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California AG Considering Joining New York, Delaware in Broad Probe of Mortgage Abuses

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We’d said the 50 state attorneys general settlement was wobblier than the press cheerleading would lead you to believe. We’ve also said the California AG, Kamala Harris, was likely to be among the defectors. The odds of that increased today as she met with New York AG Eric Schneiderman to discuss joining the probe that he and Delaware AG Beau Biden have launched, which is the most extensive investigation undertaken to date.

It isn’t hard to see why the settlement talks are fracturing. Many AGs are unhappy with Tom Miller’s failure to keep them in the loop, the lack of meaningful investigations, and the high odds that the banks will get a broad waiver, which is tantamount to a big “get out of liability free card”. If you have any doubts whose interests are served by these negotiations, Jamie Dimon, in an investor conference call Wednesday, said he “would do anything to get it done today.” And no wonder why. He also said, per Bloomberg:

There have been so many flaws in mortgages that it’s been an unmitigated disaster…We just really need to clean it up for the sake of everybody. And everybody is going to sue everybody else, and it’s going to go on for a long time.

Given that California was one of the states worst hit by the mortgage meltdown, its abstention from a settlement deal would have a disproportionate impact. Politically, the fact that the states that have exited and appear likely to exit have Democratic AGs is also more of a blow to the Administration, which has been involved in the negotiations that Republican defections would be.

From the Los Angeles Times (hat tip Lisa Epstein):

California Atty. Gen. Kamala Harris met with New York Atty. Gen. Eric Schneiderman on Thursday in San Francisco to discuss cooperating on the investigation, which is already one of the broadest to probe how banks encouraged the financial crisis through the creation of risky financial instruments backed by mortgages.

New York and Delaware have more than a dozen attorneys working full time on the effort and have subpoenaed or requested information from 13 financial firms, including Goldman Sachs and JPMorgan Chase & Co., according to people familiar with the investigation. The people spoke on condition of anonymity because of the sensitivity of the investigation…

Biden and Schneiderman have separate but parallel investigations into the matter and have signed an agreement to share information, people familiar with the cases said.

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26 comments

  1. nowhereman

    One can only hope.
    Yet I have become extremely cynical, what with this debt ceiling crap going on.
    The way I see it, this is a prelude to the real purpose. They want to frighten you into accepting the austerity measures they’ve planned.
    No, don’t look at the cost of the bailouts, no, no, look over here, it’s the debt ceiling.
    And you know what? People are falling for it.

  2. chris lahaie

    Leave it to Dimon to provide a clear guiltless conscience with the complete expectation of getting off without any punishment. It seems like these guys should be shaking in their boots in fear of repercussions. unbelievable ….

    1. attempter

      Like the Nazis, the banksters have gone all in. They’re waging total war on the peoples and nations. They’ll win total victory or be totally destroyed. So there’s no point feeling guilt or fear now.

      1. Middle Seaman

        What’s the point of labeling everyone with the Nazi flag? Surely, the banksters haven’t killed 60 million people yet. They are clearly ruthless oligarchs that will go down with the ship. They got a lot of political support for that. After all, they hold both party by the b..ls and have a very sympathetic president.

        This should, though, end with enough Harrises and Schneidermans and some help from us.

        1. Alex R.

          IMHO, those crooks would be happy to gas us all if they could make a buck. As Ivan Stang said, ‘They’re gonna crucify you, and you will have to pay them to crucify you.’ No truer words were ever spoken.

        2. attempter

          It’s an apt comparison. They’ve embarked upon this thoroughgoing assault which on the socioeconomic front is indeed total war. They intend to eradicate all institutions and values other than those of their own prerogative. They intend to reduce 99% of the population to servitude (via debt indenture). As for physical violence, they’ve already presided over the deaths of tens of millions through all the wars which have been waged on their behalf. Have they equalled the Nazis’ body count? What kind of sick question is that? A mass murderer is a mass murderer, whether he’s responsible for one million deaths or ten million.

          For that matter, many banksters bankrolled the Nazis, bankrolled their wars, profited obscenely, and skated afterward. Hjalmar Schacht was acquitted at Nuremburg, and it sure wasn’t because he was less culpable than relative pikers like Streicher or Sauckel.

          So it’s really not a comparison, but a cumulative phenomenon.

        3. KnotRP

          True, true….not yet….after all, only about 40 million US citizens are now on food stamp assistance (should we count the world wide population impact of this banker-made crisis, to make it more accurate? Nah…), so clearly the analogy is wildly hyperbolic because it’s only 2/3rds the size AND these people won’t actually die! Well, they won’t as long as their fellow citizen tax payers stay employed and can be yoked into keeping them fed with redistributed earned wage income while bankers take down government funed bonuses and suggest we all eat cake. So I totally agree….what’s the point in making such comparisons?

          (irony of the day: the food cards are managed by JP Morgan in combination with the government, so JP Morgan is even making money handling the food money of the folks they’ve helped put on food assistance…nice work, if you can get it)

      1. Justicia

        Sociopaths have no conscience and the sense of entitlement among Dimon and his ilk makes the concept that they might ever be held accountable for anything unthinkable.

  3. BF Fraud Job

    Doug Gansler’s election web page, with blatant inaccuracy:

    ” When the mortgage crisis hit Maryland, Attorney General Gansler got Maryland homeowners the foreclosure relief they needed, took on the predatory lenders, and brought the stakeholders together to ensure this wouldn’t happen again.”

    It’s takes money to run a campaign, and young prosecutors go aggressively after low hanging miscreants rather than offend “business leaders”.

  4. Guy_Fawkes

    I just wrote a letter to my AG, urging him to join in this investigation. I told him I would be happy to provide the necessary documents to show him what the criminal banking institutions have claimed in my case…which is EXACTLY why this investigation that AG Schneiderman is so crucial.

    Here’s the deal in my case:
    By admission from Chase in writing in 2010, they say the investor is “Washington Mutual Mortgage Securities Corp.” Then, I just received in writing from the BOA attorneys that the “chain of title is CLEAR. It went from WaMu to the FDIC, to Chase to BOA.” BUT, here’s the deal……if we are to rely on the first document filed, then the chain of title on the DOT and note would have HAD to have been PER the PSA…..WaMu, to WaMu Mortgage Security Corp, to WaMu Asset Acceptance Corp, to the OA5 Trust. BTW, the OA5 Trust closing date??? That would be May 1, 2007…..and the FDIC Receivership date……Sept 25, 2008….

  5. margret brady

    There seems to be a tendency to start at the end and work backwards through this mess.
    As one of the many honeowners, with a MERS title showing no chain of ownership and transfer of title,from the time of closing until, without notice to the homeowner, the mortgage was transfered to a RALI securitized Trust,after the trust was closed, four years later.
    As a homeowner, attempting to discover, who actually owns my mortgage and note, I’d like to see at least some willingness by the banks, to start over with new title documents showing the actual chain of ownership. Since our original closing turned out to be bogus, do it over.
    I’d also like to see my NJ county clerks office paid for each of those transfers that were never recorded.

    1. Mark P.

      ‘I’d like to see at least some willingness by the banks, to start over with new title documents showing the actual chain of ownership.’

      Good luck. Perhaps in some alternate universe your wishes will be fulfilled. In this one: -

      [1] Even if the banks were prepared to do any such thing — and they are not, because that would amount to an admission of enormous culpability —

      [2] It is not clear that at this point they — or anyone — CAN show the actual chain of ownership in many of these situations.

      1. VT

        So, this is my question. Who does actually have standing to foreclose? The only verifiable lender in the whole chain seems to be the bank that made the initial loan – right?

    1. watercarrier4diogenes

      As Barbie once said, “Math is hard”. Apparently harder than applying subterfuge, buying legislators, outright lies, and if necessary, brute force (aka TBTFness) to get your own way.

    2. Just Tired

      “We put a man on the moon but this is hard.”

      Real engineers v. financial engineers, ya think?

  6. LAS

    I’d so love to serve on the grand jury or be an investigator that considers some indictments related to this.

  7. Westcoastliberal

    If they actually investigate the mortgage fraud mess they’ll find 75% of the foreclosures are illegal and probably more than that % in non-judicial states.
    What all this means in the end is up for debate, but we should see the end of the TBTF banks as a result. And of course that will NEVER happen.

Comments are closed.