If ever you need as an illustration why bank bailouts are such a misguided idea, one need look no further than Fraudclosure and RoboSigning. The sunk cost of the bailouts have completely skewed government officials priorities. Hence, enforcement of laws and imposing criminal penalties has become verbotten, as it undercuts the prior monies.

Why do I suspect that the hand of former NY Fed president and current Treasury Secretary Timothy Geithner is behind this?

So far, only Attorneys General in six five states have questioned the rush to settlement before full investigations have been completed. In addition to California, the AGs in Delaware, Massachusetts, Nevada and New York are raising questions about any settlement prior to a full and thorough accounting of exactly how such massive illegality took place at the nations’ largest banking institutions and law firms. Florida’s prior AG was actively investigating fraudclosure, but the new AG, Pam Bondi, has apparently sold her soul to the notorious Lender Processing Service. She fired the Fraudclosure investigators, and I continue to search for evidence she is not corrupt public official, more or less in vain.

Regardless, the banks are hoping to head off further investigations by writing a check in amounts between $18-25 billion dollars.

“Bank representatives and government officials are working on a broad settlement of most state and federal foreclosure-practices investigations that could move forward without the participation of California, long considered a key to any deal, people familiar with the negotiations said.

The terms of the deal remain fluid. Banks have proposed a deal excluding California that would carry a value of $18.5 billion, though the final outcome remains uncertain, people familiar with the discussion said.

Negotiators are continuing to make a push to persuade California to join a settlement valued at $25 billion among federal officials, state attorneys general and the nation’s five largest mortgage servicers: Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. The talks center on the banks’ use of “robo-signing,” in which employees approved legal documents without proper review, and other questionable foreclosure practices.

The dollar value would include the value of principal write-downs, interest-rate reductions and other benefits to homeowners as well as cash penalties.

But negotiators now are discussing how to structure an agreement if California remains on the sidelines. Until recently, it seemed unlikely that a settlement would be possible without the participation of California Attorney General Kamala D. Harris. She left the discussions in late September, calling the deal then on the table inadequate. The state accounted for 13.1% of all mortgages outstanding at the end of September and 10.8% of all loans in foreclosure, according to the Mortgage Bankers Association.”

California has two million+ underwater homes, according to CoreLogic.

>

Previously:
Florida Attorney General Report on Fraudclosure (January 2011)

The Foreclosure Zoo (November 2010)

Source:
Foreclosure Talks Push Ahead Absent California
RUTH SIMON And NICK TIMIRAOS
WSJ, November 23, 2011  
http://online.wsj.com/article/SB10001424052970203710704577054550234461744.html

See also:
Florida Asst AG Andrew Spark Scathing Memo

Assistant attorney general resigns after memo blasting Florida AG’s office

Category: Bailouts, Foreclosures, Legal, Real Estate, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

34 Responses to “Banks Pressing for Foreclosure Settlement Before Investigation”

  1. amboycharlie says:

    I remember back when I was in grade school, a place where my classmates, and the teachers, too, had ancestors who “accomplished things in life,” one of the lessons I distinctly remember was “never borrow short and lend long.” It was followed by an explanation of yield curves and such that I didn’t have the background to understand, but the consequences I did understand. The fact that it was the only lesson I ever got in finance made it a pretty significant one.

    It seems to me that the present crisis is what happens when you do that, particularly when you are leveraged out at forty to one. It doesn’t take much of a yield curve inversion to cause you to lose all your capital when the margin calls come in.

    It a wonder these “masters of the universe” never learned that lesson.

    http://bonalibro.us

  2. rktbrkr says:

    Is Too Big to Prosecute one off from Too Big To Fail?

  3. SOP says:

    Thank you Barry.

    Not to worry though – the FBI is on the case:

    FBI warns of mortgage fraud ‘epidemic’

    http://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAW

    …. ah, sorry, just noticed that was from 2004…

    Does anyone know who owns the FBI now ? Did they merge with one of the big banks – or are they now a branch of the federal reserve?

  4. Petey Wheatstraw says:

    The Rule of Law shows up for Thanksgiving dinner and is given the bum’s rush to the back alley.

  5. Petey Wheatstraw says:

    SOP:

    Apparently, the FBI’s primary function, nowadays, is to find mentally retarded, dark-skinned men they can entrap into becoming threats to National Security. It’s an important job (if you want to keep 51% of the People distracted, scared, and vindictive).

  6. Thatguy says:

    This soft peddling of what the banks have actually done is ridiculous.

    “The talks center on the banks’ use of “robo-signing,” in which employees approved legal documents without proper review, and other questionable foreclosure practices.”

    They aren’t questionable practices…. they are illegal. Robo-signing is illegal and a fraud upon the court based on the rule of law definitions. Nothing controversial about it. It’s ILLEGAL. Thank you corporate media.

  7. Winston Munn says:

    Perhaps Eric Holder was absent the day they taught law at law school?

  8. this..

    “…The sunk cost of the bailouts have completely skewed government officials priorities. Hence, enforcement of laws and imposing criminal penalties has become verbotten, as it undercuts the prior monies…”

    is some highly Questionable A*******/B*******.

    it, certainly, does not follow, necessarily, from what is *known..

    Who said that the “Taxpayor’s” Funds were considered important?

    Why do We believe that the Congress feels any Fiduciary obligation to the, same, “Taxpayor”?

    Why do We believe that ~”the protection of the ‘Banks’” wasn’t the Goal, all along?

    and, really, if it was, this Action is, just, ‘more of the Same..’

    see.. “… I continue to search for evidence she is not corrupt public official, more or less in vain…” as a, potential, starting point for ~”the protection of the ‘Banks’” was the Goal, all along..”

  9. BusSchDean says:

    Twice I have been contacted to serve as an expert witness in foreclosure related cases. The first settled before I even got the file and the second seems to be going in the same direction. A sad day indeed when some of our leading banks avoid going out into the sun. By now they must have a vitamin D ($D) deficiency.

  10. Lugnut says:

    Chicago politics 101 – Your criminal behavior is totally unacceptable. Now.. where’s my vig? You think these DA’s bribe themselves?

  11. Conan says:

    Goes back to what I said in my other post. Lack of Rule of Law.

    Obama made a HUGE mistake of not going after the mis-creates of the debacle of George’s term.

    He should have prosecuted to the full extent of the law everyone he could have found and clawed back everything he could get.

    Instead of Health Care Socialism, the should have focused on economic reform, return Glass Stegall and listen to Volker a proven player in crisis not the idiot Summers.

    But instead of a path to change, he was subordinated by the special interests. How else to you explain the graph Barry published yesterday showing the lowest level of prosecution in over a decade in one of the most target rich environments of a lifetime!!!!!!

    So who’s the crony now!!! Talks cheap action counts!!!!

  12. Petey Wheatstraw says:

    BusSchDean Says:

    “A sad day indeed when some of our leading banks avoid going out into the sun. By now they must have a vitamin D ($D) deficiency.”
    ______________

    Being vampires, banks going out into the sunlight is a lot more dangerous than any vitamin $ deficiency.

    We’ll have to add wooden stakes, mallets and garlic to the list of things we’ll need to straighten this all out (among the others are pitchforks, shovels, manacles, tar, feathers, a couple of gibbets, and a copy of the Constitution to read as we root the bloodsuckers and their protectors/minions/Renfields out of their hidey-holes).

  13. mathman says:

    Have any of you Wall Street experienced people heard of either of these two guys?

    http://joemygod.blogspot.com/2011/11/anti-ows-douchebag-is-scam-artist.html

    Weather’s gonna be a problem on the west coast and mid-west this week:
    http://www.youtube.com/user/dutchsinse#p/u/0/FUgX81I7Ghk

    My, my how far we’ve come (fallen):
    http://www.emptywheel.net/2011/11/19/because-of-latif-section-1031-authorizes-indefinitely-detaining-americans-based-on-gossip/

    okay, i getta get started on ma chores or my wife will have my head in the oven . . . hope to see more of your comments a bit later (when i get a break).

  14. eliz says:

    Just more evidence of the “captured” government – as IF we need more evidence.

    Today I am giving thanks for the 5 AGs fighting the fight for truth and accountability.

    Harris (CA)
    Schneiderman (NY)
    Coakley (MA)
    Masto (NV)
    Biden (DE) <– have to wonder how long until he caves

    ……………………….

    And where is Obama? Oh, yeah – serving the banksters. I wonder if his pals Jaime and Lloyd are heading to the WH for the holiday. Maybe even Jon has a place at the table. It wouldn't surprise me in the least.

  15. biscuits says:

    First Madoff, then Corzine, these guys were trusted and look what they were up to. Who knows how deep the robosigning fraud goes. Could it be possible there could be much more to the securitization/robosigning mess, like using the same toxic waste collateral for multiple issues? I guess we’ll never know if they can sweep the mess under the table and offer settlements.

  16. 873450 says:

    “The sunk cost of the bailouts have completely skewed government officials priorities. Hence, enforcement of laws and imposing criminal penalties has become verbotten, as it undercuts the prior monies.”

    That fits into the pre-established narrative. Government exhausted our treasure spending trillions bailing out TBTF banks. Now government is broke. It cannot acknowledge tragic decision making and cannot afford to pursue alternative strategies. Worst of all, it is 100% vested in supporting TBTF’ and begging the uncertain 1% for some trickle-down job creating.

  17. rktbrkr says:

    Obama made a HUGE mistake of not going after the mis-creates of the debacle of George’s term.

    In many respects O’Bamas term has been Bush’s third term especially banking and economics, O’B has continued what Bush started

  18. budhak0n says:

    Pam Bondi for President. Get in the game. Come on you folks are shocking me with your inability to adapt, improvise and overcome.

    Don’t let silly things like facts get in your way. Get in the game junior.

    Gubbermint aint broke. You is.

  19. budhak0n says:

    And in my best Newt Romney voice, I never said the previous post.

    What I actually said was yes, I support your efforts to bring these criminals to justice. Because underneath my 3 piece suit, I still wear a red and blue suit.

    Who me? A lobbyist? No what I did was just some historical fact checking.

  20. DrungoHazewood says:

    rkt says:

    “O’B has continued what Bush started”…and what the corporations want. Obama is the perfect front man. The left, who should be outraged more than anyone, are loath to press him, and when the right does, it divides the country even more. And the alternative is super shill Romney? They really have our asses in a sling.

  21. Myheadhurts says:

    For those who still refuse to accept why the Occupy Wall Street movement exists, this is one of the big reasons: Betrayal of trust.

    That there is no justice, that corruption and greed go unchecked and unpunished in any material or meaningful way. Further fueling the fire of protest is the obvious and continued collusion between government and the banks, as the rush to settlement shows.

  22. Greg0658 says:

    umm .. hey our finest caught the laserjet ink cartridge too .. just in time for an announcement from the deep well
    funny how many coincidences ya see .. ya hahahahaha

    hey .. on a + note
    Pinocchio is a real boy now and has his innuendo on:
    http://www.c-span.org/Events/Annual-White-House-Thanksgiving-Turkey-Pardon/10737425738/

    and back into my character .. not sure how these ‘isms or twin novas are gonna escape this blackhole .. ya Einstein thanks for the scientific advancements ..

  23. cjcpa says:

    FISA!!!

    Yes, emptywheel was on this from the beginning, but, for me, the day Obama signed the FISA – retroactive immunity for telecoms that broke the law, without admitting what they did, and without any investigation, was the day I ‘quit’ him.
    (btw, he promised to oppose, even to filibuster the act- but that was when he wanted the nomination. After he got the nomination sewed up, he began to not just fail to do what he promised, (nonfeasance) but fly back to DC to case a vote for the immunity. (malfaeasance.)

    It was quite telling. Blanket, retroactive immunity, and he voted for it.
    He perpetrated a lot more blanket retroactive immunity once he was in office. Failure to prosecute anything, really. The prospects of getting blanket retroactive immunity for banks are quite good.
    We already have de facto immunity through a failure to prosecute.

    ===
    Barry, I had a lame Halloween costume, but I was a zombie bank, I may email a picture when I get my phone connected to my computer.

  24. rd says:

    How could a settlement that does not include California, Delaware, Massachusetts, Nevada and New York be anything but window dressing to make good political sound-bites.

    Much of the nation’s population is in these states. California and Nevada are leaders in the property value reduction and foreclosure industry, while the MBS’s are pretty much all governed by Delaware and New York state law, and many of the financial corporations have major Delaware or New York registrations.

    The AGs in these states refusing to whitewash one of the biggest financial scandals in history is one of the few major hopes I have left for our political system. If they cave in to the lobbyists, I need to think seriously about moving to Canada.

  25. SOP says:

    Petey, I wish this was hyperbole (but I know you know it is not):

    ” the FBI’s primary function, nowadays, is to find mentally retarded, dark-skinned men they can entrap into becoming threats to National Security…”

    Like US AG Eric Holder said:

    “”It is one of the things that keeps me up at night,” Holder said. “You didn’t worry about this even two years ago — about individuals, about Americans, to the extent that we now do. And — that is of — of great concern.”

    “The threat has changed from simply worrying about foreigners coming here, to worrying about people in the United States, American citizens…”

    http://abcnews.go.com/Politics/attorney-general-eric-holders-blunt-warning-terror-attacks/story?id=12444727&tqkw=&tqshow=GMA&tqkw=&tqshow=GMA&tqkw=&tqshow=GMA&tqkw=&tqshow=GMA

    —-

    And also see Mathman’s third link above (My, my how far we’ve come (fallen):)..

    I wonder who the CIA and NSA work for now… and which side will the military takes when the Melting-Pot Spring begins in North America.

  26. SOP says:

    Re. Obama

    Conan, Winston mun – agree completely about Obama’s failure/contributions to the problem.

    Cjcpa – thanks for bringing up FISA, I cannot keep track anymore.

    We need a “”Ginormous Time-Line of Fraud” flow chart with layers:

    Layer One – Congressional Capture and Decriminalizing felonies (congresses’ role – big head shots of the masters like Phil Gramm and the distracted goofs like Barney Frank)

    Layer Two – “Looking the other way” – Federal reserve (double head shot of greenie and benny), the entire executive branch, SEC, FDIC, Fed AGs, FBI, State AGs …

    Layer Three – “Trickle Down Theory of Fraud” – start with the early efforts of the top criminal bankers (you know the head shots), middle showing with local banks joining in by shipping local garbage to Fannie/Freddie in order to compete with the top-tier banker predators, end with bankers bailouts with taxpayer funds.

    Layer Four – “Would-be Crime Stoppers” – various voices in the wilderness starting with the earliest warnings from the FBI and folks like Bill Black, ending with the few State AG’s who-could-not-be-bought (see eliz, wally posts above).

    Layer five…

    I’m exhausted.

  27. louis says:

    “O’B has continued what Bush started” That’s why they let him in.

    http://www.youtube.com/watch?v=PYZpWTvre9c&feature=related

  28. BusSchDean says:

    Petey…yep, but I am a bit skeptical as to whether this populous even knows which side of the pitchfolk goes up and why.

  29. AtlasRocked says:

    Thanks Thatguy.

    Robosigning is completely illegal, but today’s politics cannot afford to prosecute the crooks and risk further decline in the markets.

    The reason the government is so complicit in this whole thing is obvious.

    60% of government spending is now social spending. The revenue source for the social spending is the tax base.

    Once the gov’t becomes such a primary distributor of sustenance for so much of the middle and lower classes, then any disruption in the flow of money will result in anger toward the gov’t, instead of anger toward the businesses that have slowed. Government now has to direct all resources toward maintaining constant growth in the business sector through targeted, then broader and broader corporate, taxpayer, and bank bailouts. Illegal acts have to be allowed because prosecuting those acts imperils the social spending dollar flow.

    The normal growth and decline cycles that are healthy to a capitalist markets are no longer possible. The gov’t cannot allow declines to happen without destroying the ideas central to liberal policy.

    That’s why you see so much unhealthy bailing out and tolerance of illegality: It’s about the money. The money going to supply the “mandatory” gov’t social programs.

  30. 873450 says:

    AtlasRocked Says:
    “That’s why you see so much unhealthy bailing out and tolerance of illegality: It’s about the money. The money going to supply the “mandatory” gov’t social programs.”

    Wow! Thanks so much for that thunderbolt of of truth and clarity identifying the true culprits undermining and destroying the American Dream.

    It’s still about the money. I get that. But it’s not about Corrupt Corporatists + Corrupt Lobbyists + Corrupt Politicians = Conspiracy to plunder and steal the United States away from “We the People.”

    It is “We the People” who only have ourselves to blame for the massive, 30-year transfer of our nation’s treasure and resources into the hands of 1%. Social Security and Medicare made We the People weak and lazy. Paul Ryan’s “tough love” austerity is the only cure. All we have to do is take those government programs away from future generations now. Lowering their expectations will enable them to grow old living in dumpsters eating dog food never knowing what they never had.

    I am going straight to OWS preaching your wisdom and truth. Just imagine how shocked they’ll be learning the weak, lazy 99% have everything all wrong.

    Go! – Citizens United – Go!

  31. AtlasRocked says:

    873450 wrote: “It is “We the People” who only have ourselves to blame for the massive, 30-year transfer of our nation’s treasure and resources into the hands of 1%. “.

    Your assertion is easily shown to be cockamamie: One of the primary behaviors of a scam is to obscure the scam through deceptive book keeping. While the 99% demanded greater fiduciary exposure with sar-ox, why do they continue to allow the govt to call Medicare and social security an “obligation” on the “mandatory” bookkeeping ledger, but the future payouts are not totaled in the national debt? This is an illegal practice in the private sector, where all obligations are required to be totaled as a debt against the future earnings.

    Tell the forum, 873450, why is the 99% asking for more fiduciary scrutiny on the corporations, while allowing outlandish violations in fiduciary bookkeeping standards in their own books? Why do they tell their leaders not to vote for a balanced Budget amendment? Why would they prefer to pass debt to future voters that have no vote?

    Great lies are created by a mass of people first trying to paint facts as less important than opinion, then trumpeting their opinion as facts. The facts are this: In all the western style democracies the people are asking for more benefits than tax revenue supports. Higher tax nations have higher debts, not less. And the 99% are asking their politicians to apply lax, shell game standards to the public books then, with their cockamamie opinions, trying to blame the rich folks for ripping them off.

    The 99% are ripping off the 99%.

  32. [...] Banks Pressing for Foreclosure Settlement Before Investigation (November 23rd, 2011) see also Florida AG Takes Orders, Money from Fraudclosure Firm (October 12th, 2011) [...]