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President Obama's announcement Wednesday of a multi-pronged initiative on the housing front that includes a new investigation of illegal mortgage practices and some relief for "under water" borrowers ran into immediate catcalls from the usual suspects. That would be Republicans in Congress and the front-running candidate for the GOP presidential nomination, Mitt Romney. But some Democrats, particularly in California, are also not happy.

In addition, critics who have closely followed the efforts to get a mortgage settlement  from financial institutions involved in abusive lending practices, including over-the-line foreclosure shenanigans, continue to believe that the deal will not be nearly tough enough. Some fear the assignment of New York Attorney General Eric Schneiderman to co-chair a new Department of Justice probe of the foreclosures scandal is an attempt to neuter one of the fiercest proponents of a tough settlement with the banks.  

A big problem is that some elements of the initiative would require congressional action. That would be difficult any time on any issue given the current make-up of the House of Representatives. But chances for approval in an election year? Nil. That's not idle speculation:

“This is not a serious plan to help the nation’s housing market,” Rep. Spencer Bachus (R., Ala.), the chairman of the House Financial Services Committee, said in a statement. “This is just more of the same from an administration that offers expensive program after expensive program, none of which have worked to help struggling homeowners.”

House Speaker John Boehner (R., Ohio) told reporters that “none of these programs have worked … I don’t know why anyone would think that this next idea is going to work.”"One more time? One more time? How many times have we done this?" he asked reporters. "I don't know why anyone would think that this next idea is going to work."

Rep. Zoe Lofgren, chair of the California Democratic Congressional Delegation, and 28 other California Democrats in Congress—from blue dogs to leftists, signed onto a statement saying the president's proposals were "encouraging" but did not go far enough.

(Read more below the fold)

They expressed disappointment that Obama has not accepted their calls to replace Edward DeMarco, chief of the FHFA, an independent agency that regulates Fannie Mae and Freddie Mac. DeMarco, they said, has placed the interests of Fannie Mae and Freddie Mac "above those of struggling homeowners." They reiterated calls for a plan that includes interest relief and a pay down of the principal for under-water mortgages.

Lofgren stated:

Time and again we've asked that the Administration take strong action on behalf of our constituents who have been victimized by mortgage servicers. Homeowners are following the banks' rules, and yet continue to be treated poorly. I hope that this Administration does not settle for the deal being pushed by the banks. Giving banks broad immunity would be settling—we must stand up for our constituents and demand more. Attorney General [Kamala] Harris's refusal to accept the initial terms is a good move for Californians and homeowners across the country."

Reuters reported Wednesday that it had seen documents on the final settlement that say a "monitoring committee" would be established and empowered to go to court to seek penalties of up to $5 million per violation of the terms of the settlement going forward.

Among longstanding critics, David Dayen remains skeptical about how effective this will all be:

[...] 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.

The fines of $1 million for the first violation and $5 million for a second could perhaps induce compliance, though I’m skeptical based on the process itself.

This presents another of those instances of "we'll see." On the White House blog Wednesday, Consumer Financial Protection Bureau Director Richard Cordray cut to the core: "Too many families were forced into foreclosure because paperwork was lost, phone calls went unanswered, errors were not resolved, or documents were falsified." Huzzah.

Not slip-ups or innocent mistakes or forgetfulness. Fraud. And fraud deserves prosecution and penalties that go beyond monetary settlements. But will we get any?

William K. Black, former bank regulator and chronicler of the savings and Loan scandal and its aftermath in the 1980s, is not convinced. Rather the opposite:

Neither [the Bush nor Obama] administration has prosecuted any elite CEO for the epidemic of mortgage fraud that drove the ongoing crisis. This contrasts with over 1,000 elite felony convictions arising from the S&L debacle. The ongoing crisis caused losses more than 70 times greater than the S&L debacle and the amount of elite fraud driving this crisis is also vastly greater than during the S&L debacle. Bank CEOs leading “accounting control frauds” now do so with impunity from the criminal laws. They become wealthy through fraud and even if they are sued civilly they almost invariably walk away wealthy with the proceeds of their frauds.

No settlement can make that right. Only prosecutions can. There are positive hints, but only hints, that we may finally get some. Let's hope we are not again disappointed on that score.

Originally posted to Meteor Blades on Thu Feb 02, 2012 at 11:50 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  Obama should have put (13+ / 0-)

    William K. Black in charge.

    Honesty pays, but it doesn't seem to pay enough to suit some people. Kin Hubbard

    by Mr Robert on Thu Feb 02, 2012 at 12:06:35 PM PST

    •  He should put Dean Baker in charge (6+ / 0-)

      If we had followed his prescriptions from late 2008, we wouldn't be in this situation now.

      This is, by the way, the most genuinely correct thing John Boehner has ever said on an issue of public concern:

      House Speaker John Boehner (R., Ohio) told reporters that “none of these programs have worked … I don’t know why anyone would think that this next idea is going to work.”"One more time? One more time? How many times have we done this?" he asked reporters. "I don't know why anyone would think that this next idea is going to work."

      But nobody's buying flowers from the flower lady.

      by Rich in PA on Thu Feb 02, 2012 at 12:17:52 PM PST

      [ Parent ]

  •  Crippled by Bush II (2+ / 0-)
    Recommended by:
    PsychoSavannah, KenBee

    1) Bush II socialized the losses of Fannie/Freddie onto the backs of the taxpayer

    2) Had Bush II not done that, Fannie / Freddie mortgage-backed securities would be trading at $60 not $110

    3) Bush II provided $150 billion to from the taxpayers to the owners of Fannie/Freddie bonds and mortgage securities

    4) The owners of that paper have zero incentive to renegotiate with homeowners because of the subsidy by Bush II

    5) The right wing media makes it appear that the it was the genius of the investors that led them to buy bonds now worth $108 and that any attempt to take that away is socialism

  •  I agree with Lofgren (0+ / 0-)

    and noted this in another diary thread.

    here's what I expect: the President goes all kumbaya and puts this commonsense plan before Congress, which of course, balks, stammers and does nothing, THEN, after pointing that out, he goes the F&F route - don't know how much latitude he's got there.

    The facade of an involvement in Congress, because we know the GOPers won't play, is a necessary first step.

    •  sry, what does F and F route' mean? (0+ / 0-)

      and that has been IMO effective strategy, (plan before congress)agonizingly slow....but if they are willing to shot their own feet, well, let er rip.

      ..squinting all the while in the glare of a culture that radiates ultraviolet consumerism and infrared celebrity...Russell Brand

      by KenBee on Thu Feb 02, 2012 at 06:23:17 PM PST

      [ Parent ]

      •  Around 2004, (1+ / 0-)
        Recommended by:
        KenBee

        President Bush tried to get Congress to turn over Fannie Mae and Freddy Mac to the Executive Branch (that was his "reform" conservatives tout when claiming that the housing crisis was all the "libs" fault).

        When his own party in Congress told him to take a hike, President Bush directed HUD to allow Fannie and Freddie (F&F) to begin fulfilling their charters by buying Alt-A bundles, dumping nearly a half-trillion taxpayer dollars into the already overheated secondary mortgage market.

        The only route I see possible for President Obama to get anything done would be to either slap down or simply replace the current heads of these organizations with people more concerned about borrowers than with the bottom line of the organizations, and begin using them to refinance.

        I don't even know how much legal authority or latitude, or even how much cash, he would have in this route, but I really don't think Congress is going to play, because playing improves the economy, thus ensuring re-election for that most-hated President.

  •  Just like the "blame Freddie and Fannie" (8+ / 0-)

    stuff on the right, the notion on the left that the scheming of criminals on Wall Street is responsible for the housing crash--and that prosecutions can deter such behavior and thus prevent a future crash--is more than a little simplistic.

    The problem was systemic and complex.  It involved irresponsible behavior from just about everyone from the CEOs of the giant banks down to the home buyers who lied about their incomes on mortgage applications to get themselves a zero percent-down mortgage they wouldn't be able to pay back.   It also involved a complete misapprehension of risk--and misallocation of the consequences of adding too much risk-- by just about everyone, aside from guys like Byron Dorgan.

    And it's really stupid to criticize the head of Fannie and Freddie for putting the interest of those organizations first.  The alternative is to have them go belly up, a move that would be the worst possible case for prospective home buyers.  

    "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

    by Geekesque on Thu Feb 02, 2012 at 12:41:02 PM PST

    •  self-labeled "left" blogs (2+ / 0-)
      Recommended by:
      jalenth, Escamillo

      complain Obama didn't go far enough after he appoints the very person they pined for.

      NEWS AT 11.

      •  Appointments don't necessarily (0+ / 0-)

        lead to the right policy choices.  It isn't about people, it's about policies and actions.  That's what we've missed from Obama when it comes to housing.  I believe that Summers and Geithner were behind the decision to go for the Republican-supported, "let the market clear as quickly as possible" policy.  Now apparently everyone is having second thoughts, possibly because it is an election year.  

    •  The criticism regarding... (11+ / 0-)

      ...the head of Fannie and Freddie includes nearly every House Democrat from California form Barbara Lee to Jim Costa, who, no matter what else can be said about him is not exactly a leftist. As for the idea that Bill Black is simple, please.

      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 01:23:13 PM PST

      [ Parent ]

      •  California's homes were grossly overpriced (3+ / 0-)
        Recommended by:
        lcj98, Escamillo, Supavash

        during the bubble, and their Congressional Representatives will naturally want Fannie and Freddie to help shield the state from the hangover.  

        But, Fannie and Freddie need to stop losing money. How many bailouts will be enough before their existence becomes politically untenable?

        Black does engage in simplistic analysis.  His conclusion that the Obama administration broke the law because the FDCI didn't seize Citigroup was as cartoonishly reductive as it was inaccurate.

        As generally were any calls for the USG to seize and dismantle an entity like Citi that processes Trillions of dollars every day without Congressional approval or funding.

        Too Big To Fail is a problem, but unwinds of mega-institutions aren't something that can be done impromptu.

        "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

        by Geekesque on Thu Feb 02, 2012 at 02:03:42 PM PST

        [ Parent ]

        •  If you want to spread the blame around... (18+ / 0-)

          ...that's fine. Make everyone involved suffer a little. But that's not what's happened or happening.

          The folks at the bottom of this pyramid are being punished, whether they have a share in behavior that caused this mess or not, and many, many did not. And whether they did or not, they're still losing their homes at a prodigious rate. What punishment is being exacted on the creeps at the top who Richard Cordray says committed fraud? How many of them are on food stamps, unemployment or living with their parents or kids because of their "mistakes." Like so much else in our upsidedown economic system, class war is being waged in the housing crisis, too.

          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 03:40:48 PM PST

          [ Parent ]

          •  I don't disagree with any of that. (2+ / 0-)
            Recommended by:
            pstoller78, Escamillo

            One good place to look is:  why do executives who cause their companies to lose money and even go bankrupt (Stan O'Neal, Chuck Prince etc) get golden parachutes worth $100 milllion?

            The problem is not so much of individual criminality (though that certainly did happen in some cases) but rather a culture of greed and non-accountability in corporate America.

            Under the system there was (and is!), executives have incentives to pursue risk recklessly.  If their bets pay off in year one, they're fantastically wealthy.  If those bets turn out to lose in year two and bankrupt their company, they're still fantastically wealthy.

            Prosecutions are ineffective at best at deterring greed.  These greedy s.o.b.'s aren't worried about jail time.  They're too arrogant to think they'll ever get caught even if one can bring such criminal cases.

             If you want to deter greed, change the rules of executive compensation to stop rewarding people who gamble with other people's money.

            If they know they can't get rich doing something, they won't do it.

            "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

            by Geekesque on Thu Feb 02, 2012 at 04:03:57 PM PST

            [ Parent ]

            •  I don't disagree with the idea that we... (2+ / 0-)
              Recommended by:
              Geekesque, Supavash

              ...can't deter greed with prosecutions. But we can deter crime, or, failing to do so, punish the criminals. That's what we're not doing, not so far. I'm not a pollyanna about the system's difficulties in this matter nor the cleverness of the crooks. What they're doing is not stupid street crimes.

              But, like all crooks from the teenage shoplifter to the cat burglar, they figure they'll never get caught because they were smart about their crime. And if, perchance they do get nabbed, they figure they'll be able to talk their way out of it because they are so smart and their lawyers are crafty as well.

              Putting a dozen or so of the best cases on the court docket would go a long way toward deterrence in my opinion. In my neighborhood live some guys who wear prison time as a badge of manhood and honor. Tough guys. They literally don't worry about being locked up. These banksters, they don't fear prison because they don't think they'll ever go. We need to persuade them with a few well-placed indictments that they're wrong. Why this should apply only to uneducated street hoodlums and not to crooks with MBAs is beyond me.

              As for your other, changing the rules of compensation, I'm with you 100%.

              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 10:18:54 PM PST

              [ Parent ]

              •  I dunno. Boesky, Milken, Skilling and Lay, (0+ / 0-)

                Kozlowski, Ebbers--how much deterrent value did those prosecutions have?

                Also, it takes something pretty blatant to pass the unanimous jury verdict threshold. Proving fraud is pretty damn difficult in civil actions.  Criminal actions almost require a smoking gun.  

                Until the culture changes, jail time will be just one more risk factor to weigh, along with interest rates, bond spreads etc.

                "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

                by Geekesque on Fri Feb 03, 2012 at 12:41:01 AM PST

                [ Parent ]

              •  I disagree. It's grossly expensive, for one thing. (0+ / 0-)

                Regulation and oversight before the fact beats criminal prosecution after the fact every time.  Prevent the harm if you can.

                But if the choice is between prosecution after the fact and no prosecution, then by all means, prosecute.

          •  So many are the victims of predatory lending and (2+ / 0-)
            Recommended by:
            KenBee, priceman

            other fraud and scams, they should have significantly more protection and those predators should have their fangs and talons pulled, permanently.

            Information is abundant, wisdom is scarce. The Druid

            by FarWestGirl on Thu Feb 02, 2012 at 04:36:05 PM PST

            [ Parent ]

            •  those home owners need a Lesson They Will Never (1+ / 0-)
              Recommended by:
              priceman

              Forget.

              Bankers, mortgage industry, securities industry?

              They legally have to act immoral, you understand.

              ..squinting all the while in the glare of a culture that radiates ultraviolet consumerism and infrared celebrity...Russell Brand

              by KenBee on Thu Feb 02, 2012 at 06:24:51 PM PST

              [ Parent ]

              •  That's true too. Too many Americans are naive (0+ / 0-)

                about these industries and about their government.  Ain't nobody on your side - the bankers, everyone involved in securities, etc. - they are engaged in legalized theft.  And your representatives in government are the ones doing the legalizing.

            •  Victims of predatory lending had protection (3+ / 0-)
              Recommended by:
              priceman, Meteor Blades, Geekesque

              State legislatures and/or attorney generals were all working hard to protect them after the federal government ignored their requests and warnings about the predatory lending.

              And then the federal government took action, no longer ignoring the problem. What they did was unprecedented:

              the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

              But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks.  


              (from Spitzer's article 2/14/2008, just before his arrest)
              Predatory Lenders' Partner in Crime

              So...plenty of government officials were looking out for them... some to help prevent it and some to make sure it kept happening
              And that was in 2003 that the OCC stepped in
              and let the problem get worse and worse
              almost like they wouldn't mind a crisis.
              Well I guess they needed lots and lots of mortgages to break up and put into AAA securities
              Those credit default swaps offered plenty of protection

              Well not for the mortgage holders of course. Not for neighborhoods. Not for the common person

              •  Politicians in state and local governments (0+ / 0-)

                were riding high on all the tax revenue that was being generated by the high level of home sales and rising property taxes from rising home prices.  So they were none to eager to put a stop to it either - do not fool yourselves.  

                And Republican politicians have managed to make a virtue out of all the budget cutting that has to happen because tax revenues have tanked.  

        •  Misconception (2+ / 0-)
          Recommended by:
          AoT, priceman
          Too Big To Fail is a problem, but unwinds of mega-institutions aren't something that can be done impromptu.

          You won't be thinking that way in May of 2013 when the next belly up has EVERYONE screaming unwind...

          You do know who the chief of staff was during that period, and you also know that the runway to liftoff is much shorter than everyone thinks...

          May 2013-  Mark your calendar...

          Evidence that contradicts the ruling belief system is held to extraordinary standards, while evidence that entrenches it is uncritically accepted. -Carl Sagan

          by RF on Thu Feb 02, 2012 at 05:38:30 PM PST

          [ Parent ]

        •  Courts decide the law+you're wrong (1+ / 0-)
          Recommended by:
          Meteor Blades

          You and Black had a disagreement on the PCA. Only the court could have decided and it is possible Black could have been ruled against, but at least he had the S&L crisis as a basis instead of the zombie bank lost decade Japan method. And we don't even have the export driven economy under us like they did, so it's even worse for us.

          The problem for you is that no one really agrees with your argument anymore, not even your hero. Whether it's a study of 124 banking crises.

          Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

          Or the President's support for the Dodd Frank resolution authority(ironically now making Bill Black's argument have more weight) which is the sole basis that there won't be anymore bailouts(so he says), so so much for the case that the USG/improved FDIC receivership can't receive an institution that processes trillions. Probably shouldn't have bailed them out then since it's so complicated or trusted their valuations of their equity ratio then.

          Plus Ron Suskind's book says the president wanted to break up Citigroup but Geithner undermined him.

          That's not to say that there weren't some good arguments against receiving Citigroup itself given its overseas operations and the complications there, but this certainly never was one.

          It will indeed be interesting to hear you explain the next bailout.

          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 08:52:58 PM PST

          [ Parent ]

          •  Suskin's book said Obama wanted a proposal on how (0+ / 0-)

             to seize C.   Not that he ordered an actual seizure (which would have put Timmeh in charge of running that monstrosity).

            Certainly a government takeover was possible legally--if the Feds hadn't given C ring fence protection in November 2008, the FDIC would have had to take the consumer bank into receivership.  

            At which point its assets would have been auctioned off to either Wells Fargo or JPMorgan Chase.

            "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

            by Geekesque on Fri Feb 03, 2012 at 12:53:27 AM PST

            [ Parent ]

    •  Agreed. It's not outright fraud that caused the (2+ / 0-)
      Recommended by:
      Geekesque, WillR

      housing bubble & subsequent collapse. It is largely a mass psychosis at the time (2003-2006) wherein people thought housing prices would either go up or stay up forever. That mindset was totally unchallenged at that time, leading everyone, including borrowers, lenders, security buyers, security raters, GSE's, to make irrational decisions.

      •  "Buy now or forever be priced out." (0+ / 0-)

        Nobody had anything to gain from acting like the music was going to stop at some point.  All the money was for people who were dancing.

        Except for the DB "I'm short your house" guy.

        "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

        by Geekesque on Thu Feb 02, 2012 at 02:16:38 PM PST

        [ Parent ]

      •  Interesting off base a-historical theory (0+ / 0-)

        Irrational exuberance doesn't explain it. It added to the fervor which instead of animal spirits became animal free market demons, but to deny the role of outright fraud(not the only factor but a very significant one) is pretty embarrassing to say the least.

        Robert Shiller – one of the top housing experts in the United States – says that the mortgage fraud is a lot like the fraud which occurred during the Great Depression. As Fortune notes:
        Shiller said the danger of foreclosuregate — the scandal in which it has come to light that the biggest banks have routinely mishandled homeownership documents, putting the legality of foreclosures and related sales in doubt — is a replay of the 1930s, when Americans lost faith that institutions such as business and government were dealing fairly.

        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 09:10:41 PM PST

        [ Parent ]

  •  Wow, Dday criticizes (1+ / 0-)
    Recommended by:
    Escamillo

    an Obama policy??  Shocking, I tell you!

  •  Come January 21, 2013 (7+ / 0-)

    There had better be a new sheriff in town.

    One without the concerns of a re-election campaign in four years...

    One ready and willing to step up and publicly challenge the conservatives in his own Party - and the Obstructionists of the (not so loyal) Opposition...

    One who walks the talk of his campaign, loudly, proudly and without reserve...

    One whose DoJ starts issuing Subpoenas, prosecuting criminal behavior, perp-walking CEOs and other Hi-Risk-Gamblers who failed spectacularly at making money until they put their hand-out for Uncle Sam to save them in the Fall of 2008...

    I'm voting for the President's re-election in Nov 2012, yes I am.

    But I'm going to be hounding him to hell from now until then to do the right thing when it comes to many of these issues.

    Be the Leader of The People that history is calling for in these perilous times.

    Barack Obama has shown us that he has the makings of greatness in him - we must push him to become the President we need him to be.

    * * *
    I like paying taxes...with them, I buy Civilization
    * * *
    "A Better World is Possible" - #Occupy

    by Angie in WA State on Thu Feb 02, 2012 at 01:25:24 PM PST

    •  The time to pressure is now (5+ / 0-)

      After Jan. 21 there is absolutely no incentive for any new sheriff.

      •  Yeah, that's what I said... (4+ / 0-)
        I'm voting for the President's re-election in Nov 2012, yes I am.

        But I'm going to be hounding him to hell from now until then to do the right thing when it comes to many of these issues.

        We are on the same page here, joanneleon, you and I.

        * * *
        I like paying taxes...with them, I buy Civilization
        * * *
        "A Better World is Possible" - #Occupy

        by Angie in WA State on Thu Feb 02, 2012 at 04:15:34 PM PST

        [ Parent ]

        •  Why do you think this will work? (1+ / 0-)
          Recommended by:
          Tommy Allen

          Obama from the start has surrounded himself with Wall Street insiders with a vested interest in not doing the right thing. Erik "Place" Holder and Lanny Breuer were partners for years at Covington and Burling which according to Reuters is a "Washington law firm that represented a Who's Who of big banks and other companies at the center of alleged foreclosure fraud"

          http://www.reuters.com/...

          These two weren't the only people at DOJ worried about blowback from a real investigation: "In 2010, Holder's deputy chief of staff, John Garland, returned to Covington, as did Steven Fagell, who was Breuer's deputy chief of staff in the criminal division.

          The firm has on its web site a page listing its attorneys who are former federal government officials. Covington lists 22 from the Justice Department, and 12 from U.S. Attorneys offices, the Justice Department's local federal prosecutors' offices around the country."

          Did you know that Covington and Burling issued legal opinions concerning MERS? If these legal opinions are shown to be wrong - think the Ibanez case in Massachusetts - imagine the personal liability of a partner in a firm that issued this opinion.

          Then there's Mary Shapiro at the SEC. She was head of FINRA - "FINRA is the largest independent securities regulator in the U.S. Our chief role is to protect investors by maintaining the fairness of the U.S. capital markets." (from the Finra web site). She was paid millions and utterly failed to protect investors, the public, and the economy from the TBTF banksters fraud.

          http://abigailcfield.com/

          Check out the entry on Securitization Fail
          "The criminal securities fraud at the heart of the financial crisis has one very under-reported aspect: “securitization fail.” Once you understand the securitization fail concept, you can instantly, with tremendous clarity, see the scale of the fraud the Bailed Out Banks and Wall Street firms committed and commit every day. Get securitization fail, and the bankers’ crimes stand out like a vast herd of bison on the South Dakota prairie, a herd much bigger than this one.

          Perhaps the most critical insight that flows from understanding securitization fail, however, is that the crimes will continue so long as we are processing foreclosures. When you understand securitization fail, you understand the scale of liability the Bailed Out Bankers created for themselves, and why foreclosure fraud is their preferred escape route. In fact, you’ll understand why the banks will continue to commit foreclosure fraud regardless of signing the settlement with law enforcers. Get securitization fail and you understand that a thorough investigation could straightforwardly document it, and create so much leverage for law enforcement that it could essentially dictate terms of settlement."

          So, what is securitization fail then? Reality Check states that "here’s the thing: buying home mortgage loans isn’t like buying groceries. Special rules apply. Transferring ownership involves a couple steps and takes at least a few minutes. The reason it’s tricky is that historically, a lot of land was stolen from people, so the legal system developed rules to stop the theft. Since mortgage loans affect the ownership of the underlying land, the rules cover them too.

          The special rules are why the Trustee has to really check out the documents I give the Trust. While it’s easy enough to do transfers correctly, failing to cross the t’s and dot the i’s invalidates the transfers. If I failed to cross those t’s and dot those i’s, and the Trustee didn’t catch me and force me to fix the problems in time, the piece of paper you hold promising you $106 is worth a whole lot less.

          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?"

          Millions of mortgages were not securitized correctly which means that there are millions of cases of fraud against TBTF banksters like Jaime Dimon.

          Her chief enforcement officer, Robert Khuzami, a former prosecutor of white-collar criminals and terrorists, her enforcement chief was Deutsche Bank AG’s general counsel for the Americas.
          From Naked Capitalism on an "investigation" into Deutsche Bank:
          Why is there probably less here than meets the eye? For this investigation to be taken seriously, SEC enforcement chief Robert Khuzami would have to resign. He was the general counsel for the fixed income area at the time when the deals in question were undertaken (contra Der Spiegel, START was a program of synthetic CDOs, not just a single deal, just the Goldman Abacus trade that was the focus of an SEC lawsuit was actually just one of 25 Abacus trades). It would not be sufficient for Khuzami to recuse himself from this investigation. Staff would still be concerned about how the probe might affect their ultimate boss.

          In addition, the fact that Paulson approached Deutsche Bank has been in the public domain since October 2009, when Greg Zuckerman’s book, The Greatest Trade Ever, was released.

          http://www.nakedcapitalism.com/...

          Of course, who could forget that all 3 of Obama's Chief of Staffs have worked on Wall Street, that Obama re-appointed Bernanke who was an utter failure at detecting and taking the proper action to prevent this fraud (the FBI told the FED in 2004 that something needed to be done), and patient zero for this whole FUBAR, former NYFED president Turbo Timmy Geithner, is Obama's secretary of the Treasury.

          Obama will not prosecute TBTF banker fraud. When politically expedient, he will say nasty populist things about the banksters, but he will never actually do anything. After the general election, when you have nothing of value for him (your donations, your time, your vote) he will laugh in your fact. In fact, I predict that if Obama is re-elected Jon Corzine will not be prosecuted for the obvious securities theft at MF Global when segregated money in customers accounts was illegally used to pay MF Global creditors.

    •  Yup, the 'Fire Folder & hire a real AG' case (4+ / 0-)

      should be made now and loudly. And followed up on until it happens.

      Information is abundant, wisdom is scarce. The Druid

      by FarWestGirl on Thu Feb 02, 2012 at 04:38:30 PM PST

      [ Parent ]

  •  My own view (2+ / 0-)
    Recommended by:
    Escamillo, KenBee

    is the schneiderman appointment shows the differences between main justice and the state attorneys general was more about tactics thn philosophy.  I've long thought it was a Mutt and Jeff game.

    The ultimate deal may be either net good or not, and probably not knowable ex ante, but to reject the very notion of a financial settlement with relases out of hand is, in essence, spending money that could go to homeowners for prosecutions with uncertain returns and certain delays.  

    As far as the mortgage mod proposals, given that it requires congressional approval, there's no sense in trying to please Zoe Lofgren 100%.  It doesnt even yield a political dividend when the House rejects it, because unless the republicans have no reason to reject it, by the terms of the most moderate lighhts in the party, doing so doesnt make them look obstructionist.  Less an ideal, but that's the cards.

    The study of law was certainly a strange discipline. -- Yukio Mishima

    by Loge on Thu Feb 02, 2012 at 01:32:38 PM PST

  •  Having spent most (3+ / 0-)
    Recommended by:
    annieli, PsychoSavannah, Escamillo

    of my legal career fighting the AGs office -- one thing I learned -- the AG sets the agenda but doesn't do the grunt work.  The AAGs can be fearless and ferocious.  

    Schneiderman set his agenda.  This appointment will in no way neuter what he wants achieved on the NY State level.

    Vi er alle norske " My faith in the Constitution is whole; it is complete; it is total." Barbara Jordan, 1974

    by gchaucer2 on Thu Feb 02, 2012 at 04:35:13 PM PST

    •  what do you think is the rest of of the deal? (0+ / 0-)

      If any, not that we'd know of course, we'll read about it in 25 years or so...do you think he was recruited with promises of future responsibilities at Justice...promises to reward his obstruction of the settlement if he will help the admin look , well,...better on this issue?
      or any of 50 other scenarios...

      And what would you have done when offered an appointment by the very people you are struggling with?

      It's tricky and very interesting.
      and we need more heroes.

      I'm sure happy I got to vote for Kamala Harris!

         

      ..squinting all the while in the glare of a culture that radiates ultraviolet consumerism and infrared celebrity...Russell Brand

      by KenBee on Thu Feb 02, 2012 at 06:18:32 PM PST

      [ Parent ]

  •  Prosecutions must proceed apace (2+ / 0-)
    Recommended by:
    Simplify, KenBee
    No settlement can make that right. Only prosecutions can. There are positive hints, but only hints, that we may finally get some. Let's hope we are not again disappointed on that score.

    dangerous voter for a "dangerous president"; Präsidentenelf-maßschach; Warning-Some Snark Above"Nous sommes un groupuscule" (-9.50; -7.03) "Sciant terra viam monstrare."

    by annieli on Thu Feb 02, 2012 at 04:42:00 PM PST

  •  This punished the banksters how? (2+ / 0-)
    Recommended by:
    KenBee, Tommy Allen

    There should be corporate personhoods in PRISON

    We got Geithnered again!

    It is as if these corpo-crap-cats to do not work for the 99%

    Separation of Church and State AND Corporation

    by Einsteinia on Thu Feb 02, 2012 at 04:43:01 PM PST

  •  Thank you. (2+ / 0-)
    Recommended by:
    KenBee, Supavash
    No settlement can make that right. Only prosecutions can.
    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 04:43:30 PM PST

  •  don't give up, Schneiderman (1+ / 0-)
    Recommended by:
    KenBee

    If it's fake, just walk away.

    Being ignored is the difference between being a one percenter and an American.--sweeper

    by SouthernLiberalinMD on Thu Feb 02, 2012 at 04:48:20 PM PST

  •  Isn't the mortgage refinancing voluntary? (2+ / 0-)
    Recommended by:
    NoMoreLies, SoCaliana

    So the bank that you are paying high interest rates to is supposed to offer lower interest rates out of the goodness of their heart?  Or the competition that has impossibly high requirements for loan applicants is suddenly going to relax their standards?

    As long as it's voluntary, I don't see many under-water mortgages getting refinanced with more favorable terms for the home owner.

  •  Obama has earned all the trash talk. (2+ / 0-)
    Recommended by:
    Ender, Tommy Allen

    There is so much that Obama can do on an administrative level with no new legislation at all, it's a wonder that the civil servants don't go public.

    While he criticizes Romney for it, Obama is actually slow-walking this pile of crap into a bottoming out, setting the stage for a market-based solution where banks will gladly reset mortgages themselves.  It isn't happening. It's not in their DNA to stoke their losses by resetting mortgages.

    They simply don't have to. What then is Obama doing?  

  •  There was no mortgage fraud- (2+ / 0-)
    Recommended by:
    KenBee, Tommy Allen

    NPR tells the masses EVERYDAY with emotion that it was a financial crisis, not mortgage fraud by the bankster class...

    Every phuckin day that infested outfit lies thru their teeth via omission and circus drivel...

    I can only hope and prey they commit a similar "self-inflicted" wound ala SGK such that the ilk running that sorry NPR-DC outfit is replaced; just no stealing any of Amy Goodman's staff; they and The Real News are now front center for an hour daily; the rest of the media is OFF-

    Oh yeah, and Sam Seder's podcast and other excellent astro poli forecasts like this one...

    Evidence that contradicts the ruling belief system is held to extraordinary standards, while evidence that entrenches it is uncritically accepted. -Carl Sagan

    by RF on Thu Feb 02, 2012 at 05:31:12 PM PST

  •  Don't hold your breath. (5+ / 0-)
    Recommended by:
    denise b, KenBee, Jarrayy, NoMoreLies, mcc777c2

    We will get a final comprehensive report in 2015, including names and dates. At the point, we will be beyond the statute of limitations, witnesses will be sketchy, documents will be lost, and the whole thing will be too ponderous, time consuming, and expensive to litigate.

    Then again, of political expediency demands it, we may get a few token arrests.

  •  The eternal malcontents are not content. (0+ / 0-)

    What a surprise!!  lol

    Who cares?
    There's no pleasing them, so the fact that they aren't pleased is not indicative of anything.

  •  That 1-pager mortgage document Pres. Obama held (0+ / 0-)

    up in the video sounds familiar.

    Didn't they try plain English mortgage docs years ago, and people stopped buying because they saw the real (astronomical) money they were paying out?

  •  The kind of "flak" he is getting from the (2+ / 0-)
    Recommended by:
    Tommy Allen, KenBee

    Dem side is warranted.  But the Repub flak is just a bunch of whining.

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