This is the key snippet from Gretchen Morgenson’s New York Times column today, which inveighs against Iowa attorney general Tom Miller’s unseemly and peculiar haste to get a deal with miscreant banks inked:
Two people who have been briefed on the discussions, but who asked for anonymity because the deal was not final, told me last week that no witnesses had been interviewed and that the coalition had sent out just one request for documents — and it has not yet been answered.
And the official denial amounts to a confirmation:
Mr. Miller declined to be interviewed about the proposal. But Geoff Greenwood, his spokesman, disputed the notion that the attorneys general have done no investigation. “We have dealt with this issue for some three and a half years on a day-to-day, front-line basis with consumers,” he said. “We know what the problems are, and we know what needs to change.”
Really? All you have is complaints to various AG offices, which I sincerely doubt have been investigated in a systematic manner. If they had been, we would have seen more wideranging action in more states by now. But all they have is accounts from irate homeowners, along with court cases and horror stories reported in the media. That’s self-reported sample, regularly dismissed by the banks as anecdotal and not consequential.
Without an investigation, all we have is “he said, she said.” Despite robo-signing having revealed widespread abuse of court procedures, the AGs seem remarkably unwilling to get to the bottom of things. Since the banks are the ones who have a seat at a table in these negotiations, it’s almost a certainty that their version of the story will get more serious consideration.
If the attorneys general had such a such a good overview prior to the eruption of the robo-signing scandal, why did New York state banking commissioner Richard Neiman implement regulation last October to make clear that New York’s business conduct rules for servicers also covered ones exempt from registering with the state (such as ones regulated by the Office of the Comptroller of the Currency)? As Neiman stressed in a letter to the editor of the Washington Post:
With the numerous bank errors that took place in the five months that Dana Milbank tried to refinance his home [“Foreclosures: Big banks’ reign of error,” Sunday Opinion, March 6], you could almost laugh that a prominent mortgage servicer happened to pick a nationally recognized columnist to harass. But it is not funny.
Bank regulators across the country hear the same story over and over again. In New York we took the unprecedented step of promulgating regulations to govern mortgage servicers’ treatment of homeowners. Now, we can fully examine servicer activities, use the power of law to enforce our rules and require timely responses for homeowners.
We need national standards to govern mortgage servicer conduct now. The Consumer Financial Protection Bureau should put in place such rules as an early priority. For every columnist affected, tens of thousands of people are suffering who do not have an outlet on the opinion pages to voice their frustration. They do not find it funny, either.
The fact that it takes a letter from a non-deadbeat educated person to get the chattering classes to take mortgage abuses a tad more seriously proves that the officialdom has been, and for the most part, continues to be, willfully blind to the extent of the rot.