ForeclosureGate: Oh, It Wasn't Just "Document Problems"

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Commentary on capital markets, Category: Foreclosuregate

Oh, It Wasn't Just "Document Problems"?

Hmmm.... what's this?

Officials from the Justice department, the Department of Housing and Urban Development and 10 state attorneys general met with banks today, the second such meeting to negotiate a global settlement, Associate U.S. Attorney General Tom Perrelli said. The group is discussing potential fines and whether servicers should be required to reduce the principal on some home loans.

Criminal indictments? I see the Justice Department name in there....... appears not. "Fines" eh?

What about people who had their home stolen due to malfeasance (or worse) by these servicers?

Iowa Attorney General Thomas J. Miller, who is leading the talks on behalf of the states, said today’s agreements won’t limit his pursuit of penalties. In March, the attorneys general called for changes to foreclosure practices and mandatory loan modifications, including mortgage principal write downs.

Uh huh. The only penalty I'm interested in seeing is this one:

“There will be civil money penalties. The issue is time and amount,” acting Comptroller of the Currency John Walsh told reporters in a conference call.

The Federal Reserve issued a statement saying it plans to announce fines, calling them “appropriate.”

Absolutely. We can't lock people up or break up companies, revoke bank charters (even though the OCC has the right to do so, and The Fed can revoke membership too.)

As I've repeatedly noted if the penalty for robbing the local "Stop-n-Rob" (convenience store) was a monetary penalty that was limited to the amount of the loot you stole, the store would be robbed every fifteen minutes!

The agreements drew immediate fire from critics who said they could undermine the broader negotiations. Representative Maxine Waters, a California Democrat and member of the Financial Services Committee, called the orders “disappointing.”

Oh Maxine! Who writes appropriations bills?

Why hasn't Congress risen and told Justice that unless there are criminal prosecutions that the DOJ will be zeroed in appropriations process, shutting it down?

I know, I know - it's better to whine. That way you can claim to be "outraged" rather than actually getting off your ass and doing something about the problem!

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Comment Posted 2011-04-13 13:54
by Karl Denninger
in Foreclosuregate

All Paperwork "Errors" Eh?

As we sit waiting with baited breath for the whitewash by our so-called Attorneys General that are going to screw the people they allegedly serve (that's the public, not the Banks) we get this:

The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers. One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry. With each revelation, one hopes that the bottom of the barrel has been reached and that the industry will self correct. Sadly, this does not appear to be reality. This case is one example of why their conduct comes at a high cost to the system and debtors.

Fraud. Got that? Not my words, the Judge's.

The question is not simply "did you pay as the bank asserts you had to?", and if the answer is "no", the remedy is "get the hell out of the house."

Uh uh. That would be fine if the banks, on a provable basis in each and every case, always performed exactly as the contract required. But we have seen time and time again that they don't in myriad ways. In the case at bar we have payments that were made and not applied, among others offenses and in fact according to the testimony reflected in this order the loan was current, had those payments been applied.

This case appears to date back more than three years to the latter half of 2007. For three years justice has been delayed and, but for a judge sitting at the Bar who refused to be snowed and steamrollered, justice would have been denied.

Fraud is not punished with a handslap and a promise not to do it again. It is punished via huge fines and imprisonment.

So where are those sanctions, Attorneys General?

Who are you blowing under the desk, Attorneys General, instead of doing your damn jobs?

Tickerguy thanks The Honorable Elizabeth Magner.

Hattip: 4closurefraud.org