Prosecute Guppies; Let the Sharks Roam Free
Joe Nocera’s last column in today’s NYT (he moves to the OpEd pages) tells a simply ghastly tale of misplaced governmental priorities: In Prison for Taking a Liar Loan.
It tells the horror show story of how the IRS came across one of the 15 million liar loans written during the credit bubble.
An excerpt simply will not do it any justice — go read it in its entirety.
There are few things in the world more dangerous to Liberty than an overzealous prosecutor on a morality binge. I am surprised my Libertarian friends aren’t more outraged by what the banking sector has done to property rights and to governmental criminal priorities.
If only the tea party hadn’t become a subdivision of corporate America — they might have accomplished some worthwhile goals.
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March 26th, 2011 at 7:53 am
I’m not at all surprised.
I noticed that those prosecuted were a few peripheral players, a hindu for example, and prosecuted by a hindu I guess for appearance’s sake, no prejudice here! Mozillo gets off entirely.
And now, an ordinary person. See how Jacque Prévertish our law enforcers are? Not only is Engle imprisoned, but if you read the NYT every day, our law enforcing police continue to gun down blacks roughly a couple of times a week and never answer for it.
There is no difference between the crony capitalism of this country and that of China or Russia or India. None.
March 26th, 2011 at 8:08 am
Engle must have reminded Nordlander, the IRS agent, of someone who used to give him swirlies in high school which, from the sound of it, was probably everybody in his class.
Note to prosecutors/investigators: going after people like Engle does not increase your dick size, particularly when you don’t have the balls to go over the real players.
March 26th, 2011 at 8:17 am
This is a case of an out of control IRS agent who got his ego in the way of justice. Is there no adult supervision of these guys? He thought he had a case of something wrong with “unclean” income and when the answer was a clear no (previous years losses explained the low taxable income, and the lifestyle clearly showed a man trying to recover from previous losses). At this point a mature sensible agent close the case and move on to something worth spending the taxpayers money investigating. If he did not see that himself his supervisor should have explained it to him. It is understandable that immature agents can get personally attached and let their ego (the “I know there is something wrong with this person” trap) get in the way of sound spending of taxpayers money. Presumably both his supervisor and the prosecutor are meant to provide safety valves for such lack of professionalism. So the second failure in this case was that the prosecutor actually took this to court.
March 26th, 2011 at 8:33 am
Lesson. Don’t borrow money you have no intention of paying back.
Don’t artificially inflate markets with funds that aren’t yours.
Don’t try to play the “game” to the hilt and cry when the “game” bites you right in the keester.
I know this much, if I had “borrowed” Mr Mozillo’s money I would have repaid him. The borrowers are the true bad guys.
I don’t know why anybody still to this day doesn’t get this.
Blaming your inability to pay back the obligations you voluntarily undertook on market forces is a valid argument and yes there’s no debtor’s prison.
But the bank isn’t to blame. The Bank put up the Cashola. Nothing more. Nothing less. Next what you’ll want to go after the seller as well? How can the seller be held responsible for the buyer’s bad financial decisions?
March 26th, 2011 at 8:42 am
“. . . an overzealous prosecutor on a morality binge.”
________________
More like a power mad bureaucrat looking to lord over anyone he can. Seems the dude found a whipping boy. The rule of law is no more. The machine does not understand the distinction between prosecution and persecution. Get ready for much more of the same.
March 26th, 2011 at 8:45 am
Personally, I wouldn’t prosecute the guy. But then again, I’m too nice.
Unfortunately people on the OTHER side of the aisle would afford me the same leniency if they find themselves in a position to bargain . lol
March 26th, 2011 at 8:49 am
“If only the tea party hadn’t become a subdivision of corporate America” – the tea party was created as a subdivision by and for corporate America.
March 26th, 2011 at 8:52 am
budhak0n:
“I don’t know why anybody still to this day doesn’t get this.”
Maybe because it’s bullshit.
By your logic, the drug user — not the dealer, the manufacturer, or the smuggler — is the only criminal in the illicit drug trade.
The true bad guys are sitting on millions of dollars in fees, the underlying assets, and were complicit in tempting, encouraging, and suborning criminality. I sat in many settlements where EVERYBODY knew, long before any docs were signed, that the borrower couldn’t afford the loan that EVERYONE worked hard to rope him into.
I guess the borrowers enabled the lenders, ratings agencies, and everyone else involved in this end-to-end fraudfest. The poor rich guys got swindled by all of those ultra-sophisticated borrowers.
March 26th, 2011 at 8:53 am
The banks collected fees and got bailed out.
March 26th, 2011 at 8:54 am
Hey Petey. I know I didn’t benefit one iota from any of this nonsense.
So as a true “independent” , I can firmly and frankly state Scarlet….
“Frankly my dear, I don’t give a damn”.
Whatever deal you’ve made with the devil is your own.
March 26th, 2011 at 8:57 am
@DeDude: Well put.
Nordlander’s admission under oath that he arbitrarily ran tags and pulled returns of high-end car owners is absolutely appalling. There’s no reasonable suspicion there. The IRS is permitted to conduct audits based on non-arbitrary criteria, and is permitted to conduct random audits. But random selection is quite different from arbitrary selection.
Engle was convicted of a felony and is serving his time. But we cannot say “and rightly so” because the prosecutorial/investigatory disparities are so great and glaring. His broker received a shorter sentence as a reward for providing evidence against him. That is bass-ackward, like a mid-level dealer getting a shorter sentence for testifying against a junkie.
March 26th, 2011 at 9:07 am
Oh sorry Transor didn’t really delve too much into our subject because I figured there had to be a reason a prosecutor “picked” on him…
So the true story is this guy was pulling the credit of people who actually pay their bills in some type of fraud to try and make himself money out of all of this?
Gotcha. Makes more sense now.
March 26th, 2011 at 9:09 am
In my mind, the truly amazing thing about this case, is that out of 12 jurors not ONE decided to take a stand on this absurdity and refuse to convict. You have an IRS agent admitting that when he sees someone driving an expensive car he checks them out to make sure they can afford it. Instead of sending a message to our bought and paid for government that we will not tolerate this obliviously lopsided miscarriage of justice, 12 sheep toed the government line and empowered the next idiot bully prosecutor. We have been effectively neutered.
March 26th, 2011 at 9:25 am
budhak0n Says:
“Hey Petey. I know I didn’t benefit one iota from any of this nonsense.”
______________
Yet you seek to protect those who did. How faux-noble and pointless.
March 26th, 2011 at 9:30 am
I think America is more concerned to disturb other countries instead of focusing their internal issues. i think America is divided in 2 groups now like half from democrats and half from republicans.. I am afraid this may result in any sever internal disturbance..
March 26th, 2011 at 9:34 am
I’m not sure I can agree with a blanket statement that the borrowers are the bad guys. Our president ( Bush) said everyone should be a homeowner. The developers bought farmland and built McMansions and the banks suckered an awful lot of people into ” you’ve got to be kidding me” mortgages. And the owners would say that their mortgage were cool because the bank told them everything would be ok as long as they remortgaged in a certain time frame before all the larger amounts would kick in. Everybody wanted a piece of the pie, just like the rich folks. The house you live in became an even bigger status symbol than before. I had employees tell me they were applying for home equity loans and the lender would be calling for info. So I compiled all info, length of employment, job description, salary etc. Received ONE inquiry and all they wanted to know is if he worked for us. Business associates used inflated appraisals for their own home equity to buy excavating equipment. Yea, when you lose your house you can really fit your family comfortably in an excavator for the night. Some people were gullible, some just dumb and had faith in their bank. There is an old saying, “If you can’t run with the big dogs, then stay on the porch.” I think a lot of people risked their porches for that run.
March 26th, 2011 at 9:46 am
budhakon; Since you don’t seem to have time to read the facts before you bring out those judgmental comments, let me bring you up to speed on what this guy actually did. He confessed to an undercover agent to have taken out 2 liar loans getting his broker to write them with no problem. One of those liar loans actually stated his income correctly (so it was a liar loan but he didn’t lie). The other liar loan stated an absurd excessive income way beyond what had needed to be stated to actually get the loan – and it appeared to have been signed by someone else, since he claimed not to have signed it and analysis suggested that it had not been signed by him (so although he probably knew about the absurd income figure, he actually had not put his signature to it). For this crime, we the taxpayers are flipping a huge bill for prosecuting and then jailing him, while Mozilla get no jailtime and keep most of the money he stole from investors and taxpayers.
March 26th, 2011 at 10:11 am
You have to admit, the guy did tell one heck of a whopper:
““I had a couple of good liar loans out there, you know, which my mortgage broker didn’t mind writing down, you know, that I was making four hundred thousand grand a year when he knew I wasn’t.”
400,000 grand is a.k.a. $400,000,000.00 per year. Did they think this guy was running a hedge fund?
~~~
BR: Wetware defect! I went right by that and totally missed it
March 26th, 2011 at 10:13 am
Nordlander pulling returns of high end car owners reminds me of my being pulled over by a NY State trooper for not having a front license plate on my 10 year old, but still beautiful diesel truck. ( it got pulled off probably in a snow bank somewhere.) The trooper tells me that he and a couple of his trooper buddies like to ticket the rich NYC weekend guys with their expensive sport cars, because those guys don’t want to ruin the look of the cars with the front plate. He told me that they actually keep score of who writes the most tickets for that offense. Watch out Barry on your way to Lime Rock this summer.
March 26th, 2011 at 10:35 am
In criminal syndicate investigations/prosecutions, particularly those involving financial fraud, it’s traditional to start with the small fish and work your way up to the big fish but the evidence of the past few years says this Engle case is going nowhere further. A little hamburger to throw to the masses, no more.
March 26th, 2011 at 10:47 am
The Tea Party?
Oh yeah… I remember them…
…A GOP-funded front group that made lots of noise about how Obama rui9ned America … whose members got suckered by the uber rich who don’t want to pay any taxes …forced another $800B tax break and now want to shut down government over $50B. The angry white guys who got suckered by the uber rich again.
March 26th, 2011 at 10:57 am
@lariat1:
In talking about the macro level I’ll get on my legal high horse to argue a point but my everyday world is all about stories like yours with the trooper and the truck.
A couple of years ago my wife and I were on a date night in one of the towns surrounding Boston. Two young-ish motorcycle cops were standing in the street, eyeing passing cars like a couple of hard-asses. I made the mistake of maintaining firm eye contact with one of them as I drove by. He and his buddy watched as I made a U-turn literally 10 feet short of the zone where it was legal to do so. As I drove past them again, they flagged me to pull over.
I didn’t argue with the cop or wise off but everything about my body language and tone communicated that I knew the stop was chickenshit. The cop got sheepish and I ended up getting a warning. There are rules and there are rules. I think DeDude nailed it in his comment earlier. Something about this story yells immaturity and the lack of adult supervision.
March 26th, 2011 at 11:01 am
RW; no they are not going so well on working their way up, maybe because they cut the deal the other way. They let the mortgage pusher of light for testifying against the little liar loan addict.
March 26th, 2011 at 11:22 am
You can blow out a candle
But you can’t blow out a fire
Once the flames begin to catch
The wind will blow it higher
Oh Biko, Biko, because Biko
Yihla Moja, Yihla Moja
March 26th, 2011 at 11:30 am
“Whatever deal you’ve made with the devil is your own.”
Yes, but the beauty of these deals is that it has become your problem. If you can’t see that you are blind.
March 26th, 2011 at 11:44 am
@ Dedude,
I must commend you for Bringing Budhakon, up to speed. It is apparent he does not know or understand the facts of the case. However I must say our economy needs people like him, who have their heads buried in sand, devoid of any intellect. Only in America
March 26th, 2011 at 11:56 am
budhakon…as a reminder
How to Have a Rational Discussion
http://www.ritholtz.com/blog/2011/03/how-to-have-a-rational-discussion/
March 26th, 2011 at 12:28 pm
>> ““I had a couple of good liar loans out there, you know, which my mortgage broker didn’t mind
>> writing down, you know, that I was making four hundred thousand grand a year when he knew
>> I wasn’t.”
Per the article, on his applications Engle didn’t state he earned $400m/year. His statement here seems to sound like he’s exaggerating his actions for comedic effect.
March 26th, 2011 at 12:29 pm
For this crime, we the taxpayers are flipping a huge bill for prosecuting and then jailing him, while Mozilla get no jailtime and keep most of the money he stole from investors and taxpayers.
–
Which says it quite well . . . whatever one thinks of Charlie Engle’s crime – and it’s highly debatable as has been pointed out just what this was – the bigger issue is the zeal and focus on small fry like Charlie Engle while the big fish have mostly been allowed to swim away.
Incidentally, I think Robert Nordlander’s conduct in this issue ought to receive close scrutiny, certainly as much as Charlie Engle’s. This should include not only the method used for focusing on the case, but his over-the-top approach which I personally find totally outrageous. His conduct re: the grand jury should also be examined. For most people this is something that happens to someone else; if it happened to you, you might have to remind yourself what country you lived in.
March 26th, 2011 at 12:36 pm
budhakon, have you or any close friends/relatives earned a living in the finance, insurance, or real estate industries who participated in or benefited short-term from making loans like this during the past 10 years?
March 26th, 2011 at 12:56 pm
This wasn’t just one overzealous IRS agent on a self-initiated whacko mission. He obviously convinced his supervisors to authorize sending a pretty undercover investigator to lure the targeted liar loan felon into a social relationship until he incriminated himself. I hope he had sex with her before she sent him to prison.
In contrast, Mozillo publicly incriminated himself without prompting. I guess that merits leniency.
Speaking about sex, Michael Lewis devoted a chapter of his book, “The Big Short,” to the last major sub-prime mortgage conference held in Las Vegas just as the market began to inevitably blow itself up. He mentions one of the book’s main subjects overhearing a hung-over conference attendee joking about spending the previous night with a hooker who purchased four rental properties with sub-prime loans. Imagine the bank underwriter reviewing her liar loan mortgage application: Occupation – Stripper/Prostitute; Employer – Pimp; Income – $1,000/Date; Additional Income – Client Tips (negotiable) … Congratulations! You have been approved for a mortgage loan in the amount of …
March 26th, 2011 at 1:51 pm
Gosh, if only that investigator had worked for the SEC, he might have caught Madoff way back in 2004 or 05…
March 26th, 2011 at 2:11 pm
Surely, only a banker could attempt to defend the absurd priorities of the Justice Department.
But I don’t see the point of blaming the Tea Party. They’re more about limiting government spending than about banking regulations.
March 26th, 2011 at 3:55 pm
Wow. Did the Tea Party and libertarians suddenly take over the justice department and I didn’t get the memo?
Same story linked today by the biggest libertarian blogger of all under the heading “LAWS, LIKE TAXES, ARE FOR THE LITTLE PEOPLE”: http://pajamasmedia.com/instapundit/117485/
And here, the entire “for the little people” series, in case you think that’s some sort of aberration:
http://pajamasmedia.com/instapundit/?s=%22for+the+little+people%22
But please don’t let the facts get in the way of your blaming libertarians and the tea party for the crimes of democrats and republicans.
I guess I’ll probably have to start chronicling my “deleted by Ritholtz” comment series, huh?
March 26th, 2011 at 4:44 pm
The teaparty claims to believe that deregulation is the key to economic recovery. The entity that will benefit the most if such beliefs are made law are the corporations who caused the bubble and crash, who will continue to feed the country’s wealth to the top 1%, who then fund astroturf organizations based on bullshit. That could very well be happening now cough* Dick Armey *cough.
March 26th, 2011 at 4:46 pm
The teaparty is the propaganda division of corporate America.
March 26th, 2011 at 6:09 pm
Ahhh… the good old days of partnership banking, debtors prison, and gold standard.
Abandoning all three has made it much too easy to create money out of thin air… without work.
Our predicament today is a logical consequence and should be no surprise.
March 26th, 2011 at 6:36 pm
If the libertarians had been running the government, there would have been no Fannie or Freddie, no department of H.U.D., and for that matter, no Federal Reserve. And of course, no bailouts for anyone. In addition, Federal spending would probably be about 5% of GDP, the national debt would be non-existent, and there would be no unfunded liabilities.
Utopia, or hell, depending on your point of view.
March 26th, 2011 at 6:52 pm
budhak0n:
I don’t think you read the Nocera column in full, as BR asked.
Nocera all but says the borrower was guilty of nothing. The jury found that Engle was not guilty of giving false information to a bank! but found that he was guilty of mortgage fraud. The two jury conclusions swear at each other.
Nocera says Engle’s “confession” was of his mortgage broker’s sins, not of his own! And critical initials on the loan application are disowned by Engle, and even a government handwriting expert said the initials may have been forged. It was the mortgage broker who testified against Engle in return for a lenient sentence. To my eyes that was perjury suborned by the prosecutor.
This conviction must be thrown out.
March 26th, 2011 at 8:17 pm
BR: is there any evidence to “If only the tea party hadn’t become a subdivision of corporate America ” being fact or just opinion? Does that mean that if you look close enough at say: WMT, XOM, GE (yeah, right), JNJ, KO, PG, CHX you’ll find…a bunch of docile tea-partiers reporting to the REAL boss, some big shot CEO? c’mon, the tea partiers ARE mostly Rep’s (not all) and yes (horror!) conservative but that doesn’t automatically make them a subdivision of Corporate America. Here’s a fact: Corporate America IS a subdivision of the US Government, especially profitable Corporate America. Example: out of every dollar we pay at the pump, 17 cents go to various levels of Government (state sales taxes, income taxes, excise taxes), 8 to 10 cents to profits all ALL stages (from wellhead to your gas tank), rest is COST, mostly crude, most of it imported. Now, That’s a subdivision type connection! As to Nocera’s piece, after reading it what comes to mind is Kafka, Kafka, Kafka.
March 26th, 2011 at 11:50 pm
Well, ‘victor’ seems to be getting closer to the truth than his vulgar libertarian and tea party confreres but still reverses the scope of influence. Here’s the fact: The US Government IS a subdivision of Corporate America. Taxes are merely a percentage of the payoff, the vigorish, and corporate America don’t pay no stinking taxes unless they get a kickback. Capiche?
March 27th, 2011 at 2:08 am
You got it “RW”, now I understand: libertarians and tea partiers are vulgar (also an older lot, mostly white, just “little people” ) and Corporate America rules the world may be even the Universe, they probably even own China right? Then here’s comes GE, Obama’s darling, no taxes, all legal…
March 27th, 2011 at 3:06 am
The overzealozeness of the IRS reminds me that case of an IT guy who flew a private plane into an IRS building in Dallas last year because he couldn’t take it anymore. In all my dealings with IRS the IRS always conducted itself as a big bully , using debt collector tactics of intimidation and threat of financial ruin unnecessarily. Just one more reson to go to a flat tax system.
March 27th, 2011 at 7:21 am
The teaparty is a subdivision of the corporate cleptocracy because that is who they are serving. They are attacking the 1/4 of the total budget that is in the way of complete corporate power over everything and everybody. By leaving 3/4 of the total budget off the table they have made a joke off their stated goals of curtailing government spending (like those corporate idiots who think they can fix the economy without fixing the 70% of it that is the consumer). When they start talking about what taxes should be increased to close the gap between their 50-100 billion gobinment cuts and the 1400 billion deficit – then I will take them serious.
Libertarians are just a bunch of fools who live in an idealized version of a 200 year old society, where the reputation of a man or business actually would and could follow them, and where individuals had a realistic chance of collecting and understanding all the relevant information before a decision had to be made. Hard core libertarians are like an old horse buggy, sort of cute and interesting but not of any practical use on todays highways.
March 27th, 2011 at 7:47 am
All your wonderful arguments, although interesting and worth my time reading, still lead to the same result.
Your champion is in prison and the world goes on.
Believe me I’ve got some issues with some board members of some very wealthy corporations but I’ve done my venting and none of that has any bearing whatsoever on the future of my children.
I did not participate on the secured side therefore being the selfish pr*ck that I am , like I’ve said you make your own deal with the devil.
Believe you me I’ve got quite a few “deals” with the devil the average homeowner will never face so therefore my capacity for empathy in this situation is somewhat diminished in comparison to your average reader.
I still believe the borrower in any transaction they later wish to cancel is to blame. The onus is upon the person taking the time to submit the paperwork and ask for the money to know what kind of faustian bargain they are entering.
Trying to play revisionist history at the craps table because you busted out is an entertaining sideshow but the games go on.
Much better to dust yourself off and look ahead than to wallow in woulda, coulda, shoulda.
Just one A’s opinion.
March 27th, 2011 at 8:06 am
The real problem of 2008 is not in what happened in the past. It will arise in the dissemination of such concepts to the public at large and the myriad of unintended consequences that are sure to follow.
Stay safe out there. This mosh pit is getting a whole lot more interesting
March 27th, 2011 at 8:10 am
budhakon;
Oh so you are one of these “I got focked so the rest of the world should be focked too”
But you still have not bothered reading the piece. The guy is not complaining (nor is he jailed for) having been sucked into the housing bubble liar loan scam.
I have wasted enough time on you, come back when you learn to read the facts before you form an opinion. Letting the facts of the story get in the way of your narrative is not a problem, it will expand your narrow little world view and your mind.
March 27th, 2011 at 8:54 am
DeDude. I’ve read all there is to read. Listen up champ.
I didn’t get doinked at all. I did it all on my own. I didn’t borrow .
So if you went out and borrowed over your head and can’t pay it back. Go whine to your therapist. Leave the blogosphere to the adults.
March 27th, 2011 at 11:06 am
Please, stop it…..
If there was only one liar on a loan app, i’d say go gettum, but, everybody knows the banks “let” people lie on the loan apps, millions of people, the banks thought the real estate mkt would keep going up, so no risk… and they lied to the credit raters (ie. the whole thin file game – loans to people people with hardly any credit rating (ie fruit pickers) had a higher than average credit score because they had no credit history, the banks used these to jack up the average credit score of a tranche of mortgage debt (CDO) to get a higher credit rating from S&P et al – to sell it as AAA, not the sh*t it really was… so the banks gamed the system)
The banks made billions, paid huge bonuses to people who facilitated the liars (millions), then blew up and go bailed out (bonuses even trickle to people in unrelated areas i’m sure), they are now out of the business with 10′s of millions in the bank… (Howie Huber anyone, $9B trading loss)
How anyone from a major bank has any credibility anywhere is a mystery to me (and why they are not in jail….).
March 27th, 2011 at 2:28 pm
Tea Party??
What the hell are you guys (Barry included) talking about?? It is Obama’s Justice Department and SEC that are not prosecuting his major investors – er, campaign supporters. Let’s not lose sight of where the true corruption and injustice lies.
March 27th, 2011 at 2:55 pm
Speaking of the “Tea Party”, here’s a good quote which sums them up nicely:
“Federal taxes last year went down for 98 percent of people, but when asked about this, only 12 percent of the Teabaggers thought this was the case. 88 percent of them had it wrong. And a spokesman for the Teabaggers said, ‘We don’t want to just be taxed less. We want to be taxed less by a white guy.” –Bill Maher
March 27th, 2011 at 3:49 pm
I said it over two years ago and it still rings true: There’s a fairly simple solution to the real estate crisis…
http://kevintren.posterous.com/theres-a-fairly-simple-solutio
No liar loans.
March 27th, 2011 at 6:32 pm
Interesting case. I’m not a criminal attorney. I thought that a fraud conviction required every element to be proven: an intentional misstatement made for the purpose of getting the listener to act in a certain way, and the listener relying on the statement and changing behavior to his detriment. Did this happen here?
The listener was an agent of the bank, so the acts of the loan agent are attributed to the bank. Was the listener (loan agent) relying upon what Engle said? According to the story, no. Let’s set aside for the moment whether Engle actually made the statement — the evidence was unclear whether his writing was on the loan documents and the loan officer had falsified other loan documentation. Even if Engle wrote the document, the bank, through its agent, knew the facts were false and thus could not have relied. No reliance = no fraud.
There must be more to this story. The NYT is not known for thorough investigation.
March 28th, 2011 at 12:13 pm
[...] followed Barry Ritholtz’s post to read this story about mortgage fraud prosecution. Even accounting for the idea that the story [...]
March 28th, 2011 at 12:14 pm
“This is a case of an out of control IRS agent who got his ego in the way of justice.”
This is the case of impotent people who have been told they’ll never get the permission to go after the big guys, otherwise, they’ll be roasted by the powers that be.
So, what is one to do? Turn his/her rage toward a hapless victim. Even if the conduct of this IRS agent is cause for dismissal for cause and cannot be condoned in any way, shape or form, IRS people are people too; scapegoating will be done if possible.
Even far worse than that is the entire judicial apparatus who is accomplice of this scapegoating. Doesn’t that tell us something about their agenda?
March 28th, 2011 at 12:27 pm
What Harley Howard said.
The Obama administration has absolutely NO intention of going after the sharks…only the very small fry.
http://www.nakedcapitalism.com/2011/03/the-sandbagging-of-elizabeth-warren-and-49-state-attorneys-general.html
Except that it may backfire on him
http://www.nakedcapitalism.com/2011/03/repudiation-to-team-obama-several-democratic-ags-to-withdraw-from-proposed-mortgage-fraud-settlement.html
But the thing is, corruption is running rather deep around DC. Here’s one story among many:
http://my.firedoglake.com/masaccio/2011/03/15/fha-commissioner-david-stevens-cannot-serve-two-masters-fire-him-immediately/
http://www.washingtonpost.com/blogs/political-economy/post/fha-commissioner-david-stevens-to-head-mortgage-bankers-association/2011/03/15/AB6TBMX_blog.html
which Yves Smith expended upon in detail here:
http://www.nakedcapitalism.com/2011/03/sleaze-watch-ny-fed-official-responsible-for-aig-loans-joins-aig-shortly-before-aig-pitches-sweetheart-repurchase-to-ny-fed.html
However, note that Administration AND Congress will fight fraud perpetrated against those who can either lobby or defend themselves, but not those who need protection the most.
http://www.nakedcapitalism.com/2011/03/administration-acts-on-mortgage-fraud-against-military-denies-it-exists-anywhere-else.html
Therefore, the Tea Party relevance in all this is dubious. Even if they had come out in force against all this fraud at the beginning, there is nothing they would’ve been able to do…because their corporate backers would’ve dumped them so fast!