lose value.

          The United States is not just losing its capacity to do great things. It's losing its soul.--Bob Herbert. gulfgal98's corollary- Our soul is gone.

          by gulfgal98 on Sat Aug 27, 2011 at 02:52:45 PM PDT

          [ Parent ]

          •  Most Govt workers (1+ / 0-)
            Recommended by:
            gulfgal98

            take their job, and the importance of the work very seriously.

            I know I do.  We have a Mission to uphold.


            And the thanks we get,

            Pay Freezes, and staffs cut in half,

            by the Cost Cutters running the show.


            When my layoff kicks in, (Oct 2012)

            think I'll go back to the Corporate World,

            at least there, you know where stand,

            and what the mission objectives are,

            year in, and year out.


            What is necessary to change a person is to change his awareness of himself.
            -- Maslow ...... my list.

            by jamess on Sat Aug 27, 2011 at 03:09:58 PM PDT

            [ Parent ]

    •  thanks for putting that into some perspective (3+ / 0-)
      Recommended by:
      gulfgal98, Badabing, DaleA

      a 20B  fine/damages/settlement

      vs

      1 state Pension Plan losses from Toxic Assets of 65B


      No wonder they want to sweep this all under the Poor People rug.


      They must think, "that we're stupid"

      that some how we'll all blithely forget

      that our current Economic Crash-Recession-Bailout,

      had anything to do with these Mortgage Pirates,

      and their Scheming Bandit ways   ...


      SOOOO  Long ago -- BAAAACK about 3 to 5 years.

      (aka Ancient History)


      They must think, "that we're stupid"


      thx gulfgal98,


      What is necessary to change a person is to change his awareness of himself.
      -- Maslow ...... my list.

      by jamess on Sat Aug 27, 2011 at 02:09:39 PM PDT

      [ Parent ]

      •  That is just one example of how bad (3+ / 0-)
        Recommended by:
        Badabing, jamess, DaleA

        this proposed settlement is.  What was going on was misleading fund managers as to the worth of these MBS's when they knew they were toxic. These banks were hedging against the very securities that they were marketing.  Add to that all the recording fees that were never paid, and you have tax evasion.  IMO, this is racketeering and nothing has been done to prevent it from happening in the future.

        The United States is not just losing its capacity to do great things. It's losing its soul.--Bob Herbert. gulfgal98's corollary- Our soul is gone.

        by gulfgal98 on Sat Aug 27, 2011 at 02:57:27 PM PDT

        [ Parent ]

        •  They should have been called (1+ / 0-)
          Recommended by:
          gulfgal98


          Scammers-R-us!


          BoA private email archive thrown open in $11bn AIG lawsuit
          Leo King, Computerworld UK -- 08/10/2011

          [...]
          After trawling through hoards of emails sent by Countrywide executives, AIG’s lawsuit details some damaging comments made ahead of the subprime mortgage lender’s collapse, allegedly showing Countrywide executives were aware that the company was providing loans to consumers who could not repay them and misrepresenting the risk level to the companies they were selling the loans onto.

          Countrywide chief executive and co-founder Angelo Mozilo wrote in emails to senior colleagues before the firm’s collapse that he was concerned the company’s subprime loan products weretoxic”, “poison,” and “the most dangerous ... in existence”, and that by selling them the company was facing “catastrophe”. Nevertheless, Countrywide sold billions of dollars worth of the products.

          Bank of America rejects the allegations and has said that AIG was a “seasoned” investor that was able to make its own sensible judgement.


          AIG cries 'Toxic Foul' by BofA;  Meanwhile SEC 'tidies up' the Possible Evidence -- by jamess -- Aug 26, 2011


          What is necessary to change a person is to change his awareness of himself.
          -- Maslow ...... my list.

          by jamess on Sat Aug 27, 2011 at 03:14:23 PM PDT

          [ Parent ]

          •  Mozillo should be in prison (0+ / 0-)

            but he is not.  He is a prime example of why our current political system is not working.

            The United States is not just losing its capacity to do great things. It's losing its soul.--Bob Herbert. gulfgal98's corollary- Our soul is gone.

            by gulfgal98 on Sat Aug 27, 2011 at 03:52:51 PM PDT

            [ Parent ]

            •  It was a difficult legal case, actually. (1+ / 0-)
              Recommended by:
              DaleA
              James D. Cox, professor of corporate and securities law at Duke University, said the settlement was on the high end for an individual corporate officer. “We’re used to seeing $100 million settlements when it’s against Goldman Sachs or after-hours trading of mutual funds,” he said, “but we don’t usually see eight-figure settlements with individuals.”

              The settlement was also good for the government, Mr. Cox said. “This is not a slam dunk; it’s a risky case and it’s got a lot of complexities to it.”

              ...
              Both the defense and the prosecution faced big risks if they lost at trial, legal experts said, and this may have led them to reach a settlement.

              http://www.nytimes.com/...

              It would have been politically expedient just to ignore legal niceties and throw the guy away, but it looks like the rule of law prevailed over politics in this case. Good for the SEC.

              "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

              by randomfacts on Sat Aug 27, 2011 at 04:03:39 PM PDT

              [ Parent ]

  •  Thank you for this (6+ / 0-)

    I want to keep it short and sweet:  Until and unless the largest banks that empowered and pushed these scams are hit with a capital penalty (loss of their capital, dissolution into a genuine homeowner's bank) and the criminals get a trial and long sentences to burn the financial world with a scar that will discourage fraud for a generation, we will not see any improvement or recovery.  No more phoney "prosecution agreements with fines and no admissions of wrongdoings( in lieu of charges and convictions the self help policing for insiders).

    It will get worse, much worse.  link to extended post:http://www.dailykos.com/...

    I am on board with Spitzer and Schneiderman and the effort to investigate, sanction and inflict the stiffest penalties that are the ONLY way to get the financial mess cleaned up in America.

    anything less is a waste of money and effort.  Some banks have to be closed and folded into a responsible and ethical institution. Angelo Mozzilo or Jamie Dimon isn't it.

    Start with the SEC corruption protecting Madoff and allowing rating agencies to fake the evidence for those MBS.

    Chris Cox, Madoff's son in law, many others need a jail.
    Then on to the big five banks and their partners and co conspirators.

    There is room for nearly a thousand of them in Illinois, the one Durbin couldn't fill from Gitmo!

  •  The banks don't have $753 billion (0+ / 0-)

    I think that's rather the point. BoA is on life support as it is. Schneiderman can sue for $100 trillion if he wants, but he isn't going to get it because it isn't there.

    "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

    by randomfacts on Sat Aug 27, 2011 at 03:58:07 PM PDT

  •  Shorter WSJ (3+ / 0-)
    Recommended by:
    jamess, Nada Lemming, gulfgal98
    State and federal officials fear Mr. Schneiderman's effort to merge investor and borrower claims would complicate and further delay any resolution of their investigation
    State and federal officials fear Mr. Schneiderman's effort to do his job and find massive and organized criminal behavior.
    •  funny (1+ / 0-)
      Recommended by:
      CJnyc

      that's what I was thinking too,

      when I read that excuse.

      thx CJnyc


      What is necessary to change a person is to change his awareness of himself.
      -- Maslow ...... my list.

      by jamess on Sat Aug 27, 2011 at 04:40:05 PM PDT

      [ Parent ]

    •  Correction: Or, What the WSJ left out: (0+ / 0-)

      State and federal officials fear Mr. Schneiderman's effort to merge investor and borrower claims would complicate and further delay any resolution of their investigation
      coverup and effort to immunize the banks and officers against a wave of lawsuits and fines that would effectively force them out of business or into a Federal restructuring much like the auto companies earlier in this administration.

      Mr Obama and Mr Holder have decided that leaving the banks intact and in charge of the mortgage problem resolution efforts with a token effort to pacify unhappy mortgage holders in non judicial foreclosure states might avoid a dramatic step  to fix the mess.  Such a step  might be used as  a political controversy against the President in the 2012 election.

      Of course, we know the WSJ is lying. There are no investigations, only a  WH/DOJ (on behalf of the banks)50 state  negotiation as to the price of dropping all claims against the banks destroying the  civil claims and liabilities of banks to both bondholders and mortgagees claiming various forms of fraud or deception.

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