Dear Leader's latest election-year lie: mortage fraud non-settlement

Turns out, as I predicted when the latest mortgage fraud "settlement" was announced a month or two ago, that the "fraud" was as much in the alleged "settlement" as anything. Via Truthout, Naked Capitalism has the details, including lack of staffing and total lack of people with inside-the-Beltway titles being involved. When you get the telephone runaround, you know that you don't matter.

And, yes, also per the story, New York's AG deserves opprobrium for lending his name, and desire for 15 minutes of fame, to this bullshit in the first place. But not just Eric Schneiderman. California's AG, Kamela Harris, already touted as a rising Democratic star, decided part of her star being burnished was to look tough, then sign off on the same apparently toothless bottom line.

Trust me, you're going to see more, and more blatant stuff like this up to November. And, when it's pointed out, either enthusiastic or sadly resigned Obamiacs will challenge this, and challenge the idea of voting Green.

As for the reality of what will be done? Very little. When you still have such a robosigning mess that Bank of America sues itself, as does Wells Fargo, the banksters will first work on straightening the paper trail, then second address real foreclosures that make themselves more available. Third, between the first two things, they'll offer moderately more sweetened crumbs than before for refinancing, and pay money to state government coffers which the likes of Schneiderman and Harris will use to further buff their reputations.

A "shifting" of positions on Keystone XL is coming next, in all likelihood. Possible modification of some EPA rules might come after that. 

Meh on the mortgage deal - updated?

Here's the bottom line on the deal between the U.S. and various states on one side and the five biggest mortgage processors on the other, basically:

1. If you've already been foreclosed, you won't get much help;
2. If the FHA, Fannie or Freddie owns your mortgage, you don't qualify;
3. If your mortgage is held by a private investor, i.e., it's been securitized, you don't qualify.

So, this won't help a whole lot of people.

And, this modicum of help, by itself, spread out over three years, will likely only move the housing market from anemic to just bleah. Psychologically, it remains to be seen how much this boosts confidence levels among consumers looking for homes, or banks looking to lend.

Finally, in yet another example of Dear Leader's looking forward, not backward, it's not much more than a slap on the wrist for those big five.

Update: Michael Hiltzik, the excellent columnist and reporter for the L.A. Times, weighs in on just how good the deal is for the banks. And, even more, for the politicians:

I believe the technical term for all this is "big whoop." The provisions mostly require mortgage lenders and servicers to comply with what I would have thought was already the law, which prohibits, you know, criminal fraud. The rest is pretty much out of the best-practices manual of customer service, which benefits both the customer and the institution.

What the standards do accomplish is to expose how sad our enforcement of the law has been up to now, and how hard it will be to enforce it in the future if this is the best we can do in the face of manifestly illegal behavior. The lesson is: Break the law, and the full weight of the state and federal governments will come down on your head to make you agree not to break the law — in the future.

It may not be long before the euphoria over the settlement evaporates in the realization that the banks that made a travesty of the mortgage market are still getting a pass — not only on their cupidity in making loans to unqualified buyers, but in magnifying their cupidity through forgery, lies and the other building blocks of foreclosure fraud.

Not much more to say than that, is there?

I expected the bullshit from Dear Leader, but, to see state AGs who were reportedly "hanging tough" to cave like this is dreck.

Are the banksters starting to feel some heat?

Judging by a new-found willingness to do short sales rather than foreclosures, htey're either feeling more heat from a proposed tougher settlement on mortgage fraud, getting some financial brains that this actually helps them, or a bit of both.



I personally think it's more feeling the heat than financial brains. And, right now, these aren't much more than pilot programs, and not yet well thought out or well targeted. So, don't get too excited yet.

Mortgage deal near? Is it maybe a good one?

The fact that California and New York AGs are both participating in the federal deal with banksters again, and are getting concessions from Team Obama's negotiators to get tougher with the big banks. It sounds tentatively hopeful. But, let's wait until the dotted lines are signed before we get jubilant.

But, here's the biggie:

California has been focused on measures that would benefit individual homeowners, while New York has been most interested in preserving its ability to investigate the root causes of the financial collapse. 

If we get more of both of these, then we're cooking with a little bit of gas.

The first is very important, given how much the banksters took in subprime mortgages, alphabet soup derivatives and more.

Obama - looking backward or head fake on mortgages?

I vote for "head fake" on Dear Leader's announcement about a major new investigation into the mortgage fradu behind (in part) the subprime bubble.

After all, just earlier this week, his administration was trying to still,/again browbeat state AGs into accepting a slap-on-the-wrist deal with banksters on the robosigning and related issues.

Add in an election-year pseudopopulism push, and it's easy to see where this is coming from.

Team Obama playing rough on mortgage deal

The White House's announcing that a mortgage fraud deal between state attorney generals and mortgage bankers is just around the corner isn't premature. Rather, it seems to be a deliberate pressure tactic to get many state AGs to sign off on a deal they think is still too lenient ... to much too lenient.

And, it is.


None of the strongest AG opponents was at the White House's Hooverite press conference.


And, yes, "a solution is just around the corner" is in part Hooverite.  In addition to being heavy-handed.

And, it's "looking forward" instead of backward, too.

Robofiling gets sued

More than the Nevada attorney general's lawsuit a few weeks ago, which indicted two people for robo-signing, the rubber is now really hitting the road.

Massachusetts AG Martha Coakley has sued not only five lenders, but MERS, the robo-signing agency for all the big lenders. And, on expected grounds: MERS violates state law on paper trails for mortgages and related issues. 


And, there's bigger issues yet behind all of this:

Officials at all of the banks issued statements saying they would fight the suit. Most of them also indicated dismay that Massachusetts had taken action during negotiations to reach a settlement over the types of practices highlighted in the case.

“We are disappointed that Massachusetts would take this action now,” said Tom Kelly, a Chase spokesman, “when negotiations are ongoing with the attorneys general and the federal government on a broader settlement that could bring immediate relief to Massachusetts borrowers rather than years of contested legal proceedings.”

Lawrence Grayson, a Bank of America spokesman, said: “We continue to believe that collaborative resolution rather than continued litigation will most quickly heal the housing market and help drive economic recovery.”

And Vickee Adams of Wells Fargo said, “Regrettably, the action announced in Massachusetts today will do little to help Massachusetts homeowners or the recovery of the housing economy in the Commonwealth.”

But as Ms. Coakley made clear during the news conference, her office had come to view as unacceptable the negotiating stance taken by the banks in the protracted settlement talks.

“When those negotiations began over a year ago, I was hopeful that we would be able to reach a strong and effective solution,” she said. “It is over a year later and I believe the banks have failed to offer meaningful relief to homeowners.” 

So, now, the first AG, more than in Nevada, is breaking ranks from settlement talks. It's clear banks are hoping two things:
1. Campaign cash for Obama (or Romney, or both) and high-dollar-level electoral politics, will get the feds to push harder on a mortgage issues settlement that favors big and predatory lenders.
2. They can run out the clock on some things, on statutes of limitations, and probably "scrub up and clean up" on others.

And, even if Coakley ran a lame Senate campaign in 2010, she now has become, for now, at least, the biggest political player in 2012.

Read and parse carefully words by Obama substitutes on this issue, including which substitutes he chooses before speaking himself.

Meanwhile, we've had the first fallout. GMAC is abandoning any new MERS-based mortgages in the state and other "brokered" mortgages, which Massachusetts (rightly) calls an admission.

American exceptionalism on decline? Maybe, maybe not

The New York Times columnist Charles Blow has a good column about American exceptionlism and its possible decline. He notes that a Pew poll had just 49 percent of respondents saying the U.S. was "exceptional." Among those aged 18-29, the percent saying America was exceptional was less than their counterparts in Germany, Spain and Britain.

Unfortunately, two kinder, gentler neocons, Reuel Marc Gerecht and Mark Dubowitz, seemed to have missed the message vis-a-vis Iran. The duo is kinder and gentler because they aren't calling for nuking the shit out of Iran, but for "smarter sanctions."
Here's where they still indulge in American exceptionalism -- claiming that we can dictate the terms of future sanctions against Iran.

Meanwhile, despite neocons' general claims to be about a New World Morality, this duo is willing to co-opt China:

(W)e should allow companies from countries that have little interest in Iran’s nuclear program, or its pro-democracy Green Movement, and that are willing to risk their access to American markets — mainly Chinese companies — to continue buying Iranian crude in whatever quantity they desire.

First, how this would be smarter sanctions, I don't know, even with this claim:

This would reduce the number of buyers of Iranian petroleum, without reducing the quantity of oil on the market. With fewer buyers to compete with, the Chinese companies would have significant negotiating leverage with which to extract discounts from Tehran. The government could lose out on tens of billions of dollars in oil revenue, loosening its hold on power. 

In case the Iraq War didn't make it clear, this should. Neocons are generally DUMB as well as amoral. (That's the subject of another post.

That said, the narrow-minded focus on U.S. oil prices the duo betrays is an example of American exceptionalism, namely that we can opt out of world marketplaces just because we say so. Behind that is the American exceptionalist idea that we can lead China around by the nose. That wasn't true when neocons were dumb enough to push to invade Iraq in 2003 and it certainly isn't true now.

UPDATE, Nov. 21: Here's the reality of the U.S.'s cobbled-together sanctions, world opposition to them included.
More proof that American exceptionalism is alive and well? Business immorality, your latest example coming courtesy of the Baum law firm in Buffalo.

Remember the mortgage foreclosure law firm in Buffalo? The one with the Halloween party about coming dressed as your favorite foreclosed tenant? Yeah, THAT Baum law firm, Steven J. Baum PC. Well, now, it's picking a fight with the NYT columnist who helped publicize its evil:

“There is blood on your hands for this one, Joe,” (Steven J. Baum) wrote at the end of that second e-mail. “I will never, ever forgive you for this.” 

But, per New York mayor Michael Bloomberg, people like this, as well as Wall Street bankers, had nothing to do with our financial meltdown.

There's the next part of American exceptionalism that's still alive and well. I think that, in much of the world, even the developed democratic world, politicians expect the public expects they're lying much of the time. In America, land of moral self-righteousness, many politicians still think the public actually believes them.

Finally, when American companies that may support SOPA complain about Chinese web censorship, we now have American exceptionalism entering the online world.

The #robosigning dam on mortgage fraud may be breaking

The Nevada AG's office has indicted two people for more than 600 charges of robosigning:

A Clark County District Court judge issued warrants for California residents Gary Randall Trafford, 49, and Geraldine Ann Sheppard, 62, after a grand jury handed up the 439-page indictment. Their hometowns were unavailable, and they could not be immediately located for comment.

The indictment says that between 2005 and 2008, Trafford and Sheppard directed employees to forge their names on foreclosure documents, then notarize the signatures they just forged. The defendants then had the employees file the fraudulent notices of default with the county recorder's office to begin foreclosures on homes.

Trafford and Sheppard face more than 200 felony charges of offering a false instrument and false certification of an instrument, and more than 100 misdemeanor notarization charges, Attorney General Catherine Cortez Masto said.

This is BIG. The feds (that's YOU, Dear Leader) and the big banks have been, well, co-conspirators in trying to ram a mortgage reset agreement down states' throats, and it looks like one state, at least, may be getting tired.

Michigan's started down the criminal proceedings road, too, but nothing like this. And, California AG Kamela Harris has now subpoenaed Fannie and Freddie officials. She's already refused to sign off on Team Obama's cramdown-for-states "negotiations" with the banksters.

Now, technically, this isn't robosigning, as in using autopens, etc., or doing computerized filing instead of paper documents, but, this is a warning shot about that, at least.

Given how both mainstream parties colluded in this fraud, let's see if, like Occupy Wall Street, this becomes a hot potato/hand grenade, and how much of one.

Part of that will depend on whom the GOP nominates. If it's Romney, Obama will have the tough choice of either sucking up to Wall Street even harder than he is now, or tacking/pandering further "left" while trying to sound both more truthful and more convincing about this than before.

Most other GOP candidates? Given that Cain is too nuts to be trusted by Wall Street, and Perry, Bachmann and Paul have all pledged to junk the Fed and to let too big to fail banks ... fail. Gingrich might get a fair cut of Wall Street money, but, I'm not sure tea partiers trust him as much as Bachmann, or even Paul, despite his apostasy on foreign policy. Huntsman, Santorum and Johnson aren't going to get the nomination.

And, since no GOP primary before April 1 can be winner-take-all, there's plenty of reason for every wingnut candidate to hang in there. Especially since "Super Tuesday," which was in February in 2008, will be in March this year. I'll come back to this point as the Iowa caucuses get near, then we get past that and approach the New Hampshire primary.