Top Five Banks Pay $25 Billion for Legal Immunity from Foreclosure Fraud

[Correction]

this is a really dumb thing to say tbh

Yes, preferring the rule of law to the allmighty dollar is really dumb.

[Andalusian girls]

rule of law ain't gonna help me snag a next generation ipad

[BaneTheBrawler]

Neither is an $1800 check, since you'll likely have larger concerns, such as finding a place to sleep where rats don't try to eat you.

[Kurokikaze]

this is a really dumb thing to say tbh

Yes because allowing people to pay their way out of robbing the public is totally cool...

I'd much rather see some CEOs get arrested and hefty sentences handed out. Otherwise we're basically telling these guys that it's ok if it happens again. They can get bailed out then handed another get out of jail free card. An example must be set.

Why don't we have Texas execute a bank since corporations are people? lol

[solanis]

you can have

1. a lengthy trial that will likely go fucking nowhere
2. 25 billion dollars

doesn't take a genius to figure out the better option from both a logical and ethical standpoint

[Talint]

you can have

1. a lengthy trial that will likely go fucking nowhere
2. 25 billion dollars

doesn't take a genius to figure out the better option from both a logical and ethical standpoint

Logical? Perhaps. Ethical? Couldn't be farther from it. Don't be so dismissive.

Congressional investigating hearings and all that jazz. If they didn't already own congress, then it would be worth seeing these guys put on trial.

[Demosthenes11]

allowing someone to pay their way out of justice is ethical now? wtf

[Tyche]

allowing someone to pay their way out of justice is ethical now? wtf

There's a reason that blind lady justice is holding a scale and it sure as hell ain't balance. People have been buying their way out of justice for centuries.

[Tyche]

The only real problem I have with this deal is that, I'm speculating here' no hard numbers, a large number of those foreclosed on prematurely without a chance to refi probably had to file for bankruptcy on top of the foreclosure. That fucks up much more of their life other than losing their house and ruining their credit for years. $1800 doesn't scratch the surface of cleaning that mess. However, I'm not sure what a Class action suit will do to help them either. They won't get their house back, bankruptcy has done its damage, maybe they squeeze a little more than $1800, I don't know. Lowering principles on underwater houses is going to add some fluidity to the housing market (pun intended) and that's certainly going to help a sector that's desperately trying to rebound right now.

[Correction]

1. a legal system that protects consumers
2. a legal system that protects share prices for corporations

I know it's fun for rich people to look down on plebes who want a fair world but could you do it a little less on this board?

[Kurokikaze]

So we shall start a new bureau to handle these matters... We'll call it: The Department of Wrist Slaps.

They and only they will be capable of handling the law-breaking done by those with lots of money. Department of Justice for the rest of you broke motherfuckers.

[Francisco]

I too, do not like this deal. Why can't we have our cake and eat it too?

Look, the banks aren't stupid. If they're willing to pay out $25B to avoid prosecution and investigations, they've got a lot to hide - and they know it.

These are executives paying out money that isn't theirs, to save their own asses.

Two things should happen here...

a) Everything, everything, everything that is relevant to this whole fiasco should be gone through like it's a prison cell shake down. Use whatever you can to prosecute the scrub bastards. No white collar facilities. No house arrests. Throw the fuckers in regular murderer/rapist prison.

b) Class action lawsuits, against all of these major banks. Take back every cent possible. Foreclosure fraud victims should sue. Taxpayers should sue. The government should sue. Sue the fuck out of 'em.

[Moridam]

Is this the supposed 50-state AG settlement? They've been "weeks away from reaching a deal" for like a year now, meanwhile half a dozen AG's have backed out of the talks. Off the top of my head, Massachusetts, New York, California, Nevada, and Delaware walked away from the negotiations within the last 3-4 months, and there's probably a few more.

edit- yeah it is, i guess i should have finished reading the OP, haha.

[djzombie]

Look, the banks aren't stupid. If they're willing to pay out $25B to avoid prosecution and investigations, they've got a lot to hide - and they know it.

These are executives paying out money that isn't theirs, to save their own asses.

Two things should happen here...

a) Everything, everything, everything that is relevant to this whole fiasco should be gone through like it's a prison cell shake down. Use whatever you can to prosecute the scrub bastards. No white collar facilities. No house arrests. Throw the fuckers in regular murderer/rapist prison.

b) Class action lawsuits, against all of these major banks. Take back every cent possible. Foreclosure fraud victims should sue. Taxpayers should sue. The government should sue. Sue the fuck out of 'em.

This... 1000 times this.

And I lol'ed hard at murderer/rapist prison.

[Moridam]

If you click through, there's a boatload of links embedded for additional/related info on this whole mess.

http://www.nakedcapitalism.com/2012/...ment-deal.html

Is Schneiderman Selling Out? Joins Federal Committee That Looks Designed to Undermine AGs Against Mortgage Settlement Deal

New York Attorney General Eric Schneiderman has been celebrated as the progressive Great White Hope. But the danger of assuming leadership is that individual becomes a target both of attacks and of seduction. And while I’d like to think better of Schneiderman, an announcement earlier this evening has strong hallmarks of Schneiderman falling prey to the combined pressures and blandishments of the Administration and its allies.

Only a sketchy bit of news has been released, with the most extensive reporting so far coming in Huffington Post which incorrectly anticipated a State of the Union announcement of the fact that Schneiderman will be co-chairing a Federal committee to investigate mortgage abuses (the story appears to have been confirmed in general terms via an announcement from Schneiderman’s office). Key details from the HuffPo story:

"The unit will not supersede the efforts already underway by the Department of Justice. Instead, it will operate as part of the president’s Financial Fraud Enforcement Task Force. In addition to Schneiderman, the unit will be co-chaired by Lanny Breuer, assistant attorney general at the Criminal Division of the Department of Justice, Robert Khuzami, director of enforcement at the SEC; John Walsh, a U.S. attorney in Colorado, and Tony West, assistant attorney general in the Civil Division at DOJ."

So get this: this is a committee that will “investigate.” The co-chair, Lanny Breuer, along with DoJ chief Eric Holder, hail from white shoe Washington law firm Covington & Burling, which has deep ties to the financial services industry. Even if they did not work directly for clients in the mortgage business, they come from a firm known for its deep political and regulatory connections (for instance: Gene Ludwig, the Covington partner I engaged for some complicated regulatory work when I was at Sumitomo Bank, later became head of the OCC). We’ve written at length on how the OCC is such a shameless tout for the banking industry that it cannot properly be called a regulator. Similarly, the SEC has been virtually absent from the mortgage beat, no doubt because its enforcement chief, Robert Khuzami, was general counsel to the fixed income department at Deutsche Bank. That area included the trading operation under Greg Lippmann who we have described as Patient Zero of so called mezz CDOs, or to the layperson, toxic mortgage paper that kept the subprime bubble going well beyond its sell date. And we don’t need to say much about the DoJ. It has been missing in action during this entire Administration.

Neil Barofsky, former prosecutor and head of SIGTARP, doesn’t buy the logic of this committee either:

A lot of soi-disant liberal groups have fallen in line with Obama messaging, which was the plan (I already have the predictable congratulatory Move On e-mail in my inbox). Let’s get real. The wee problem is that this committee looks like yet another bit of theater for the Administration to pretend, yet again, that it is Doing Something, while scoring a twofer by getting Schneiderman, who has been a pretty effective opponent, hobbled.

If you wanted a real investigation, you get a real independent investigator, with a real budget and staffing, and turn him loose. We had the FCIC which had a lot of hearings and produced a readable book that said everyone was responsible for the mortgage crisis, which was tantamount to saying no one was responsible. We even had an eleven-regulator Foreclosure Task Force that looked at 2800 loan files (and a mere 100 foreclosures) and found nothing very much wrong.

Now we have a committee full of people who have made numerous statements in the media and to Congressional committee minimizing the severity of the mortgage mess. Are were to believe they all had a conversion experience on the eve of the State of the Union address? But apparently the members of what passes for the left are prepared to take “investigation” at face value since it would be unpleasant to consider the possibility that they are being snookered again.

And it seems awfully plausible that the aim of getting Schneiderman on board with an Administration “investigation” is to undermine the effort by 15 Democrat attorneys general to devise their own strategy for dealing with mortgage abuses. We’ve heard reports privately that some of the defecting AGs are in a panic.

Put it another way: one thing that would convince me that this committee was serious was if the settlement pact was put on hold until the investigation were completed. The fact that the settlement push is in high gear is yet more proof that this committee is yet another bit of regulatory/enforcement theater, just like the Foreclosure Task Force, or the servicer consent decrees (confirmed as an embarrassment via the use of badly conflicted “consultants”), or the current OCC investigation into foreclosure abuses, which excludes all sorts of injuries inflicted upon homeowners, most notably servicer fees abuses and misapplication of payments.

And another indicator that the Administration is using every tool at its disposal to put pressure on the dissenting AGs: the Center for Responsible Lending has given a not terribly enthusiastic endorsement of the settlement pact. Why should this not be taken at face value? While the CRL has done some good work in the consumer lending space, anything it does in the mortgage arena should be viewed skeptically. The Center received a large grant from hedge fund manager John Paulson, who is famous for having made a fortune shorting subprime (readers of ECONNED will remember how we demonstrated that subprime shorts that used CDOs, as Paulson sometimes did, played a direct role in turning what would have been a contained subprime bubble into a global financial crisis). And most important, Paulson has been a vociferous opponent of investigations and policies to promote mortgage modifications. Remember, as we discussed when the Roosevelt Institute accepted money from the Peterson Foundation and then repudiated FDR’s legacy by publishing policy papers on how to “reform” entitlements, the real prize for the neoliberals is to get trusted progressive organizations to do their dirty work.

It’s clear what the Administration is getting from getting Schneiderman aligned with them. It is much less clear why Schneiderman is signing up. He can investigate and prosecute NOW. He has subpoena powers, staff, and the Martin Act. He doesn’t need to join a Federal committee to get permission to do his job. And this is true for ALL the others agencies represented on this committee. They have investigative and enforcement powers they have chosen not to use. So we are supposed to believe that a group, ex Schneiderman, that has been remarkably complacent, will suddenly get religion on the mortgage front because they are all in a room and Schneiderman is a co-chair?

Maybe Schneiderman has convinced himself that he will get more reach or resources this way, but I have trouble fathoming the logic. While he did do a real service by begin the first to question the AG settlement when that was a isolated and courageous position, and was also early to crank up investigations, other less well resourced states (Delaware, Nevada, Massachuseetts) that started later have filed serious cases. In particular, Catherine Cortez Masto of Nevada has been doing old fashioned, go-after-the-foot-soldiers-to-get-the-capos prosecutions of the sort Eliot Spitzer recommended in Inside Job. Why has Schneiderman, after such a promising start, done so little?

Maybe Schneiderman has fallen for the same sort of pitch that the Administration used on Elizabeth Warren. But the tradeoffs were completely different for her. The CFPB was her baby; giving her the chance to set it up was terribly seductive. And she could convince herself that she’d have more power as an insider than running a shadow CFPB out of Harvard to keep the real one honest. But Schneiderman already has a real power base and media reach. It’s hard to see what the Administration could offer him to get him to compromise his independence (which this effort will, no matter what he has convinced himself).

It would appear big aim of setting up this committee (and the uncertainty as to whether Schneiderman is now going to join the settlement deal) is to create disarray among the dissenting AGs. I’m sure it is no coincidence that there is a conference call scheduled for 11:00 AM tomorrow among the Democratic AGs. Delaware’s Biden as of Tuesday afternoon said he was not supporting a settlement, and there is good reason to think at least Masto of Nevada, who has been the most aggressive so far, will hold firm.

It would be better if I were proven wrong, but this looks to be yet another clever Obama gambit to neutralize his opposition. With all the same key actors in place – Geithner, Walsh, Holder – there is no reason to believe the Administration has had a change of heart until there is compelling evidence otherwise.

[solanis]

the problem with your logic is that banks and lobbyists are smarter than regulators and politicians. your proposed witch hunt would result in absolutely fucking nothing. so you can have the empty promise of ~justice~ that will amount to nothing, or you can have 25 billion dollars. picking the empty trials is, in my opinion, unethical.

[Kurokikaze]

Unethical to enforce the law. You so silly. lulz.

[solanis]

yes, it's unethical to choose an arbitrary set of legislation for the sake of principles when the alternative is 25 billion that could actually help people. you are advocating actively denying people help when you think it's more important to have a trial that will result in nothing than to have actual results directly. you so silly boo

[BaneTheBrawler]

Unethical to enforce the law. You so silly. lulz.

This.

[Talint]

yes, it's unethical to choose an arbitrary set of legislation for the sake of principles when the alternative is 25 billion that could actually help people. you are advocating actively denying people help when you think it's more important to have a trial that will result in nothing than to have actual results directly. you so silly boo

It sounds like a big point of contention is that you think they didn't break the law.

All you have to do is get one of the congressional committees to start issuing subpoenas and forcing people to start testifying. About everything. The moment someone lies or an inconsistency is found, you start throwing around criminal charges like they were jelly beans.

It's how the republicans tried to impeach Bill Clinton. And unlike that scenario, people aren't going to readily empathize with the bank CEOs and other executives like they are the president. If Congress had the balls to, this would have been done years ago. But everybody is looking out for themselves, and the best way to do that is to piss nobody off.