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Sometimes, once in a blue moon, there comes a time when important events unfold that I then must trust my own judgment. And in doing so, I also sometimes have to part ways with people I admire. It doesn't feel good to do so, but I think NY AG Eric Schneiderman is possibly making a mistake, and I very much agree with David Dayen’s take on these events.

Taibbi has kind of bought the argument that the robo-signing was a smaller part of a bigger fraud in the securitization markets, which is true. That doesn’t mean that a settlement that allows you to go after that poisoned tree by only giving up the fruit is in any way equitable. That’s the point of California Rep. George Miller, a key ally to Nancy Pelosi:
Democratic Congressman George Miller of the East San Francisco Bay area says he’s “proud” of Harris for leaving negotiations that aren’t in the state’s best interest. And he says any agreement has to be transparent.

“Whatever settlement they have has to go out to the public for a week, for a period of time, where it can be commented on,” Miller said, “because this represents the largest decisions about people’s homes, their equity, their assets and their worth.”

(BTW it doesn’t matter which poster in the wilderness screams, “NOUN, VERB, AND FDL FOREVER!” David Dayen is widely read, widely circulated by most reputable outlets, and is highly citable as is his research, regardless. It’s just basic common sense that not all bloggers on the FP of a site like FDL are monolithic. They are also not monolithic here at Daily Kos so just keep that in mind)

The latest proposed paltry 25 billion dollar settlement for foreclosure fraud on the table — even with a host of other things that can be pursued while ridding liability only for foreclosure fraud under these terms — still leaves very much to be desired considering the 700 billion that borrowers owe which is more than their deflating assets(their homes) can cover.

If this administration understood the problem of debt deflation or studied their Irving Fischer before the State of the Union, they might have made more of a real effort for a better settlement. After all, private debt overhang is the problem, not the government debt they prattle on about sounding like every Republican running.

You see, when consumers are indebted they actually don't spend money in our economy and aggregate demand suffers. That needs to be taken into account when this deal is lauded by this President whom then falsely promises substantial job creation, afterwards. 25 billion will get soaked up pretty fast in that hole of negative equity, especially considering legal fees and everything else the victims of this fraud are subjected to.

It just gets worse from there.

Q: How much principal reduction are we talking about, and to how many borrowers?

A: Housing and Urban Development Secretary Shaun Donovan said in a recent speech that it could be 1 million borrowers. Numerous news accounts have said principal reductions would average $20,000.

But 1 million could be a high number, and $20,000 is likely to be low. The average underwater homeowner owes about $50,000 more than their home is worth, says economist Mark Zandi of Moody's Analytics.

snip

Q: Will the principal reduction be a big boost to the housing market?

A: Probably not, says Capital Economics economist Paul Diggle. Borrowers collectively owe $700 billion more on their mortgages than their homes are worth. The principal forgiveness is "not going to be enough to generate a significant and sustained housing market recovery," Diggle says.

snip

Q: How tough are the potential settlement terms on the banks?

A: Not very, says Paul Miller, banking analyst at FBR Capital Markets. The banks will largely be modifying loans they own themselves and some they service for investor owners. By modifying loans, the banks may reduce their future default rates.

"The loan modifications would be something the banks probably would've done on their own anyway," Miller says.

Rheingold says any settlement will seem inadequate against the trillions in lost equity that resulted from the unprecedented collapse in home prices. He says that the state attorneys general — who started this process — were "filling a void left by the Obama administration's failure to adequately address the crisis."

That’s not a whole lot to write home about given the scope of this problem. Why? In addition to the answers provided above, there are the poisonous incentives to defraud all of us again plus the moral hazard created from no real accountability for criminal behavior.

This is because of the false sense that any steps whatsoever were taken to solve the foreclosure and overall mortgage fraud problem. Foreclosure fraud is part of the whole securitization process that's completely broken anyway with no defined standards really. Foreclosure fraud stems from the original abuses(notes not put into the trust and/or lost) from the initial mortgage fraud tree that was securitized, bet on with our FDIC insured bank deposits as collateral thus bringing down the whole economy. How are we are supposed to take heart that this(the foreclosure fraud aspect settled here) is technically off the table?

I'm not that optimistic about any future possibilities of pursuing criminal charges against these criminal institutions even if the possibility may technically exist. This Justice department has waited too long, and it's going to take more than a few civil subpoenas to prove it to me. I also predict NY AG Eric Schneiderman could walk, because I don’t think things are going to go his way given the makeup of this task force which will undoubtedly work to undermine everything he is doing. After all US AG Eric Holder and Lanny Bruer are linked to representing some of these same banks that dabbled in foreclosure fraud in the past. That probably explains some of the hesitance to prosecute any top level officials whatsoever in this crisis.

I somewhat understand Eric Schneiderman’s reasons for joining this task force, and though I’m sure he will be able have more resources to use the Martin Act in order to pursue some violations that servicers have wrought more strongly in NY, I respectfully disagree with these terms and the damage in accepting them. The Martin Act is a NY statute and we have to think about the entire country and those states hit hardest by this fraud and the recession it exploded into.

NV AG Catherine Cortez Masto is my favorite Justice Democrat. Even though I do appreciate everything NY AG Eric Schneiderman and DE AG Beau Biden have done, she has done all the heavy lifting. Especially when it comes to the only way anyone is going to make sure banks and the mortgage brokers they do business with don’t do this again. NV AG Masto is following former NY AG Elliot Spitzer’s prescription for real Justice via pursuing criminal indictments and prosecutions.

h/t Abigail Caplovitz Field whom is an excellent resource on all of this.

Dear AG Masto: Thank You for Your Courage, Leadership & Common Sense

Thank you for your courage, leadership and common sense. To date, no other law enforcer has been willing to act on the obvious: the banks’ document fraud is criminal. Despite the crime-minimizing connotations of the term “robo-signing”, of course it’s criminal to forge signatures and lie about notarizing them when creating official public records. The fact that the records start the brutally swift non-judicial foreclosure process only makes the crime worse.

Although Attorney General Bill Schuette (R-MI) launched a criminal probe into robosigning several months ago, no indictment has yet followed, and his spokeswoman Joy Yearout would not comment on the status of that investigation or on your indictment. Similarly, Attorneys General Eric Schneiderman and Beau Biden are investigating possible crimes, but no indictments have yet come. You are truly leading the way.

Snip

Your indictment is striking for at least two reasons. First, by bringing charges related to 202 different documents, you’re showing the scale of the problem. Second, by prosecuting the managers of the document fraud, your response has been the most serious to date.

In Maryland notaries were forced to take The Fifth in response to a robosigning investigation, but we’ve not seen charges against those directing their activities yet. While it’s appropriate to prosecute the small fry, it’s also relatively meaningless and just reinforces what so many people know: our criminal system generally prosecutes the 99%, not the top dogs.

You may deny these absolute facts or care about the Presidential election more, but given that NV AG Masto is from the state with the worst housing market; if you don’t live in NV or any of the states most hit by the housing bust, you have the privilege of not having to worry about foreclosures and these abuses. It must be nice not to have to worry about the highly important and yet unanswered questions she asks of this rushed settlement because it doesn't affect you.

If so, just be glad you don’t live in NV, and at least have the decency to respect her heroic work and the facts. Masto cares about the people in NV and is not willing to let them get burned again like with the last settlement these banks didn't live up to. She'll keep fighting despite any rosy rhetoric about this deal from an administration that pretends they're taking AG Masto's questions to heart but are not.

As Mortgage Settlement Deal Nears Feb. 3 Deadline, Nevada AG Raises Concerns

"What would happen if all of the state attorney general representatives had one view and the federal agencies disagreed?" Masto asked in her letter.

Snip

Nevada has been burned in the past by large, multistate mortgage settlements. In 2009 the state joined 10 others in agreeing to a settlement regarding fraudulent mortgage practices at Countrywide, the subprime lender that came to epitomize questionable lending during the housing boom. Bank of America, which now owns Countrywide, agreed to offer as much as $8.4 billion in loan modifications and foreclosure relief to 400,000 homeowners victimized by Countrywide's mortgage fraud. But as of June 30, just roughly $216 million in payments had been made through the program. In August 2011, a frustrated Masto asked a court to void the deal so that Nevada could go after the bank on its own.

snip

Some remain unconvinced. "Look at what happened with WorldCom ... Those guys were committing fraud at their own companies, and still they went to jail for what they did," said a prominent securities lawyer who wished to remain anonymous, referring to the fates of CEO Bernard Ebbers and other WorldCom executives. In comparison, "these financial shenanigans had an impact way beyond any one company, and these guys are still walking around free," the lawyer said. "There's just not been much effort to hold Wall Street or any of these other guys accountable."

snip

"I view this as nothing more than election-year grandstanding, an attempt by the [Obama] administration to look like it's doing something to help homeowners," said Melissa Huelsman, a private attorney who has represented homeowners for more than a decade.

I like an actual historical record of what happened and why. I like actual cause and effect reality instead of just hope on the scope of what’s wrong with these half-ass solutions to real crippling problems. You see, cause and effect reality is right there for you to read. Some hope to play up spin about how this administration couldn't do anything until now and can't go bigger because “it is too complicated.”

However, the very real problem in actual reality (as opposed to that dangerous fantasy) is that WorldCom was a real company like Long Term Capital Management — a company that speaks to failed derivatives reform in Dodd Frank as the "confident" financial sector panics while wondering their exposure to the Eurozone meltdown — WorldCom engaged in real control fraud similar to what many of these big banks committed. And yet, unlike them, CEO Bernard Ebbers and other WorldCom executives actually went to jail, and  did so even during the Bush administration.

To add insult to injury, what Bernard Ebbers did pales in comparison to what this cabal of Wall St Robber Baron CEOs did to the entire global economy. And yet these Robber Barons still walk around free to set the terms of each settlement by buying Congress or having lobbyists who work in the US Treasury and the US Justice Department in head positions sanctioned by our US President. After WorldCom and Enron went down, Sarbanes Oxley was passed so they would have to then sign off on what their balance sheets were from then on making them legally responsible for them and for all the damage that ensued from their fraudulent accounting practices and bets.

Many banks violated this in this crisis, but Citigroup especially; the place where the president’s good friend Robert Rubin worked till January 9, 2009 receiving more than $126 million in cash and stock during his tenure. A good way to tell if anything is to come at all from this settlement is if Citigroup CEO Vikram Pandit is prosecuted at all. I’m not holding my breath on that one.

Important update: the settlement date got extended to Feb 6th.

The deadline was changed as Oregon Attorney General John Kroger said today in a statement that he would sign on to the settlement, joining Connecticut Attorney General George Jepsen, who also supports it.

Delaware Attorney General Beau Biden has said he won’t sign on to the settlement.

What I find most significant is that Delaware Attorney General Beau Biden has said he won’t sign on to the settlement as of now either which is also good considering MERS is headquartered in DE.

As of now this is not Justice or a good precedent. It doesn't make me feel that criminal indictments or prosecutions are coming despite only having foreclosure fraud immunity and having other openings to pursue in this deal. We have seen how little of a priority it has been for the US Justice Department to pursue very much at all about these problems in a substantial way that matters.

It's worth taking a look at Question number 3 from Masto's letter.

3. The state release contains a provision that prevents the State AGs and banking regulators from seeking to invalidate past assignments or foreclosures. Does this prevent States from effectively challenging future foreclosure actions that are based on faulty prior assignments?

From early on, we have stressed that this is a cash for release deal, and this looks like a VERY big release. The banks will pay an amount into the fund, and all issues relating to robo-signing and foreclosure will be released by the AGs: the banks will have a state level release from all bad assignment/transfer issues.

Note this does not stop private parties, meaning individual borrowers, from suing on these very grounds. But taking the AGs out of the picture prevents them from using their subpoena and prosecutorial powers to determine how widespread these abuses are and to negotiate broad solutions.

Blast from the fraudulent past for the fraudulent future? Is that what winning the future really means? We're never the ones winning in this scenario sad to say.


(Animation by ©priceman)

NV AG Masto had to file complaints against all those institutions who signed onto the 2008 settlement for 8.4 billion. They didn't live up to that settlement. But somehow someway another flawed settlement is what we're looking forward to today as a big win against Wall Street? There's no real precedent for punishment regarding foreclosure fraud now or in the future. There's no real language barring fraudulent transfers (meaning no wet signature) from the past being used in the future to steal more homes as of yet.

So it looks like under this settlement these banks will still be able to use robosigning in the future given the robosigning immunity in this settlement. It's also a form of retroactive robosigning immunity from State AGs(with the most resources to go after this sort of thing) given what Yves Smith laid out above. They will have an incentive to keep up these practices given the lackluster penalty for doing so, and of course never any criminal charges, referrals, or prosecution from the US Justice Department of the big fish in charge.

The MERS empire will strike/sign back if this goes through.

So no, holding Wall St accountable for their crimes has not suddenly "gotten real." To pretend that it has just gives all the victims of the sub-prime mortgage crisis, the foreclosure crisis, and this great depression-like recession and its net jobless recovery, false hope. Rather than play up this false hope for election season, the least you could do is acknowledge how little accountability there has been and that any serious declaration on this front needs direct proof. Otherwise you are just playing off the emotions of real people suffering merely for your election year grandstanding. Personally, I find that immoral.

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Comment Preferences

  •  thanks p-man (35+ / 0-)

    d-day also had a good interview with Simon Johnson.

    ...it’s hard to explain to someone that $20 billion represents a pittance sum, even though in the grand scheme of the housing market, it truly is.

    SJ: Well, just compare it to profits. The banks made hundreds of billions of dollars during the boom phase by ripping people off. Any settlement of this type, you pay over time, over years. The tobacco settlement was structured this way, on an ongoing basis. So you have hundreds of billions made initially, and the $20 billion spread over time coming out of continued profits. I’m not suggesting that the settlement take a certain percentage of profits from the banks. I’m suggesting that you need to have an investigation of the damage caused, and why go small when you have such a strong case for fraud?

    •  And thank you for that SJ interview (15+ / 0-)

      He lays it down rather well. It is a pittance and there is such a strong case for fraud.

      Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin - I Illustrate #OWS protest T-shirts you can buy at priceman political prints

      by priceman on Thu Feb 02, 2012 at 07:59:36 AM PST

      [ Parent ]

    •  That is an easy question to answer (15+ / 0-)
      why go small when you have such a strong case for fraud?

      Because this administration and the one before it, and the Senate, and probably much of the House too, represent the banks, not the people.  

      And for those who would like to accuse me of conspiracy theory, I give you a sitting Senator, Dick Durbin:

      On April 27, 2009, in an interview with WJJG talk radio host Ray Hanania, Durbin accused banks of creating the financial crisis of 2007–2010. Durbin expressed a belief that many of the banks responsible for creating the crisis "own the place," referring to the power wielded by the banking lobby on Capitol Hill.[33]
      http://en.wikipedia.org/...

      And this is a bipartisan ownership.  Wall Street doesn't much care about parties.  They play both sides and hedge their political bets.

      •  As a former Prosecutor (15+ / 0-)

        I don't get what is going on here.  Fraud cases require specific intent, and they are not easy to prove.  

        But still, I am amazed a US Attorney hasn't gone after this.  Rudy Guiliani made a political career in part by going after the Drexel guys (I actually was part of the defense in that case).

        US Attorneys also have a fair amount of independence.  Guilini went after Milken when Reagan was President, for example.  I can't imagine that Justice is going to tell a US Attorney to stop an investigation, and if they did a politically ambitious US Attorney (and most of them are) would scream bloody murder.

        And. yet. not. one. indictment. of. Countrywide. To my knowledge not even a grand jury was set-up.

        Now when I read diaries I do think there is more than a little confusion going on.  Most of the fights are between the investors of the CDO's and the banks.  The people who bought the homes already got the money to buy the houses.  So the Court in Massachusetts noted in its robo signing case that the homeowners weren't harmed when they held that Banks had to present better evidence of title during a foreclosure hearing.

        If the banks can't show chain of title on their mortgage, they should be held accountable.  

        I know something about prosecuting cases.  I know something about security law.

        And I really don't get what has happened here.

        The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

        by fladem on Thu Feb 02, 2012 at 09:09:27 AM PST

        [ Parent ]

        •  Intent can be proven (4+ / 0-)

          quite easily by studying the actions that lead to the accusation of fraud.

          You can never "prove" what is in the mind of another, what you can do is look at what they did and draw reasonable conclusions.

          To paraphrase Meteor Blades:

          Don't tell me what you were thinking. Show me what you did, and I'll tell you what you were thinking!

          I hope that the quality of debate will improve,
          but I fear we will remain Democrats.

          by twigg on Thu Feb 02, 2012 at 09:21:41 AM PST

          [ Parent ]

          •  I don't think (2+ / 0-)
            Recommended by:
            Agathena, twigg

            that most prosecutors would say it can be proven "quite easily".

            You can do it - but easily not so much.

            The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

            by fladem on Thu Feb 02, 2012 at 11:35:56 AM PST

            [ Parent ]

            •  It must be different here (0+ / 0-)

              In my case, when there was clear evidence of fraud by one person, I was convicted of conspiracy because .... and this was the only evidence of a conspiracy that the prosecution offered ...

              "He must have known".

              I hope that the quality of debate will improve,
              but I fear we will remain Democrats.

              by twigg on Thu Feb 02, 2012 at 12:19:00 PM PST

              [ Parent ]

        •  Willam K. Black Spells It Out (11+ / 0-)

          http://www.neweconomicperspectives.org/...

          Elite financial institutions officers engaged in fraud face a dramatically reduced risk of prosecution compared to 20 years ago when financial fraud was far less common. TRAC reports that the number of financial institution fraud prosecutions under Obama is less than one-half the number 20 years ago. Bush (II) was slightly better than Obama in prosecuting non-elite financial institution frauds, but both were pathetically bad.

          Existence is no more than the precarious attainment of relevance in an intensely mobile flux of past, present, and future.~~~ Susan Sontag

          by frandor55 on Thu Feb 02, 2012 at 09:38:22 AM PST

          [ Parent ]

          •  That explanation (0+ / 0-)

            doesn't make sense to me when you consider the incentives of prosecutors.  You make you name by catching big fish (eg Guiliani). Prosecutors want to get their names in the papers.  Why would prosecutors at the state and local level stop prosecuting these crimes?

            Most of the people at DOJ are Civil Servants.  If there was a coordinate effort to squash prosecutions it would leak.  Hell, look at all the leaks in the Barry Bonds case.

            As I said, I don't get it.

            The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

            by fladem on Thu Feb 02, 2012 at 11:34:49 AM PST

            [ Parent ]

            •  The political incentive (5+ / 0-)
              Recommended by:
              PhilJD, priceman, JesseCW, frandor55, denise b

              for the AGs to take the deal is this, IMHO:  The whole meme will be that people are hurting, badly, and if the AG doesn't take the deal they will be accused of not taking sure money for their constituents and instead pursuing law suits that may or may not pay off and may take years to do so.  I think they were warned that this political pressure would laid on them heavily.

              Also, these cases are complicated.  Schneiderman claims that he has a lot better chance of making progress if he has both state and federal resources.  

              Also, the AGs might be convinced that they can still pursue cases in other areas and that they will be supported, so they can still make a name for themselves.

              My understanding is that serious prosecution would have taken down a lot of banks.

              I also wonder how many of the cases are already past the statutes of limitation.

              The big question is one you asked earlier -- why have there not already been big prosecutions?

              •  Kamala Harris already hearing that threat (1+ / 0-)
                Recommended by:
                JesseCW

                about 'keeping money from desperate Californians, after all, wouldn't you like 20K?'

                From those who live like leeches on the people's lives, We must take back our land again, America!...Langston Hughes

                by KenBee on Fri Feb 03, 2012 at 07:19:07 PM PST

                [ Parent ]

        •  I think we all know exactly what happened (1+ / 0-)
          Recommended by:
          priceman

          here, although some are in denial and others are afraid to speak.

          Fear is your only God.

          by JesseCW on Thu Feb 02, 2012 at 07:26:49 PM PST

          [ Parent ]

      •  It isn't a Conspiracy Theory (5+ / 0-)

        if it is true.

        Then it simply becomes a conspiracy .... and, in this reality based community ... there is plenty of evidence for what, under normal circumstances, would be an "extraordinary claim".

        I hope that the quality of debate will improve,
        but I fear we will remain Democrats.

        by twigg on Thu Feb 02, 2012 at 09:19:01 AM PST

        [ Parent ]

      •  Dayen has a new article out (7+ / 0-)

        Where he talks about the enforcement process, and this is what he relates:

        But get this, the initial measure of whether or not the banks are following the terms of the settlement will come from “internal quality control groups.” In other words, the foxes will guard the henhouse. The internal quality control groups will turn over quarterly reports (so abuses from January would theoretically not get discovered until April), and only at that point would the monitor be allowed to let a third party review the report if he finds improper implementation of them. But basically, this extends out the enforcement process by months and submits it to an initial gatekeeper run by the banks.
        (bold mine)

        http://news.firedoglake.com/...

        Are they, the administration, the banks, just laughing at us? Or does no one really give enough of a damn that this is allowed to happen?

  •  They should just print 10 trillion... (6+ / 0-)

    ...of new money and deal it out.  Or say a hundred grand apiece.

  •  There are so few journalists out there that are (23+ / 0-)

    willing to do the legwork to get to the truth. Anyone who arbitrarily dismisses Dayen because of a bias against FDL is missing out on a great resource.

    "Otherwise you are just playing off the emotions of real people suffering merely for your election year grandstanding. Personally, I find that immoral."

    I could not agree with that statement more! Well done Priceman!

    "pyromania is fun" You just can't make this shit up.

    by Ginger1 on Thu Feb 02, 2012 at 08:14:14 AM PST

  •  Thanks for the shout-out to Masto. (19+ / 0-)

    She gets it: only by "looking back" can we ever look forward in any productive way. Only criminal investigations and, if warranted, indictments can prevent a recurrence in a year or five.

    Fines, especially fines that leave individual bonuses intact, are mosquitoes pestering a tyrannosaurus.

    When you triangulate everything, you can't even roll downhill...

    by PhilJD on Thu Feb 02, 2012 at 08:16:17 AM PST

  •  Thanks for the info (9+ / 0-)

    The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

    by a2nite on Thu Feb 02, 2012 at 08:20:39 AM PST

  •  Good job. False hope is also something I've (11+ / 0-)

    railed about when talking about defense "cuts" also.  I suppose there's a fine line when it's an election season.  

  •  Accountability Is Required For 4 Years... (11+ / 0-)

    ...it can't just be hauled out in 1 of those 4 to get us motivated to GOTV.
    The Obama administration must match its words with corresponding actions.

    Existence is no more than the precarious attainment of relevance in an intensely mobile flux of past, present, and future.~~~ Susan Sontag

    by frandor55 on Thu Feb 02, 2012 at 08:28:59 AM PST

  •  just listening to great interview with dday (18+ / 0-)

    on this.

    on Sam Seder's show 1/25.

    Dayen said that we have actually had a financial fraud task force (something like that) for three years that no one even knows about because they have done so little.

    And he had good info on the Schneiderman commission - the other members appear conflicted at best on accountability for mortgage fraudsters.

    An ambulance can only go so fast - Neil Young

    by mightymouse on Thu Feb 02, 2012 at 08:31:40 AM PST

  •  Just to emphasize (22+ / 0-)

    something priceman talks about in the diary.  Going to Dayen (and Yves) again:

    Furthermore, in the one area where the settlement has been said to have improved, the terms of the liability release, as Yves Smith demonstrates, the letter from Nevada AG Catherine Cortez Masto about the settlement indicates that the release could be broader than recent reports suggest. Masto’s crucial Question #3 out of 38 says: “The State release contains a provision that prevents the State AGs and banking regulators from seeking to invalidate past assignments or foreclosures. Does this prevent States from effectively challenging future foreclosure actions that are based on faulty prior assignments?”

    That’s a key question. All of the fabricated mortgage assignments and associated documents used to foreclose are back-dated, so the banks can simply say that they are covered by the release. Meaning that the release could cover ONGOING foreclosure fraud. The foreclosure mills basically invent new, “found” documents all the time, so this is a real concern. Yves writes:  

     
    The banks will pay an amount into the fund, and all issues relating to robo-signing and foreclosure will be released by the AGs: the banks will have a state level release from all bad assignment/transfer issues.

     Note this does not stop private parties, meaning individual borrowers, from suing on these very grounds. But taking the AGs out of the picture prevents them from using their subpoena and prosecutorial powers to determine how widespread these abuses are and to negotiate broad solutions. So we’ll have the worst of all possible worlds: individual borrowers getting better and better at fighting foreclosures (or if you are a pro bank type, getting better and better at throwing sand in the gears) with the AGs sidelined in their ability to shed light on these issues and bring them to resolution on a broader basis. And given that the OCC has already entered into weak consent orders with the major servicers, and past servicing settlements have been violated, I remain skeptical that this deal will stop these abuses. Remember, bank executives piously swore in 2010 that they stopped robosigning, yet their firms continue to engage in that practice.

    http://news.firedoglake.com/...

    Some more things about this settlement:

    1) They are shoving this settlement through before the new task force has done one damned thing.  They probably haven't even set up their offices yet.

    2) This settlement is going to set the foreclosure mill into warp speed after having slowed down because they know it is fraudulent.  Falsified documents will still be falsified documents. It will still be fraudulent.

    3) The HAMP program is a joke -- a very sad and disastrous joke -- for homeowners.

    4) The average $20,000 to ease underwater mortgages won't help much.  People who want to sell to get out from under their mortgages and can't sell now because they are underwater probably will still be stuck in the same position. The banks will issue new mortgages and get out from under their fraudulent mortgages with no accountability and almost no penalties.  Who does this help?  The banks, not the homeowners.

    4) The compensation being proposed for people wronged is estimated to be about $1800.  People who were cheated and lost everything and $1800 is supposed to make them whole? That is an insult.  It is a travesty that the AGs would even consider it.

    5) The settlement is rigged to give California the bulk of the settlement money, probably for political reasons.  The other AGs are "flying blind" as Dayen put it. They don't know how much of the pittance that is left after CA gets the lion's share.  

  •  Catherine Cortez Masto & Beau Biden In 2016 (6+ / 0-)

    ...or vice a versa. These are the kind of Dems needed to hold the highest office in the land.

    Existence is no more than the precarious attainment of relevance in an intensely mobile flux of past, present, and future.~~~ Susan Sontag

    by frandor55 on Thu Feb 02, 2012 at 08:42:41 AM PST

  •  Commissions (9+ / 0-)

    Here is a question, why are Obama's commissions always stacked to veer to the right? Anyone?

    I didn't abandon the fight, I abandoned the Party that abandoned the fight...

    by Jazzenterprises on Thu Feb 02, 2012 at 08:42:54 AM PST

    •  Because they're the "experts" he is so devoted (7+ / 0-)

      to trusting.

      "Expertise" is inherently an establishmentarian credential; and thus reliance on experts (or technocracy) in economic matters will inevitably rely on those people most entrenched in the system. When the system is working, that may be smart - but when the system's regulation breaks down, it's not only letting the fox guard the henhouse, but consulting the fox on future henhouse security technologies and regulations.

      Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

      by Robobagpiper on Thu Feb 02, 2012 at 08:48:03 AM PST

      [ Parent ]

      •  O. compared the hiring of Geitner and Summers (2+ / 0-)
        Recommended by:
        priceman, Robobagpiper

        to FDR's hiring of Joseph Kennedy for the SEC in the Great Depression, hiring those who know most about the system to fix the system. But author Ron Suskind disagrees:

        To compare Geithner and Summers to Joe Kennedy is a reach. Kennedy was so instrumental for Roosevelt in setting up the SEC because he knew Wall Street from the inside as a master operator [...] There has been no one remotely like this in a position of real power under Obama - [...] a comparable figure, in equal measures expert and unencumbered is precisely what he has needed and lacked.

        from Confidence Men

        ❧To thine ownself be true

        by Agathena on Thu Feb 02, 2012 at 12:33:27 PM PST

        [ Parent ]

    •  So He Can Split The Difference.... (4+ / 0-)

      ...split the difference between centrists and righties and say "bipartisanship works"--the "split point" is what many in the GOP were hoping for in the beginning, so that just emboldens them to farther right-ward.

      Existence is no more than the precarious attainment of relevance in an intensely mobile flux of past, present, and future.~~~ Susan Sontag

      by frandor55 on Thu Feb 02, 2012 at 08:55:47 AM PST

      [ Parent ]

  •  This is a national tragedy (12+ / 0-)

    for homeowners and noting at all to celebrate. If the DOJ, the SEC and the IRS had been doing their jobs for the last three years and done the necessary investigations, we wouldn't be having this conversation. This new committee just looks like another sham in an election year and I don't give it 6 months.

    AS for the settlement, I hope that CA's AG Kamala Harris sticks to her decision to opt out of this amnesty for the banks and as it looks right now, Schneiderman is not signing it either.

    Thanks, priceman, this is a great summery of where this agreement stands right now and puts this new committee in perspective. It just looks like an election year stunt.

    "If it's a choice between a genuine Republican, & a Republican in Democratic clothing, the people will choose the genuine article, every time." ~ H.S. Truman
    TheStarsHollowGazette.com

    by TheMomCat on Thu Feb 02, 2012 at 09:16:56 AM PST

  •  thanks for this diary, priceman! (5+ / 0-)

    i'm concerned that schneiderman may have made a poor choice of bedfellows, and i hope that masto and some of the other state ag's will hold the line against a full-scale capitulation to the banking industry.  i am well and truly disgusted by the administrations bad handling of this.

    i'm part of the 99% - america's largest minority

    by joe shikspack on Thu Feb 02, 2012 at 09:22:03 AM PST

  •  whether it is right or not (0+ / 0-)

    the government doesn't undertake these investigations, suits and settlements for the primary purpose of making the consumer whole.   It is about deterrence of the behavior.   The question is "Is $25 billion enough to stop banks from fraudulently foreclosing", not "Is $25 billion enough to end debt overhang or keep people in their homes".

    Clearly the answer to the second question is hell no, the answer to the first question is probably not.  But conflating the policy points doesn't make the announcements of further investigations of the greater scam unwelcome.  It doesn't make Schneiderman a sell out or misguided.

    Fraudulent or ethical practices at the banks in the foreclosure processing, most people would still not be able to hold onto their homes.  Not all states have laws that make the 'show me the note' defense successful, and most states have laws that allow a lender to obtain documents to bolster their title that were missed earlier.  Laws tend to favor stability and aid creditors to collect on debts.  The settlement strategy is to still allow homeowners to pursue their individual claims.  So if a lender shows up to foreclose in a show me the note state, the borrower can still defend, if that reported aspect of the plan is accurate.

    •  There will be no deterrence of behavior... (1+ / 0-)
      Recommended by:
      denise b

      The economics of this whole ordeal are important even if you don't think they are.

      Both answers are a solid NO.

      Most states require that a note is kept on file. You don't have enough decisions by courts to make that excuse yet. Some courts have erroneously ruled in favor of MERS, but that doesn't really make a good point.

      I don't call enabling fraud stability. 50 state AGs tried to stop mortgage fraud led by Elliot Spitzer, but it wasn't state law that stopped them, it was a loophole used by Bush's OCC department so nope.

      That's a horrible anti-historical strategy and not what they claim the strategy is. Hiring a private lawyer to go after these cases is not cheap even if they are not paid until something is collected, if ever.

      This settlement is inadequate either way you look at it. No excuse about "wanting to make consumers whole again" this blaming the consumer for the fraud perpetuated is going to change what we heard in the State of the Union.

      It's a good thing we have state AGs like Masto that care about this sort of thing and has history, real history, and real knowledge of the law on her side. Criminal indictments and prosecutions are the only thing that is going to change behavior, unless one doesn't live in the real world.

      Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin - I Illustrate #OWS protest T-shirts you can buy at priceman political prints

      by priceman on Thu Feb 02, 2012 at 02:29:18 PM PST

      [ Parent ]

      •  my state ruled against (1+ / 0-)
        Recommended by:
        KenBee

        the where's the note argument way back.  If you can't prove payment, you can't even ask about the note, the court won't hear it.  

        I have real knowledge of the law too, been doing dirt law for thirty plus years,   it isn't as simple as most make out on the internet.   Some states have tougher laws than others.  Some have totally different theories about the nature of a mortgage,  ownership of the note, etc., and many of these rules are decades if not hundreds of years old and had nothing to do with the mortgage lending practices of the last few years.

        The laws with respect to mortgages are by and large state laws. They vary, they are complicated and no one size fits all solution is going to be acceptable.  

        The AGs vary in their commitment to prosecution.   Some know they won't get much out of their state courts so they may be inclined to take something as better than nothing.

        But I also know that the real harm was the securities abuses, no one would have created tons of junk mortgages except for the demand for new paper to securitize.  It is perfectly rational to separate the legal issues of needing to regulate the market on the securities, tighten underwriting standards and prevent the abuse, and try to make the banks/bankers pay part of the cost, from the foreclosure issues which really isn't at the heart of the fraud that has cost the US and world economies trillions of dollars.

        •  The same transfer issues apply regardless (1+ / 0-)
          Recommended by:
          KenBee

          I acknowledged that some states ruled against plaintiffs going after MERS for foreclosures given that mortgages and deeds of trusts are handled differently. however this copout doesn't have a very good record, because investors can still demand to see the note, even if state law bars tenants. I acknowledged a lot of states have different laws on what process is allowed, but most states either define a mortgage and what that entails and /or a deed of rust and what that entails. The record is pretty stark though and chain of title and transfers are connected to the subprime mortgage crisis whether you like it or not.

          We are all familiar with the securitization process. The steps, if not the process, is simple.

          A borrower goes to a mortgage lender. The lender finances the purchase of real estate. The borrower signs a note and mortgage or deed of trust. The original lender sells the note and assigns the mortgage to an entity that securitizes the note by combining the note with hundreds or thousands of similar obligation to create a package of mortgage backed securities, which are then sold to investors.

          There's plenty of case law by now that supports the where's the note campaign even though it's not a one size fits all thing on whether tenants can do anything about the foreclosure themselves or the AGs in that state. Regardless there was a 2008 settlements for 8.5 billion that was awarded based on these foreclosure issues(by a number of states AGs against Countrywide and others) that AG Masto has had to work towards making sure these servicers live up to it. that doesn't speak well for excusing this inadequate settlement as if the terms are going to be magically lived up to.  

          Also you seem to be unaware that securitization fail is a fail all around and that actually help banks commit securitization fraud by excusing foreclosure fraud as a separate issue. It's NOT. Not really.

          And any time a seller of securities–me in this story–lies to investors about something really important that destroys the value of the investment, it’s securities fraud. And what could be a more important, value-destroying lie than telling you (investors) that the Trust owns the loans when it doesn’t, because I didn’t keep my contractual promises?

          Beyond the securities fraud I’d be committing by failing to give the Trust good title, I’d also create a massive problem with foreclosing. To foreclose on a loan, the Trust has to have good title. But if I didn’t transfer ownership to the Trust, the Trust and Trustee don’t have the papers needed to prove ownership. I mean, you can’t prove you have something you don’t have. That’s what “proof” is all about.

          So what does a Trustee do if the Trust doesn’t have the documents needed to show clear title and foreclose, but the homeowner’s in default? Well, The Trustee (or someone working for it) has two choices: work out a deal with the homeowner, or commit fraud by fabricating the needed documents. Let’s pause a minute on the fabricating documents option, and notice just how attractive it is to the securities seller.

          Fabricating the documents needed to foreclose solves two problems for the securities seller, if it gets away with it. 1) The foreclosure goes through. 2) If the seller can foreclose freely and give the money to the investors, that takes the securitizaton-fail securities fraud risk off the table, at least as far as investors (as opposed to law enforcers) goes. That’s because for investors, lying while selling securities only matters if the lies caused harm, and if the trust can get away with foreclosing, where’s the harm?

          So foreclosure fraud minimizes the securities fraud liability.

          So your argument that because some servicers can get away with securities fraud by foreclosing in some states, that the transfer issue is somehow separate is rather unimpressive IMO and i would advise anyone to get a second opinion rather than listen to you whether on legal advice or a functioning financial system. The securities market is broken partly because of some attorneys excusing theft and fraud like you are doing.

          And this is so simple, even "someone on the Internet" can understand it, though there are plenty of legal opinions to back this up.

          Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin - I Illustrate #OWS protest T-shirts you can buy at priceman political prints

          by priceman on Fri Feb 03, 2012 at 11:12:29 AM PST

          [ Parent ]

          •  you have failed to understand (0+ / 0-)

            my argument.  I didn't not argue that there was no securities fraud or that the fraud would go away because of foreclosure.  The Fraud in the Act of creating and selling securities that were not what they were advertised to be or worse were specifically constructed to fail is not cured because the loan paid out and the investor didn't lose what could otherwise have been lost.   The fraud is independent of return on the investment.

            And your legal interpretation of the Georgia Supreme Court decision is flawed by the same failure to understand that there are two separate lines of actions that have a different basis in the law and different claims that can be made.  The types of claims, civil or criminal, simply are not the same.

            Robosigning, failure to own the note, etc. claims in the state courts and bankruptcy courts are related to state law real property issues, and those vary.   Some states allow straw holders, some states don't require any showing in courts, such as my state, that the bank owns anything to foreclose,  because there is no judicial foreclosure at all. Much of the robosigning is based on fraudulent court filings.  The MERS issues in the NYS suit just filed relates to fraudulent court filings as well as defrauding the tax collectors by non-payment of fees.   Those are not federal claims or covered by federal law.  So in each state, that law suit will be different.  Down here, you only have to file an assignment at the time of the foreclosure.  If the borrower doesn't file suit prior to the foreclosure, all claims are waived.   And the courts aren't consumer friendly, and hence, no success.

            As to investors and securities laws, there may be federal and state claims as to the fraud.  But that isn't part of the real estate laws.   And those claims exist irrespective of any failure to comply with assignments recording requirements or filing false court documents in foreclosure.  And investors don't necessarily have the right to the 'note', securities give one ownership in an interest in income not the property that produces the income.  One's GM stock doesn't give one the right to claim ownership directly of a factory or car.  But if the interest one is sold from the income in the note was misrepresented, that is securities fraud.

            •  1. I didn't conflate criminal and civil... (0+ / 0-)

              or reference a Georgia SCOTUS decision to do so. I argued for criminal indictments and prosecutions elsewhere referencing what Masto was doing in NV which is backed up by links.

              2. Foreclosure fraud limits the liability of the securities fraud is what I said and I also backed that up.

              3. What do you think a RMBS is?

              Note and Mortgage Transfers in Securitizations

              A residential mortgage securitization is a transaction that involves a series of transfers of two types of documents:  mortgage notes (the IOUs made by mortgage borrowers) and mortgages (the security instrument that says the lender may foreclose on the house if the borrower defaults on the note).   Ultimately, both the notes and mortgages need to be properly transferred to a trust that will pay for them by issuing securities (backed by the mortgages and notes, hence residential mortgage-backed securities or RMBS). If the notes and mortgages aren't properly transferred to the trust, then the securities that the trust issues aren't mortgage-backed and are worthless.

              So the critical issue here is whether the notes and mortgages were properly transferred to the securitization trusts.  To determine this, we need to figure out two things.  First, what is the proper method for transferring the notes and mortgages, and second, whether that method was followed. For this post, I'm going to focus solely on the notes. There are issues with the mortgages too, but that gets much, more complicated and doesn't directly connect with Kemp.

              There are numerous cases based on what I really said which just explained, but I am done now.

              An that's not a good analogy. When you invest in GM stock you are actually investing in GM the business model and what backs it. If a mortgage isn't transferred you're not really investing in a mortgage backed security, because then nothing is backing it when all is said and done.

              Since there are all these ongoing cases based on what I said, probably the safe bet for you is to not give out legal advice on this since you say they are totally separate.
               

              Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin - I Illustrate #OWS protest T-shirts you can buy at priceman political prints

              by priceman on Fri Feb 03, 2012 at 12:59:19 PM PST

              [ Parent ]

              •  again (0+ / 0-)

                Georgia's Supreme Court isn't SCOTUS.

                The trusts that hold the notes are the owners of the notes and mortgages.  In different states, what it takes to own the notes varies, but in many states, the notes have to be endorsed, in others they can be transferred by reference and some one may be custodian of the paper separate from the ownership.    The securities are issued by the trusts.  It is these trusts that have fraud issues and the brokers  who sold the issues.    The investors have claims if the collateral was misrepresented, ie, the trust doesn't really own the notes or because the security was misrepresented in some other way, but what exactly are the rights if the loan fails, etc differ in the various agreements, many had clauses where a new note can be substituted.  Not every note/mortgage is messed up, and many times the documentation errors mentioned in the press do not go to the  ownership of the note/mortgage.    The tranches offered do not have to involve changing the ownership of the notes,  the trust can hold the documents, and sell various securities that represent different income streams from the same documetndocuments.

                The homeowners have totally different claims, not based in the securities fraud, but what a creditor has to do to prove their ownership of the note before they are allowed to collect.   Collection is a private matter (securities fraud laws usually have public and private rights of action),  so generally the state doesn't step into it.   Much is bootstrapped on the foreclosure fraud because is involves sworn statements to courts in a state like New York.    

                Settling one type of case doesn't mean that anything is released in another type of case.  It also means that the 'fraud on the courts' or tax evasion type claims involve less money than the securities fraud as a matter of vindicating public rights.   People's individual claims for the harm done to them by wrongful foreclosure is another matter, again, my original point was that really wasn't what was being settled in the federal settlement, and the amounts being discussed would be woefully inadequate to settle personal claims related to foreclosure or securities fraud.

                •  I of course meant Georgia Supreme Court (0+ / 0-)

                  I just have a bad habit of typing SCOTUS, but everything else I said stands and we'll have to agree to disagree. I'm with Law professor Adam Letvin on this one.

                  Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin - I Illustrate #OWS protest T-shirts you can buy at priceman political prints

                  by priceman on Fri Feb 03, 2012 at 01:30:58 PM PST

                  [ Parent ]

                  •  II am underwhelmed by (1+ / 0-)
                    Recommended by:
                    KenBee

                    your appeal to authority.

                    I agree with this part of his statement:

                    The residential mortgage-related assets that the government is proposing to purchase in
                    the bailout plan are for the most part not mortgages themselves. Rather, the assets are mortgagebacked
                    securities (MBS). An MBS is a security issued by a trust (SPV) that has been specially
                    created for a securitization transaction. The SPV will purchase large pool of mortgages from a
                    financial institution. The SPV pays for the mortgages by issuing securities. These securities are
                    collateralized by the mortgages owned by the SPV, hence they are “mortgage-backed” securities.
                    These MBS are typically referred to as “certificates,” and most are debt securities that entitle the
                    holder to a series of regularly scheduled payments, as with a corporate bond.
                    By purchasing MBS, the government will not become the direct owner of the mortgages.
                    Instead, it will simply hold securities of an entity that owns mortgages. This is insufficient to
                    give the government the ability to modify the mortgages. Just as corporate bond holders have no
                    right to control the bond issuer’s management decisions, so too do MBS holders have no right to
                    control how the SPV’s management of the mortgages.

                    It sounds remarkably like my attempt to explain why the mortgages aren't the securities.

                    And again, I am not claiming that rights don't exist, I just don't think you truly understand the nature of the rights as well as you think you do, or the economic value of the rights, or why the foreclosure robo-signing frauds are the tip of the iceberg, not the meat of tohe problem or any other number of metaphors you may choose.  The roots of the problem lie with the securitization idea in and of itself, and the deliberately created (by financial interests working with Congress and regulators) lack of regulation in the area as well as the credit default swaps used to insure them.   That is where the existential risk to the domestic housing market and the world economy lies.  Not the after the fact individual results of all the inevitable foreclosures.  

                    As we speak, the financial genii are trying to securitize new and riskier ventures, credit default obligations etc.   A new variety of consumer fraud will eventually show up.  But it will be the symptom.  The facts at the core won't change, but the parties and the nature of the claims will be different between investors and consumers when that bubble bursts as well.

                    •  I am underwhelmed by this mischaracterization (0+ / 0-)

                      Nowhere did I say the mortgages are the securities themselves. They are what backs the securities is what I continually said and I am continually right about that. What you cite also states exactly what I said. Do you know what collateral means?

                      col·lat·er·al·ize  (k-ltr--lz)
                      tr.v. col·lat·er·al·ized, col·lat·er·al·iz·ing, col·lat·er·al·izes
                      1. To secure (a loan) through use of collateral.
                      2. To pledge (property, for example) as collateral.

                      You cite this above in the statement:

                      These securities are
                      collateralized by the mortgages owned by the SPV, hence they are “mortgage-backed” securities.
                      Definition of 'Collateral'
                      Properties or assets that are offered to secure a loan or other credit. Collateral becomes subject to seizure on default.

                      Investopedia explains 'Collateral'
                      Collateral is a form of security to the lender in case the borrower fails to pay back the loan.

                      For example, if you get a mortgage, your collateral would be your house. In margin trading, the securities in your account act as collateral in the case of a margin call.

                      Read more: http://www.investopedia.com/...

                      To deny that is a fundamental misunderstanding as to why TARP and other bailouts happened at all. Too much collateral was taken back once there was the big margin call that came. Since these securities were on the balance sheets of all major banks because of mortgage defaults in multiple places from Florida to California to Nevada at the same time this made the multiple collateralized debt obligations held by the banks invalid. the government bailed out the banks for these toxic assets; assets that were toxic because there were multiple mortgage defaults. My God, do you not get it?

                      Look at the CDO diagram. By your logic mortgage defaults have nothing to do with the strength of MBS either. False.

                      Think of mortgage payments as small trickles of water that all flows into a pipe. When a bank creates a security backed by mortgage payments(yes it’s true) it diverts the pipe into a bucket. That bucket or a AAA rated tranch was sold to investors. Yes this actually happened and this is how it works.

                      The bucket couldn’t hold all the water so; the bank puts another bucket underneath, and another one under that. The buckets below have lower ratings because they have a greater risk of not filling up with water (and they pay a higher yield as a result).

                      A CDO can be made up of all these buckets, or tranches, as well as the tranches of other asset backed securities.
                      A CDO is constructed so that even if the lower buckets fill up there is still enough to fill the top rated tranch CDO. The banks thought the strength of the CDO was its diversity which was a mistake, but different kinds of mortgages defaulted at the same time leaving no money for the senior AAA tranch.

                      I have explained this a number of times and it's the same principal with transfer issues though albeit on a lesser level. You don't agree, but that is where the disagreement is.

                      I didn't say robosigning frauds were the meat of the problem, but they are a signifcant part of if the transfer issues are not solid in the mortgages which is part of the collateral which is the pool of mortgages held by the trust which pays for the mortgages by issuing these securities. These securities are collateralized by the mortgages owned by the SPV, hence they are “mortgage-backed” securities.

                      You said mortgages in general and transfer issues were completely separate from the securitization process. That's simply not a realistic view of securities or the trusts that issue these securities or what went into CDOs.

                      You own dollars. On your dollar bill or federal reserve note, it says it is backed by all debts public and private with a signature by the Treasury secretary making it legal tender. Tying Treasuries and other debt instruments to your money is not saying that you own the Treasuries or other debts(like MBS) also tied to your money. The economy and overall production of the economy is also tied to your dollar, but obviously you don't own the economy.

                      Stop getting it twisted. I don't need to appeal to any authority. I'm just saying your view is not shared by everyone in the legal profession.

                      But you know what's the sad thing? I think we both agree on securitization itself. In fact I linked to a great explanation of the lack of standards in securitization in my diary above where I say it is securitization is broken.

                      Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin - I Illustrate #OWS protest T-shirts you can buy at priceman political prints

                      by priceman on Fri Feb 03, 2012 at 09:31:21 PM PST

                      [ Parent ]

  •  Everything done (6+ / 0-)

    about the economy, and passed off as reform,  regardless of the electoral politics, serves only to keep the ownership society intact and making a profit. The skulduggery that the bankster's and inside traders we have as elected officials offer as a settlement is not going to fix anything. All it does is keep the game going.

    Glass Steagall? Trust busting? Real regulations?  Why should the real economy the one most people have to live in pay for and prop up this house of cards? I hear a lot from Obama about 'responsible families' getting mortgage relief but nothing about regulating or busting up these entities that bundled and sold peoples houses., let alone, investigating or prosecuting them. That would be a conflict of their interests.    

    The irony to me is that they blame the victim's call them irresponsible and proclaim the fraud's perpetrated, legal. Why is fraud, bribery, and extortion legal? Because they made it legal. Slicing, dicing and bundling peoples mortgages and then hedging their bets so they profit regardless of what happens should be illegal.

    These deals and settlements are designed to keep the 'Theory and Implementation of Oligarchical Collectivism' intact and profitable. It's clear as a bell that no matter who wins this election, we the people are still going to be the victims of the 'responsible people'. Any AG's that strays too far into real justice will get Spritzered or neutered.      

    •  Exactly, shaharazade (1+ / 0-)
      Recommended by:
      shaharazade
      The irony to me is that they blame the victim's call them irresponsible and proclaim the fraud's perpetrated, legal. Why is fraud, bribery, and extortion legal? Because they made it legal. Slicing, dicing and bundling peoples mortgages and then hedging their bets so they profit regardless of what happens should be illegal.

      I hear some people blaming the victim in this diary. Oligarchical Collectivism is not a sustainable system.

      I fear you are right, here.

      Any AG's that strays too far into real justice will get Spritzered or neutered.

      Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin - I Illustrate #OWS protest T-shirts you can buy at priceman political prints

      by priceman on Thu Feb 02, 2012 at 02:32:07 PM PST

      [ Parent ]

      •  I invested (4+ / 0-)
        Recommended by:
        priceman, denise b, shaharazade, KenBee

        $175000 into my home and it still got fraudulently foreclosed. 15 years in the same residence.  I rolled the sod, planted the trees, and tended the garden.  it is not as If we didn't qualify for the loan.  I was out of work and tried to refinance under hamp, followed all their rules.  They wanted the house, bottom line.  And that is why my sig will not change for 2012.  Obama chose the banks over the people.  

        I will not send money to, work for, or vote for, any candidate whose behavior benefits the 1% over the 99%. Work for my vote, money and time, or lose it. Not the other way around.

        by Nada Lemming on Thu Feb 02, 2012 at 08:36:42 PM PST

        [ Parent ]

  •  So, maybe I didn't get the gist, but what is (0+ / 0-)

    thought of the AGs like Kamela Harris (CA) and others that are NOT willing to sign on?

    If the greatest legal assets to a good case are the powers of the AGs to deal with this, should I assume, on the whole, that these independent AGs are the cat's meow?

    202-224-3121 to Congress in D.C. USE it! You can tell how big a person is by what it takes to discourage them. "We're not perfect, but they're nuts."--Barney Frank 01/02/2012

    by cany on Thu Feb 02, 2012 at 11:32:52 AM PST

  •  "David Dayen is widely read, widely ... (2+ / 0-)
    Recommended by:
    navajo, priceman

    ...circulated by most reputable outlets, and is highly citable as is his research, regardless."

    And cited and quoted by FPers here.

    Don't tell me what you believe, show me what you do and I will tell you what you believe.

    by Meteor Blades on Thu Feb 02, 2012 at 07:11:47 PM PST

  •  Yves read this diary (3+ / 0-)
    Recommended by:
    priceman, poligirl, KenBee
  •  congrats on the mention on naked.... (1+ / 0-)
    Recommended by:
    priceman

    capitalism! well done sir!  :D

    Hope has two beautiful daughters; their names are Anger and Courage. Anger at the way things are and Courage to see that they do not remain as they are. --St Augustine

    by poligirl on Fri Feb 03, 2012 at 09:05:47 PM PST

  •  Priceman, have you seen this: Revised settlement? (1+ / 0-)
    Recommended by:
    priceman

    a revised settlement as reported by Reuters.

    I've sqweeked about it but not much comments and no diaries about it.

    It refers to the negative feedback about the settlement at the reason they have added to the bank's pain by allowing the States to sue individually...which is odd because today NY and Ill. both sued...so..

    A strong enforcement mechanism could help the states and the Obama administration sell the deal to the public, after left-leaning activist groups have questioned whether the negotiations were too lenient on the banks.

    crumbs? trial balloon? is this a significant thing?
      If so, I would bet They are waiting for a response...so....

    A strong enforcement mechanism could help the states and the Obama administration sell the deal to the public, after left-leaning activist groups have questioned whether the negotiations were too lenient on the banks.

    I'd say bloggers, writers and Occupy WS should take some credit, as does the Obama Admin for at least listening and responding, whether it is enough?....

    Kamala Harris gets a warning in that article too:

    The final value of the settlement will depend on which states it includes, and could drop sharply if states like California, one of the hardest hit by the foreclosure crisis, do not join.

    On Wednesday, Oregon Attorney General John Kroger said his state will join the settlement. He said Oregon can expect to receive around $30 million from the settlement, and its distressed homeowners can expect around $100 million to $200 million in relief.

    in other words: 'Harris has lost the money that should go to distressed homeowners..' blablabla.

    What did you think of this?

    excellent diary and comments by the way..thanks for it.

    And thanks be to those pie fighters who resisted, I really appreciate it.

    From those who live like leeches on the people's lives, We must take back our land again, America!...Langston Hughes

    by KenBee on Fri Feb 03, 2012 at 09:54:34 PM PST

    •  I agree with Dayen again (1+ / 0-)
      Recommended by:
      KenBee

      These internal quality control groups sound problematic and though the fines of $1 million for the first violation and $5 million for a second could perhaps induce compliance as Dayen said. it depends on which state when given wide discretion as referenced by the NBER study which shows state bank regulators can be a lot worse on that end.

      It could work out well in NY as with the suits Schneiderman filed today and in Illinois, but I still don't like this settlement.

      Thanks, KenBee. This diary did have a lot less trolling than I am used to which is good. I mean I disagree strongly with some people(and the concern about this settlement by MBS investors who feel taken advantage of by the banks shwoing the interconnectedness of this issue here per Yves Smith's latest) who are mischaracterizing my positions, but at least we are having it out the way we should.

      Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin - I Illustrate #OWS protest T-shirts you can buy at priceman political prints

      by priceman on Fri Feb 03, 2012 at 10:38:06 PM PST

      [ Parent ]

      •  oops! here's the link, sorry (1+ / 0-)
        Recommended by:
        priceman

         Exclusive: Mortgage deal would give states enforcement clout

         This was what was revised as it read this morning..interesting that it did change, if it really did, but I'm 99% sure...as of now, it looks like the previously proposed settlement...unless someone has the bit about the states being in there in the first proposed settlement as well?

         

        The enforcement terms mark progress in states' ability to directly monitor mortgage servicing at national banks. For decades, big banks fought state efforts to enforce consumer protection laws by arguing that national banking laws pre-empted their authority

        So it's a pretty big deal, and the 5 million pe item, if enacted would make some people hop...ah...I meant hope, and I do.

        From those who live like leeches on the people's lives, We must take back our land again, America!...Langston Hughes

        by KenBee on Fri Feb 03, 2012 at 11:57:36 PM PST

        [ Parent ]

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