The Fed messed with the wrong senator

[DonViejo]

If foreclosure victims get justice, trace it back to a bad decision to stonewall Elizabeth Warren last week

BY DAVID DAYEN


I have spent the better part of four years trying, with little success, to raise awareness about foreclosure fraud, the largest consumer fraud in the history of the United States. In fact, there’s a whole little band of us writers and activists and foreclosure fighters. We have provided multitudes of evidence about fake documents, forged documents, illegal foreclosures, foreclosures on military members while they served overseas, foreclosures on homes with no mortgages, breaking and entering into the wrong homes, suicides by foreclosure victims, and above all the complete lack of accountability for these crimes and abuses.

But instead of giving voice to thousands upon thousands of victims of illegal foreclosures, instead of documenting the banks’ criminal practices, maybe what we all should have done is simply let the Office of Comptroller of the Currency (OCC) – part of the Treasury Department — and the Federal Reserve construct their own settlement with the banks. Then, when it utterly unraveled — as it has over the past couple months — the unimaginable fraud heaped upon homeowners would get more attention than ever before, particularly from a frustrated and angry Congress led by Senator Elizabeth Warren.

Indeed, despite OCC and the Fed’s best efforts to protect banks from harm, they’ve actually exposed them like never before. If I didn’t know better, I’d think there were moles among this gang-that-couldn’t-regulate-straight.

Before I get into Warren’s role, first flash back to April 2011. Foreclosure fraud was in the news, at least in the business section. State and federal regulators were investigating. Embarrassing disclosures were occurring on a daily basis. And the OCC, the primary regulator for the banks doing the lion’s share of the foreclosing, had to answer for their complete lack of oversight and enforcement. So they came up with a solution.

more
http://www.salon.com/2013/04/15/fed_messed_with_the_wrong_senator/

[snagglepuss]

1. k and r

[russspeakeasy]

2. K & R

[LonePirate]

3. Warren continues to challenge Sanders for the honorary title of my favorite US Senator

If only we had at least 50-60 more senators just like those two.

[daleanime]

7. Amen

[xiamiam]

4. wrap your head around this aspect of the whole mess

2010..state attorney generals settled with banks on a 9.6 billion dollar settlement with approximately one half of that to be given to homeowners in cash and the other half to be in house settlements. like modifications or principle reductions, etc( these are already losses on the banks books anyway)

ok, an independent review was to be handled by the banks to determine the cash settlements

the banks extended the deadline many times to Dec 31, 2012..almost 2 years and lots of glossy mailers

on Jan 7, 2013 the OCC and the Fed took over from the consultants who were in charge of the independent review.. and scrapped the independent review after paying the independent reviewers 2 billion dollars..in some cases they were paid $1500 per hour

so subtract 2 billion from the one half cash settlement allocated..5 billion settlement cash to homeowners - 2 billion for the consulting services equals a 3. some odd change billion settlement to 4 million + homeowners..( these are close to approximate figures)..the average payout to homeowners involved with the foreclosure mess in 2009 and 2010 is $300.

its criminal..they don't even care about hiding the corruption..its right in your face

nothing is going to happen over this..sure a senate hearing..blah blah blah...such a friggin joke..

[Tom Rinaldo]

5. This part is mind blowing

"To pick a category at random, 234,000 borrowers had a loan modification approved, were kicked out of their homes anyway, and will receive for their trouble – for having their home effectively stolen – a whopping $300 (for comparison’s sake, the third-party consultants got $10,000 per review)."

Those are the consultants who the banks hired to review their own failed practices. Their reviews were so laughable that the OCC gave up on their Plan A, which was to use those reviews to arrive at just remedies. So instead the OCC came up with a blanket settlement proposal that pays out a total of 3.6 Billion in "compensation" as described above. Meanwhile they spent 2 Billion paying for those individual reviews before giving up on them. Amazing.

[JDPriestly]

10. It is not possible to make that many mistakes.

If you study the Ambrosiana Bank scandal a little, you realize that massive, well-organized fraud and crime has been known in the banking sector at least since the 1970s. The Ambrosia/Vatican/Franklin National (and many, many more bank names) scandal was allegedly perpetrated by just a few individuals with the complicity of many more. The MAFIA was involved. The Vatican was involved. The list of players and countries is long.

The Ambrosiana Bank scandal is a fascinating story that makes me all the more suspicious about what is going on in American banks and mortgage companies now and what went on beginning at least in the 1990s.

Here are some interesting sources on this earlier (?) banking scandal. Remember Calvi is the banker who was found hanging from a bridge in London years ago.

http://en.wikipedia.org/wiki/Roberto_Calvi

I post this to suggest that the kinds of actions taken by the banks in the foreclosure and derivative crisis should not be automatically dismissed as just negligence or mistakes or aberrations.

There is at least one historical instance in which widespread, international bank fraud was perpetrated, successfully for quite some time, by a relatively small group of individuals.

I think that those participating in the fraud that lead to our current financial crisis were not part of a small group but rather a large network in which key players were able to pull strings and move chess pieces in order to elicit desired reactions from banks worldwide.

Do trade secret laws protect criminals and their crimes?

It seems to me that if the regulators are refusing to release information because they claim it is a trade secret, they are working on the presumption that no crimes were committed. Yet it seems that the fraud could be criminal. I don't see why the banks are being protected in this way. Unless it is because some of the regulators hope to find jobs in the banking sector after they leave their government jobs or have worked in the banking sector previously and have friends in the banks. Conflicts of interest? Yessiree.

[davidpdx]

11. It lends a new meaning to...

highway robbery.

[xtraxritical]

6. k&r

[TekGryphon]

8. I am sooo jealous of Massachussetts crew :)

[mikekohr]

9. Warren 2016 nt

[Moostache]

12. Please, no...I want her to live and be able to make a difference.

I fear that if Elizabeth Warren were to run for the presidency, she would be targeted for assassination. She is probably already in a lot of danger already because these banksters and the drug dealers who depend on them for laundering their illicit profits do not take kindly to exposure or people who interfere with their ability to go on breaking the law.

Warren and Sanders represent the real threat to the status quo - smart people who ask the right questions and pursue the answers when evaded. I hope more like them emerge and soon!

[mikekohr]

13. Warren and/or Hillary are top contenders in my book

Match them up with Brian Schweitzer (D) Mt, Deval Patrick (D) MA, or Castro (D) TX and we've got a lock on the White House in 2016/2020.