HUD Secretary Donovan: Banks Should Fix Problems Caused by their Law Breaking
Check out the following passage in HUD Secretary Shaun Donovan’s statement opposing a moratorium on foreclosures:
No one should lose their home as a result of a bank mistake. No one. That is why the Obama Administration has a comprehensive review of the situation underway and will respond with the full force of the law where problems are found. The Financial Fraud Enforcement Task Force that President Obama established last November has made this issue priority number one. Bringing together more than 20 federal agencies, 94 US Attorney’s Offices and dozens of state and local partners to form the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud, the Task Force is examining this issue and the Attorney General has said publicly that if it finds any wrongdoing the members of the task force will take the appropriate action. The Federal Housing Administration and Federal Housing Finance Agency have launched reviews to make sure servicers are in full compliance with the law. The Office of the Comptroller of the Currency has directed seven of the nation’s largest servicers to review their foreclosure processes, fix the processing problems and determine whether there is specific harm that has been caused in individual cases.
The message all these institutions are sending is the same: banks must follow the law — and those that haven’t should immediately fix what is wrong. [my emphasis]
Donovan offers a list of government agencies which have regulatory and legal authority to penalize the banks, but ultimately says that the banks themselves will be directed to police themselves.
The message these regulatory and law enforcement agencies are sending, Donovan says, is that the banks that haven’t followed the law should immediately fix what is wrong. Not, “the banks that haven’t followed the law should be prosecuted.” But “the banks that haven’t followed the law should make it right on their own.”
And while Donovan brags that the Financial Fraud Enforcement Task Force has been on the job for almost a year, it has done nothing about the multiple bank employees who have given sworn dispositions admitting to committing fraud on courts.
But that’s not all that surprising. After all, Donovan is also propagating the myth that this systemic fraud is just bank “mistakes.”
The rest of Donovan’s statement is no better. It tries to personalize the harm that hypothetically would result from a moratorium. But the examples make no sense and all basically assume that banks owning properties lead to declining property values; if that’s the case, then let’s crack down on deadbeat bank landlords. And it certainly misunderstands how a generalized problem with titles–the Administration’s refusal to address the underlying problem–will affect the housing market a lot more than a delay to address to address that underlying problem.
It all appears to be further indication that the Administration hopes that by letting the banks fix this themselves, the problems caused and covered up by the banks’ crimes will just go away.
Counterfeit mortgages—laundered by banks…what could possibly go wrong…?
Except, counting on the foxes’ ” voluntary integrity” to redesign a fox proof henhouse…anytime in the near future.
I think the real problem here is that Obama has decided the law does not apply to MOTU. Therefore they must rely on noblesse oblige to rectify any bad behavior among the nobles.
Historically that did not work out so well, hence the necessity of an ever expanding legal code. A useless code at that, if it is not enforced. Remind me why we have a Congress and a DoJ?
The most perfectly crafted law ,anywhere in the world, cannot protect you from sociopaths…and their political enablers.
It’s getting hard to tell who are the sociopaths and who are the enablers.
The entire DoJ? Every cabinet secretary?
Someone else on another thread suggested that when the Reps return to power and finish drowning the federal government in the bathtub, we would be free to focus our energies on state and local government. Given the total lawlessness of the Feds, that may well be our best game plan.
Did you by any chance see this?
Source: Daily News
By Sharon Churcher and Chris Hastings
A jet owned by a senior executive in the US firm which has bought Liverpool Football Club was chartered by the CIA and used in flights allegedly linked to the rendition of terror suspects.
The plane is owned by Phillip Morse, 69, the vice-chairman of New England Sports Ventures, which bought the club on Friday for £300million.
An investigation has established that between 2002 and 2005 the CIA chartered the plane from Mr Morse for millions of pounds and made extensive use of it.
Inquiries by the European Parliament and human rights groups have linked the plane to alleged extraordinary rendition operations which took place during the same period.
Read more: http://www.dailymail.co.uk/news/article-1321244/CIA-pai…
Well, that ought to motivate LFC to play their very best or else! (Ok, that was very tasteless snark, but I couldn’t help myself.)
It does raise the depressing possibility that Morse raised the revenue to purchase LFC by human trafficking courtesy of the US government.
Thanks for the link, I had not seen it.
By the way, your link is broken. Here is the right one.
Not surprising – that was the one with the Red Sox logo on it.
if we didn’t, all those office buildings would be empty.
To protect us all from reefer madness, of course.
Are we ever going to talk about the link between mortgage fraud and terrorism??
http://www.timesonline.co.uk/tol/news/uk/crime/article3486107.ece
http://www.aina.org/news/2007041194958.htm
http://activerain.com/blogsview/21777/mortgage-fraud-tied-to-terrorism-
http://network.nationalpost.com/np/blogs/francis/archive/2008/08/11/mafia-
terrorists-in-mortgage-frauds.aspx
The synchronicity is palpable today.
I JUST posted a comment over at Cynthia Kouril’s thread,immediately following YOUR comment.
I said what’s next-privatization of debtor’s prisons-with Blackwater mercenaries for guards?/s
It has felt like fighting organized crime in that, these people have remained one step ahead of homeowners on every issue. It floors me when I realize that they have managed to keep these stories about “titles”…with no mention of all the accounting fraud, bogus fees for services not rendered, legal fees from lawyer mills running 5000.00$ a shot tacked on to the homeowner, and escrow account irregularities. Still no mention of these issues which will be present in almost every single sub prime loan.
I keep thinking about Mason’s advice from a few threads ago. Wonder if it could speed up the process of correcting this mess if enough home owners with mortgages in good standing were to follow it:
Request certified proof from the servicer of one’s mortgage (especially those who are current on their payments).
With the help of a real estate attorney decide whether to set up an escrow account into which you pay your monthly mortgage. The money in your escrow account would only be released to the holder of the note only upon that holder of the note identifying themselves and registering their name with the local county in which your land resides. The holder of the note would of course pay all the standard local fees to do so.
Sue your faux servicer, (the one that has been collecting your payments without legal standing because they have not been in possession of the note), for all previous payments.
If the law is on their side, homeowners could ditch their passive role of hoping vainly for politicians to save the day for the little guy. Homeowners as a group could take on the financial industry directly.
I don’t know how this would fly in nonjudicial states, so I hope someone has posted (or will post) how this could work in practice. Divert the money stream. Weaken the greedy banksters. We need a name for the project.
What about, in honor of Cheney, we call it Operation Klamath Falls?
Or maybe a better name would be Operation MERS Falls.
This will help us to get rid of the MERS attempt at privatizing what has been for centuries public records of real estate ownership/mortgages residing in our state and county government offices.
From DDay’s link (firedoglake pdf) to U. Cincinnati Law Review 2010, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, p 1403
Make the records public to eliminate all sorts of sleight of hand that could otherwise take place in the dark.
Here’s the thing that I can’t seem to get across to people. These servicers have been taking “any” opportunity to heap on the fees. Which includes suing me for non payment for six months (twice!! this was no error) and then heaping on legal fees. I won. They didn’t care. Why? Because as my lawyer informed me, they would put this $10,000.00 in fees on the rear of my loan, sneak into my balance. This is what they did. So that, when I got out of chapter 13 bankruptcy, I would have a negative balance. Despite the fact that I made every payment to the court and to them. Never missed a single one. Bankruptcy judge says I am paid up with the chapter 13 debt.
So, the idea of putting my payments into escrow…which is what I did when in foreclosure scares me. My lawyer tells me that the real legal issue is the fees. These fees have “some” regulation but not much. They charge fees for almost anything. The limits on the fees are few and far between and these cases based on fees end up in court. And people are not winning these cases. I had two lawyers…one a corporate lawyer and the other my bankruptcy lawyer talking about my case and how it’s obvious that they violated TILA and RESPA laws…they also brought up Rico, but both were worried that the Judges on the state and Fed level were too risky to bring my case. That is, they were often siding with big business and bending over backwards for the corporate entity almost always assuming guilt on the part of the homeowner.
Sure, there is valid reason to do what is proposed here. But could they twist this in to an advantage for them? That is my fear. It’s fear, but I have been through hell with this company and I don’t trust anything they might do. I would NEVER do something like this without some federal authority telling me in advance that the company could not pile on another $10,000.00 in fees because I held my payment in escrow and didn’t pay it to them.
Maybe the football club connection will give Binyam Mohamed’s lawyers a lever to get some British jurisdiction over Mr. Morse for a depo at least?
Or not.
I read in one of the articles-(there are updates on der Google),that RBS was the bank involved in the sale..)From what I read elsewhere, the Texas background is significant.(Wasn’t Phill Gramm,a Texan ,with UBS? You know, the one who helped deregulate the banking industry who called us a nation of whiners?)
And of course this is JUST an observation, but RBS ,UBS,Barclays,HSBC were all linked with Nigerian scam activity .
Barclays, UBS, HSBC, Royal Bank of Scotland Involved in Money …
Oct 15, 2010 … Barclays, HSBC, NatWest, Royal Bank of Scotland and UBS – have been linked to money laundering scam over which some corrupt Nigerian …
publicintelligence.net/barclays-ubs-hsbc-royal-bank-of-scotland-involved-in-money-laundering-for-corrupt-nigerian-politicians/ – Cached►
UPDATE 3-, Barclays, UBS, RBS, NatWest linked to graft in Nigeria …
Oct 12, 2010 … Britain needs to enforce money laundering regulations more strictly after some of its leading high street banks accepted millions of pounds …
http://www.businessdayonline.com/index.php?…ubs-rbs... – Nigeria – Cached
Because it worked so well last time, yes?
Is there some kind of amnesia field around government buildings in DC, that they can’t remember the last time they tried some wonderful tactic and it failed?
In response to this post: GAHHHHH!
Any further response by me re this administration’s attention to banking fraud and justice in general would draw attention from the mods, sorry.
I thought this was an interesting tidbit:
(from “TheDC OP-ED: One nation, under fraud,” Oct. 14, 2010)
Meanwhile, the Irish look pissed:
(from “An Angry Ireland Calls Out Europe On Its Bullshit Stress Test,” Oct. 17, 2010)
Guess we won’t get an answer as to why AIG was used for a USG back door bailout of Goldman and foreign banks:
(from “The AIG Public Relations Fiasco Continues: Bonuses and Backdoor Bailouts,” Mar. 16, 2009)
Odd phrasing there, “…paid out … collateral…”. Makes me wonder, did they pay with property interests rather than pay money for that part?
You sure this guy’s name is Shaun Donovan and not Ray Donovan? I can’t tell the difference….
Fictitious individuals (i.e., banks & corporations) are gaining the rights of individual personhood, but god forbid that we punish them like real individuals who break the law.
Traditionally, bank failures were related to asset quality. However, because it was inconceivable to most observers that bankers had forgotten the ingrained lessons of two generations of lending, “the economy” took the brunt of the blame for the deterioration of the banking system.
Why did the banks fail
Uhh, let’s see now… who’s Administration said that about every Fortune 500 act of malfeasance through ’08?
…
Noticing Angelo Mozilo’s $73m settlement (less then 1/2 what he stole), while (cough) “admitting no wrongdoing”…
This guy most instrumental sweatshop cranking out bad loans, selling qualified FHA applicants various ARM(s) to garner higher fees, knowing he could sell ’em to WS
repackaging, errr financial innovation specialists… yet he walks w/50% + of his takings nicely tucked away. If I were Mozilo, I’d be heading to same disgraced-executive-with-bucks location where “fake death” Ken Lay is residing and laughing in luxury.I dun’o, I have to aggree w/you (Marcy) that Donavan’s statement doesn’t inspire much confidence. Strike that: it doesn’t inspire any confidence.
It also occurs to me that Mozilo’s shop cranked out these loans w/a strategy similar to the manner in which banks have executed this foreclosure scam, eg:
* form generated mass filings
* near -0- intelligent oversight
* utter lack of conscience regarding the veracity of their work product
This is the new America. Things aren’t getting any better out there, folks, no sirreee!
From my POV, looks like Bush’s unspoken but utterly bottom line philosophy of creating an atmosphere where financial crime pays… this continues unabated.
Oh well.
At least there is some investigation happening, unlike the congress’ response to the conspiracy to overthrow FDR in the thirties. That was a bunch of bankers also, and they were not punished even a little for their conspiracy. The word was ‘They know we know, so they wont try that.’
I certainly hope there is a criminal prosecuter among all these ‘investigators.’
OMG this is such total and utter bullshit. When a drug dealer gets caught he doesn’t get a slap on the wrist, his ass gets thrown in jail. When a car thief gets caught the police don’t just let him scamper away. Throw these foreclosure criminals behind bars where they belong!