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View Diary: NY Attorney General to Sue Wells Fargo & BofA (49 comments)

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  •  This post gets the story wrong, in large part... (15+ / 0-)

    ...because the first sentence of the MarketWatch/Reuters story is misleading. Just a few sentence later in that report there's this...

    ...He [Schneiderman] said he plans to sue the banks unless a monitoring committee set up to enforce the settlement's terms takes action...
    (emphasis/underline is from me)

    Furthermore, as far as the update from Kossack shrike is concerned, the excerpt belies the reality that--once you read further in the article--B of A may actually gain as much if not more than they're spending in the MBIA settlement. (This Kossack is ignoring their ethical responsibility to disclose their professional bias, IMHO, as they did with me in one public comment in this community, just a few weeks ago.)

    Here's Taibbi, from about 10 days ago on the Independent Foreclosure Review...

    While Wronged Homeowners Got $300 Apiece in Foreclosure Settlement, Consultants Who Helped Protect Banks Got $2 Billion
    By Matt Taibbi
    Rolling Stone
    April 26, 3:53 PM ET

    The obscene greed-and-arrogance stories emanating from Wall Street are piling up so fast, it's getting hard to keep up. This one is from last week, but I missed it – it's about the foreclosure/robo-signing settlement that was concluded earlier this year.

    The upshot of this story is that in advance of that notorious settlement, the government ordered banks to hire "independent" consultants to examine their loan files to see just exactly how corrupt they were.

    Now it comes out that not only were these consultants not so independent, not only did they very likely skew the numbers seriously in favor of the banks, and not only were these few consultants paid over $2 billion (over 20 percent of the entire settlement amount) while the average homeowner only received $300 in the deal – in addition to all of that, it appears that federal regulators will not turn over the evidence of impropriety they discovered during these reviews to homeowners who may want to sue the banks.

    In other words, the government not only ordered the banks to hire consultants who may have gamed the foreclosure settlement in favor of the banks, but the regulators themselves are hiding the information from the public in order to shield the banks from further lawsuits…

    And then, of course, after everything was said and done, with the IFR being acknowledged as a joke, our government added insult to injury when they ordered the banks to correct their own screw-ups, with virtually no additional oversight from our government.

    The truth is more as Shahien Nasiripour and Ryan Grim reported it, on April 24th (which is pretty much in line with how folks like Taibbi and Smith have been calling it for a couple of years...

    Eric Schneiderman Challenges Obama Administration Over Mortgage Investigations
    Ryan Grim and Shahien Nasiripour
    Huffington Post
    04/24/2013 7:34 am EDT  |  Updated: 04/24/2013 7:30 pm EDT

    WASHINGTON -- New York Attorney General Eric Schneiderman has privately criticized the Obama administration and the Department of Justice for not aggressively investigating dodgy mortgage deals that helped trigger the financial crisis, according to senators and congressional aides who met with him this month.
    New York’s top prosecutor is co-chair of the administration’s year-old Residential Mortgage Backed Securities Working Group, an initiative that President Barack Obama called for in his State of the Union address last year...
    ...

    ...Schneiderman, a Democrat who has attempted to investigate Wall Street, expressed his frustrations with the administration earlier this month during private meetings with Democratic senators on Capitol Hill, arguing that he was “naive” when he first entered into the partnership with the Justice Department, lawmakers and their aides said.
    Critics of Schneiderman's collaboration, which came in exchange for his assent to a national mortgage settlement, warned at the time that the attorney general was being played. His recent criticisms of the administration may renew allegations that he, too, has compiled a lackluster enforcement record.

    Schneiderman has recently directed his attention to working with lawmakers and outside groups to pressure the administration to toughen its approach...
    ...

    ...Examples of criticized settlements include the Justice Department's decision not to file criminal charges against financial companies accused of manipulating benchmark interest rates, as well as banks alleged to have helped drug cartels launder money through the U.S. financial system. Government panels like the Financial Crisis Inquiry Commission and the Levin-chaired Permanent Subcommittee on Investigations that referred cases for potential prosecution have seen their recommendations cast aside.

    Schneiderman excoriated Justice Department officials for their approach in targeting wrongdoing by financial institutions in private meetings with lawmakers...
    ...

    ...In the months after Schneiderman took office in 2011, large financial institutions and their lawyers said they feared him. Now, some have said privately in interviews that they view him as a nuisance, given the dearth of cases he has brought in light of his aggressive requests for documents...
    ...

    ...Members of advocacy groups who have met with Schneiderman have expressed disappointment in his own efforts to hold financial institutions accountable, and question his criticisms of the administration. Those who spoke on the condition of anonymity for fear of jeopardizing their relationships with his office described Schneiderman’s rhetoric as far more aggressive than his investigations....

    Schneiderman has been underwhelming. I'd consistently heard, even when he was running for AG, that he was a bit of a whimp; and, that his bark was always much worse than his bite. There's nothing I've read (in terms of "inside baseball" stuff, along with Taibbi and the HuffPo piece here, as well commentary from others, including Yves Smith) other than his own P.R., that would lead me to believe otherwise.

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Mon May 06, 2013 at 11:48:49 PM PDT

    [ Parent ]

    •  Aside from the fact that governmental regulations (6+ / 0-)

      are designed to make enterprise more regular and less subject to risk and surprise, the information provided to regulators in exchange for their supervision and help is confidential to exclude it from competitors and to keep it from being used against the regulated in criminal proceedings. Otherwise any voluntary information about wrong-doing could be used against the source in a criminal complaint. In other words, if regulators didn't provide immunity from prosecution, the regulated enterprise wouldn't hand over any information. So, irregularities uncovered in the process of a normal review can't be prosecuted as crimes. Which is why, as is the case with public corporations, the operating procedures have to be minutely specified up from and an egregious failure to comply has to be punished by shutting the enterprise down. Which is precisely what has happened with the hundreds of banks that have been dissolved and had their assets handed over to someone else.
      Many home buyers are being disadvantaged because they signed documents and effectively agreed to be cheated or deprived of their rights. In Georgia they did it explicitly:

      Waiver of Rights

      By execution of this Instrument Borrower expressly,

      (1) Acknowledges the Lender's Right to Accelerate the debt and the power of attorney given hereby to Lender to sell the premises by nonjudicial foreclosure upon default by borrower without any judicial hearing and without any notice other than such notice as is specifically required to be given under the provisions of said Deed to Secure Debt;

      (2)Waives all rights which Borrower may have under the Fifth and Fourteenth Amendments to the Constitution of the United States, the various several states, the Constitution of the State of Georgia, or by reason of any other applicable law, to NOTICE AND TO JUDICIAL HEARING prior to the exercise by the lender of the right or remedy herein provided to Lender, except such notice as is specifically required to be provided in said Deed to Secure Debt;

      (3)Acknowledges that Borrower has read this deed and its provisions have been fully explained to Borrower and Borrower has been afforded the opportunity to consult with counsel of Borrower's choice prior to executing this deed;

      (4)Acknowledges that all Waives of the aforesaid rights of Borrower Have Been Made Knowingly, Intentionally and Willingly by Borrower as part of a bargain for loan transaction;

      (5)Agrees that Borrower's right to notice shall be limited to those rights to notice provided by this deed and no other; and

      (6)Agrees the provisions hereof are incorporated and made part of the Deed to Secure Debt.

      DO NOT SIGN THIS FORM UNTIL YOU HAVE READ OR HAD IT READ TO YOU; AND UNTIL YOU FULLY UNDERSTAND ITS MEANING AND AGREE TO ITS TERMS.

      They gave a power of attorney to the mortgagor, leaving it to the lender to decide how to get his pound of flesh. It's not ethical. But, if a person consents to being abused, the law doesn't consider it abuse.

      We organize governments to deliver services and prevent abuse.

      by hannah on Tue May 07, 2013 at 02:34:30 AM PDT

      [ Parent ]

      •  Basic rule of law was violated in most states... (4+ / 0-)
        Recommended by:
        ericlewis0, MKinTN, orlbucfan, BradyB

        ...as many have noted. Georgia is not a good example of this greater truth. (I'm pretty certain you know that.)

        "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

        by bobswern on Tue May 07, 2013 at 05:19:54 AM PDT

        [ Parent ]

        •  The rule of law, in the mind of someone like (2+ / 0-)
          Recommended by:
          ericlewis0, MKinTN

          Justice Kennedy, is an impersonal dictator, codified discrimination and deprivation which is difficult, if not impossible, to challenge. Moreover, the reliance on process as a substitute for justice makes the rule of law an insurmountable impediment to the realization of human rights.
          The rule of law is supposed to prevent being ruled by arbitrary and capricious people. In reality, the law incorporates the deprivation of the rights of the just and the vile. Austerity gets applied equally across the board.
          This is not new. After all, Jesus Christ was executed according to the law of the Sanhedrin. Pontius Pilate washed his hands just as Rick Perry does in Texas.

          We organize governments to deliver services and prevent abuse.

          by hannah on Tue May 07, 2013 at 05:49:42 AM PDT

          [ Parent ]

          •  The practical pertinence of your comment... (2+ / 0-)
            Recommended by:
            ericlewis0, WB Reeves

            ...is questionable, since the rule of law (a state, as opposed to a federal issue) at the state level is what I'm referencing. That being said, federal bullshit tends to trump rule of law, wrongfully or otherwise--even when that federal bullshit is quite unjust--generally speaking, especially nowadays.

            I do appreciate form whereof you speak, however.

            Austerity is one thing. Conflating it with the rule of law is an effort mostly undertaken by the status quo (but, I think you know that, too). And, it should be challenged legally whenever possible (which is the case in this particular instance).

            "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

            by bobswern on Tue May 07, 2013 at 05:59:53 AM PDT

            [ Parent ]

      •  IANAL (2+ / 0-)
        Recommended by:
        bobswern, ericlewis0

        But I was under the impression that a contract that violates the law, even if you sign it, is not valid in court. So even if the fine print on the mortgage says you can't take the mortgager to court, the court doesn't consider that contract binding.

        I know that victims of Payday loan sharks have had courts nullify the contract precisely because the small print provisions were illegal.

        "YOPP!" --Horton Hears a Who

        by Reepicheep on Tue May 07, 2013 at 06:14:05 AM PDT

        [ Parent ]

        •  As it has been noted by many, the so-called... (4+ / 0-)
          Recommended by:
          ericlewis0, J M F, erush1345, Reepicheep

          ...49 Attorneys General mortgage settlement ended up being little more than a thinly-veiled effort to assert federal preemption of the rule of law at a state level. The facts remain that state AG's tried to reserve the right to act within their own states with regard to the matter. But, that's pretty much fizzled out before us. With Schneiderman's bluster, an little more than that--based upon historic facts in the brief two years he's been in office, where his bark has overruled his bit on a continuing basis--further indicating that's the extent of what we're witnessing now; an effort that will, much more than likely, end up generating, at best, little more than the legal equivalent of a traffic ticket on the TBTF's highway, while they continue  steamrolling the public down the road.

          "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

          by bobswern on Tue May 07, 2013 at 06:25:29 AM PDT

          [ Parent ]

    •  Heh (3+ / 0-)
      Recommended by:
      ericlewis0, BradyB, bobswern

      " (This Kossack is ignoring their ethical responsibility to disclose their professional bias, IMHO, as they did with me in one public comment in this community, just a few weeks ago.)"

      Hey Bob, you be nice to our D-list tax troll, he might have a sad!

      The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

      by ozsea1 on Tue May 07, 2013 at 10:41:22 AM PDT

      [ Parent ]

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