It’s pretty remarkable that Mr. Market shrugged off the devastating implications of the amended lawsuit filed by the Nevada attorney general, Catherine Masto against various Bank of America entities. As we’ve stated before, litigation by attorney general is significant not merely due to the damages and remedies sought, but because it paves the way for private lawsuits.
And make no mistake about it, this filing is a doozy. It shows the Federal/state attorney general mortgage settlement effort to be a complete travesty. The claim describes, in considerable detail, how various Bank of America units engaged in misconduct in virtually every aspect of its residential mortgage business.
The case argues on two tracks: it seeks to overturn the legal shield provided by a 2008 consent decree with Countrywide, since, in simple terms, Countrywide and BofA have flagrantly disregarded it. The case argues a separate series of claims, based on the same fact set, in case the consent decree is deemed to be operative.
The complaint describes abuses from the very outset of the securitization process: how borrowers were mis-sold mortgages (it describes how entire products were effectively predatory), how investors were misled as to their quality, how they were not conveyed properly to securitization trusts, how borrowers were subject to abusive servicing (as in charged improper and impermissible fees), how promises made under the old consent decree regarding mortgage modifications were violated (for instance, even though interest rate reductions were promised, instead modifications often resulted in HIGHER interest rates), and the filing of fraudulent paperwork to execute foreclosures.
Nevada vs Bank of America 2nd Amended Complaint
The reason Mr. Market may not be too excited is that Nevada is not a very large state, and the civil penalties may not seem that terrible ($5000 per violation or $12,000 for elderly or disabled borrowers). But an individual loan can, and likely does, have multiple violations. The suit also seeks restitution, costs for wrongful foreclosures, plus the cost of damage to municipalities and homeowners from unnecessary vacancies (I think the last, although the damages could be huge, would be hard to quantify and therefore would not be likely to be included in a major way). Note that an AG victory on the issue of wrongful foreclosure would pave the way for private lawsuits, and here the damages would be massive, particularly if state law or precedent allows for penalties (as we’ve noted, Alabama has statutory tripe damages for wrongful foreclosure, and recent rulings have had applied penalties in excess of nine times).
And aside from the potentially significant damages to result directly and indirectly from this action is that it makes several important arguments. First, the filing has a long discussion of why the damages redound to Bank of America and not Countrywide. Nevada isn’t the first to argue that Bank of America is on the hook for Countrywide liability; bond insurers have made this case in rep and warranty cases. (Keep in mind that some of the liability, for instance, for Bank of America servicing, is properly Bank of America’s).
Note that some (including Bank of America itself, via its now almost certainly dead $8.5 billion mortgage settlement) have taken the position that really, the problem is limited to the old Countrywide operation. By implication, Bank of America could put the old Countrywide into Chapter 11 and its damages would presumably be limited to the net worth of the entity at the time BofA bought it. BofA paid a bit over $4 billion, which was a smidge under 1/3 of reported book value, so if that line of reasoning were applicable, then the Charlotte bank could be asked to stump up at most a bit over $12 billion (note that BofA may have engaged in fraudulent conveyance, but that would not change the math if this theory held water). The case argues long form that some of the misconduct was carried out by Bank of America, and in other cases, that activities perpetrated by the old Countrywide have effectively been assumed and perpetuated by Bank of America. This may explain the mystery of why Bank of America hasn’t put Countrywide into Chapter 11. If this argument is largely correct, the liability cannot be isolated to Countrywide.
Second is that the case argues (as we and other have) that Countrywide on a large scale, perhaps pervasive basis, failed to convey its mortgage loans properly to the securitization trusts. Per Adam Levitin:
[T}he Nevada AG came out and alleged a securitization fail. The NY AG moved in this direction in his BNYM settlement action intervention, but was a little more oblique on that point. The Nevada AG minced no words:
Bank of America misrepresented, both in communications with Nevada consumers and in documents they recorded and filed, that they had authority to foreclose upon consumers’ homes as servicer for the trusts that held these mortgages. Defendants knew (and were on notice) that they had never properly transferred [text redacted] these mortgage to those trusts, failing to deliver properly endorsed or assigned mortgage notes as required by the relevant legal contracts and state law. Because the trusts never became holders of these mortgages, Defendants lacked authority to collect or foreclose on their behalf and never should have represented they could.
Notice that this section focuses on the implication for homeowners – that the foreclosures were fraudulent, but Paragraph 53 points out the implications for investors:
Countrywide did not disclose to investors that it failed to properly transfer the mortgages to the securitization trust from which they were sold…..This means that investors would not have an enforceable or secured interest in the mortgages.
The third important issue the case highlights is how servicers charge abusive and impermissible fees. The embarrassing part here, from the standpoint of Federal regulators and the “see no evil” state AGs is that this evidence is in the public domain, via US Trustee actions in four states. We’ve said repeatedly that servicer-driven foreclosures are much more widespread that is commonly acknowledged; foreclosure defense attorneys say the consist of 50% to 70% of the cases they represent. But as we have also indicated, it is too costly to fight foreclosures on those grounds (chain of title is much easier to prove), so this problem goes largely unrecognized. This is a perfect area for state AGs and the FTC to pursue, so we hope Masto’s effort wakes up some of her colleagues.
Dave Dayen discusses the implications for the state attorney general settlement negotiations. He points out that the failed Nevada consent decree with Countrywide is the very sane template that Tom MIller and the Federal regulators were using in their negotiations:
The question looming over the entire enterprise was whether the states could ensure vigorous enforcement…. And apparently no AG but Catherine Cortez Masto has actually investigated whether or not BofA kept their promises. Turns out they haven’t…
Knowing this, seeing it fully documented in Nevada, how could there still be any negotiations on a settlement with the same people? The negotiation should be about whether there will be a public or private perp walk for BofA executives….
Do you think Tom Miller, who wants a foreclosure fraud settlement in the worst way, is going to bother to check to see if BofA managed to actually give Iowans the loan modifications they promised? Of course not. And he’s likely to bully all the other states in the Countrywide agreement to shut up about how that settlement was basically unenforced, because people would get the message that this new settlement would go the same way.
He must have got to all of them, but not Masto. And she has ruined his best wishes, not to mention the best wishes of Bank of America. They are denying any wrongdoing and still claiming that “the best way to get the housing market going again in every state is a global settlement that addresses these issues fairly, comprehensively and with finality.” Bullshit. The best way to restore the housing market, the rule of law, and faith in the American system is by rounding up criminal enterprises masquerading as banks.
Now as bad as this sounds, the underlying issue is likely worse. Believe it or not, Countrywide was considered to have the best servicing operations in the industry, bar none. That was the reason Bank of America was salivating to buy that garbage barge.
Now some of the wreckage in Countrywide servicing is likely to be due to poor merger integration and cost cutting (Bank of America is a very cost driven bank). The lawsuit depicts both how mortgage servicing staff is undertrained and even when they are trying to help customers, are prevented by management from doing so (they are held to time per call restrictions that make it impossible for them to do much that is useful).
In other words, it would be bad enough if the servicing mess were, like the abusive Countrywide origination, the result of a deliberate effort to take customers at virtually every turn. Instead, this looks like an operation that might have functioned adequately in servicing current loans that is inherently incapable of servicing a portfolio with a high level of delinquencies. In a way, this should be no surprise, since they are completely different activities. You can service performing loans on a factory basis: high volume, highly routinized. Delinquent loans, by contrast, are high touch: they require more employee latitude, and therefore completely different staff and training.
And remember: Bank of America is the biggest servicer in the US. This case illustrates that its servicing is badly, hopelessly broken. The other major servicers are likely to be no or not much better.
How are we going to fix the housing market through a hopelessly broken servicing apparatus? This is a fundamental policy challenge that the Administration and its cronies among the bank toadying state AGs are trying to sweep under the rug. But the utter incompetence of Bank of America and its peers means that even the coverup and the remedies will fail, and in all likelihood too quickly and visibly for the political enablers to escape the blowback. The Administration seems not to have learned this fundamental lesson from the embarrassment of HAMP or the more recent revelation that banks are still engaging in robosigning despite their pious promises otherwise.
But it is likely to learn its lesson the hard way. Tom Ferguson’s research showed that housing values were strong predictors of votes for Scott Brown. The Obama Administration’s unwillingness to discomfit the banks and come up with real solutions to the housing mess will simply feed “vote the bums out” sentiment at the ballot box.
Well – What a suprise – The bankers and their servicing mions are criminals.
And since the morgages were not transfered to the trusts were the mortgage backed securities actally fraudulent ?
And if so isn’t it simple for the Feds to prove “mail and wire fraud ” ?
In case you missed this …………
Goldman promises not to do it anymore …. honest!
It would be simple for the Feds to prosecute if Eric Holder had any interest whatsoever in doing his job. Which he clearly doesn’t — this isn’t the only field in which he’s been letting major criminals get away with huge crimes, as Glenn Greenwald has documented
The Feds have absolutely no interest in tampering with the looters.
The Obama Administration’s unwillingness to discomfit the banks and come up with real solutions to the housing mess will simply feed “vote the bums out” sentiment at the ballot box.
Given that most Republicans are basically on the same side of the fence, my working hypothesis is that most people will simply not bother to vote. I’m not sure if that is helpful or detrimental to the incumbent.
I have been writing about the lack of prosecution for 3 years. I advised Wall Street investment banks and the nation’s largest commercial banks not to do what they were doing. This advice came between 2000 and 2005, long before the problems surfaced. See http://www.wallstreetmortgagefraud.com. This is nothing new. What is new is that Nevada has the guts to challenge, hopefully for something more than a bigger piece of any settlement. There must be deterrence and reform. Read “You the Jury, How Wall Street Cashed In On the American Dream and Nearly killed It.”
Tony, I am encouraged to read your book, but the cries for more prosecution I have read often ignore the elephant in the living room – political payoffs. Yves recently averred to distinguish the Obama Administration as “the corrupt Obama Administration.” What caused that corruption? Money, and in particular, the money needed for re-election, the money needed to assuage their guilt at looking the other way after being in the room when unholy acts were committed and doing nothing. Note also that Obama is at least as crazed as GWB over leaks. Speak out, and they will cream you. Only loyalist can fail to see it.
We have to go further than lament the lack of prosecution of obvious criminality, but to understand and work to eradicate the motivation for such corruption. It is not too late, but now is certainly not soon enough. In part, we must change the U.S. Constitution to de-citizen-ize corporations. Perhaps then we can reduce government corruption to a manageable size.
The Obama Administration’s unwillingness to push the Justice Department and the FBI to launch their collective fury on the Banks, the new Al Capone or Al Qeada, and come up with an end to their violence, this will simply feed an immense distrust of Corporations and a Captive Government, history proves the result is generally negative or fatal.
Rut ro Rover.
Starting to think that the facts are getting out in front of the AG’s.
Think that ANY attorney general that signs off on the settlement is going to be committing political suicide.
They waited too long to get the coverup in place
“The negotiation should be about whether there will be a public or private perp walk for BofA executives…”
~~~~~~~~~~~~~~~~MOZILO GOT AWAY WITH NO CRIMINAL CHARGES!
Why hasn’t Eric Holder asked to see the evidence, which Wikileaks claims to have, that executives at one of our largest banks may have committed serious crimes?
Let’s be honest, Holder doesn’t really give a rip about financial crimes, but the media should at least be asking him why he doesn’t want to see the evidence. We know he’d love to get his hands on Julian Assange’s hard drive — why doesn’t he want to see Brian Moynihan’s (or Ken Lewis’s)?
Well, I must say: why doesn’t Wikileaks LEAK it already?
That’s the riddle. There is so much already out in the open we don’t need a spook news service to “threaten a release of data”. We have enough on ’em already. The problem is the aristocracy refuses to incriminate their own. Can you imagine if a bridge collapsed in anywhere USA, there wouldn’t be some kind of investigation launched over the dead bodies?
A lot of the material that Wikileaks held about Bank of America has been destroyed by Wikileaks turncoat Daniel Domscheit-Berg:
NV may be a small state but their forclosure numbers are huge. Nowhere was the housing bubble as blown on the way up nor the devastation as great on the way down, a direct result of massive, systemic fraud by BAC and its minions.
Re: “Think that ANY attorney general that signs off on the settlement is going to be committing political suicide.”
Do you really think they care? I would bet that the majority of AGs that would sign off on this settlement would resign their AG position within 90 days to accept million dollar + jobs with either a large bank, a large bank lobbying firm or the outside law firm representing a large bank. Are you naive enough to believe that there is such a thing as “integrity” in any level of government politics?
Okay, so now everyone settles in for the long haul in the tried and true American fashion:
Eventually some big court case, whopping damages awarded, and then endless appeals which over time dilute the damages to bugger all, just like that Exxon-Valdez fiasco.
American “justice” is a joke – all good theatre for a while and plenty of squirming, but 20 years from now they’ll probably end up settling for $85.00.
Gee, you can see that all the way from Australia! How come we can’t see it from here? Keep writing, Bloke, Americans need to hear it.
At least all the cleanup workers will still be alive. All of the Exxon Valdez ones are dead.
Any thoughts on the research piece out that says assets at Countrywide are only ~ $11bn and that it’s hard to get anything else out of BoA after those given CW is a separate entity? Might be why the big guys were willing to settle for $8.5 if the alternative is chasing $11bn through a long bankruptcy.
Perhaps I should read the whole post before commenting…
I think there is clearly something blocking them from putting Countrywide in bankruptcy. They would have done it by now if it was possible. The merger must have been badly handled by Lewis, where instead of making sure to keep both companies separate until the full extent of unknowns on Countrywide’s books became knowns, he rushed it and flubbed the delicate maneuver. I was wondering if we’d wake up today to news reports that BACs putting Countrywide into bankruptcy after that blistering lawsuit, but it didn’t happen.
It’s hard to think of a more disastrous merger. They paid $4 billion, it has cost them $30 billion more, and likely to be much much more expensive in the future.
Countrywide would have to be liquidated in order for BofA to be relieved from its debts. When in liquidation, the issue of fraud will be examined in Bankruptcy Court. IMHO, BofA wants to make a deal now with the state AGs so that they can say the fraud issue has been dealt with when it’s time to BK Countrywide. Whether or not the law is always enforced, individuals and corporations cannot get out of debt by committing fraud and then going BK. At least that’s the theory.
“…statutory tripe damages for wrongful foreclosure…”
hmm, is that like forcing BoA executives to eat haggis for life?
Couldn’t happen to a better bunch….
I feel sorry for the haggis though. Probably takes all the heart out of it…
I see what you did there, and I like it! Those fat cats deserve less than nothing.
what about credit default swaps written against RMBS full of fraudulent trusts?
does that constitute an ‘event of Default’ if the RMBS itself is found to be invalid somehow?
and beyond that… what about the Synthetic CDOs built of credit default swaps… if they are built on CDS against invalid RMBS, does the Synthetic CDO also go poof? Then what about all of the mysterious black boxes and alphabet soup relief programs that are full of SCDOs, sitting in the various bank companies and government central banks?
This could end up a classic case of “wealthy on paper.”
Nevada has no income tax. Their tax base was Las Vegas. Vegas is I presume still in business but not what it used to be. The Las Vegas & surroundings (Henderson is one city) have of course suffered a municipal funding meltdown. LV had one of the biggest bubbles in the nation.
So, Nevada which never had much of an economy (I think 70-80% of the land is federal) now has big shrinkage in revenues.
Now comes the super-fun: Senator-D Harry Reid of Nevada is super-boss of the Senate. What are the phone calls like between Super-Senator Harry and AG Masto?
BofA is gutted. Time to move the discussion to Wells Fargo?
Wells Fargo is toast. They keep calling my home several times a day trying to get me to refinance the place. Apparently they lost the note when they ‘took ownership’ of the loan from MERS. Good times, good fun, watching serial criminals squirm, and their serial criminal handlers in DC sweat bullets.
Notice that the recent Nevada Supreme Court case cited in the complaint, Foust v. Wells Fargo, is an unpublished decision. I’ve noticed a disturbing trend: many cases favorable to homeowners are unpublished, while it appears to me the vast majority of bank-friendly cases are published.
If I had time, I’d do the research. It would be a great study for a law review article.
I think I read about recent NV Supreme Ct ruling, maybe 3 months ago?, which ruling was that if you wanna foreclose you gotta prove the entire chain of title. I think Credit Slips did a blurb on it; may Yves too.
Foust v. Wells Fargo, 2011 WL 3298915, was “not published” on July 29. The NV SCt did publish an earlier advisory opinion, Leyva v. National Default Servicing, on July 7.
Please draw yr attention to who is the US Senator from Nevada, Senate Leader, Harry Reid. What needs to be followed up, is how much political support this has in the courts, considering his powerful position.
Also, the Senate Banking Committee, chaired by SD Sen Tim Johnson.
There is a battle going on, and this is where the clobbering is going to happen. It will feed news services and opinion makers with ongoing ammo.
A serious question: has Berkshire Hathaway already invested? What is the closing date? I can’t find this info.
Is there any chance BH could back out?
“simply feed “vote the bums out” sentiment at the ballot box.”
That will be of help? look no further than Ireland .. did the change of government help?
I think if you want the banks screwed (which I definitely am salivating about) then the best way appears to be independent AGs who have the gall to tell Geithner to go to hell and are out to act in favour of American Citizens.
Come on AGs show us the way. S$#@^ Miller, S$#@^ Geithner!
Hmmm…If the note were not properly conveyed into the trust, could the securitizing bank be forced to eat them at par? Say, in the unlikely event that the captive trustee decided to actually try to help the bondholders. Which brings up the next question: can bondholders dump their current trustee and get one more inclined to deal harshly with the securitizing bank? Would they have to show malfeasance by the trustee? To whom and to what standard of evidence?
You might be able to get banks to pay up if they had any money. It’s one of those cases where your check bounces but it’s not you but your bank itself that ran out of money.
This situation with fraudster banks running the country shows that our system of government has failed; not merely failed in the simple meaning of the word but in a wider, universal sense of societal and cultural failure. We all teach what we allow and we allow this to happen on a daily basis. Some prospective actions and probable results are herein outlined:
1. Congress, and state legislators, as the source of law making in this country, should be holding hearings on why the agencies charged with enforcing the law are not doing their job. Outcome on this might be that someone in the law enforcement or administrative agency would have a ‘hot’ moment and walk away after murmuring platitudes. Mr. Obama did this during the crisis created by BP in the Gulf of Mexico and NOAA continues to hold protective covering in place on that scandalous disregard for our laws.
2. BofA will be hung out to dry-shut down. Other fraudster, thieving banks will continue to work their evil on the uneducated masses and our cultural response of business as usual-thuggery-will continue.
Civil disobedience brought slavery to an end in the 19th century-but that was replaced with Jim Crowism and sharecropping. The Civil Rights movement brought some of the most egregious aspects of racism to an end but the average American was still sold down the River-make that sold off to China and Singapore and Formosa and Korea and Malaysia.
Vigilance and a strong sense of duty is always needed to preserve one’s dignity and freedom. We have to unite and show the power mongers in this country that we will not sell our freedoms for a ragged shirt to wear.
Mr market shrugged off the news because such ‘events’ are a yawning bore to ‘them’ as if past actions are any indication, BoA is so deeply in bed with the gumming that nothing will come of this (nothing serious that is…)… They’ll get a fine and a scolding with a tap on the wrist with the regulatory feather duster but nothing more… These ‘cases’ are a side show, the modern day equivalent of Romanesque ‘bread and circuses’ provided to the mob to distract the people from the moral sewer Rome became and was (and it’s modern equivalent is…)
The plot thickens. BoNY CEO Robert Kelly has resigned. (Interesting, what they deny and what they don’t)
Bank of New York Mellon Chief Resigns in a Shake-Up
Pressure on the bank has been growing for months. While it has avoided the mortgage woes that have bedeviled the nation’s biggest financial institutions, it has come under scrutiny because of accusations that it and other custody banks shortchanged clients when executing currency trades for foreign transactions. In addition, Bank of New York’s performance has lagged that of its chief rival, State Street.
A spokesman for the bank said Mr. Kelly’s departure had nothing to do with the foreign-exchange lawsuits.
More recently, the bank has come under scrutiny over how it priced currency trades for some clients, including many pension funds. Several state attorneys general have filed lawsuits against the bank, contending that it cheated pension funds by selecting improper prices when processing currency trades.
Jeep Bryant, a Bank of New York spokesman, said on Wednesday that the lawsuits were “completely without merit and we are defending against them vigorously.”
One of the big mysteries of the whole mortgage debacle is the absence of the mainstream press from reporting the situation beyond the most limited fashion.
Once upon a time, papers like the NYT or other major dailies would have put in the field work necessary to document the pervasive securitization and servicing fraud. The result would have been a nine-part, front page series, with follow-up stories every few days over an extended period. Multiple Pulitzer prizes would flow from this reporting, and it would make the career of the reporters involved. Other press outlets would then pile on, and officialdom would be left scrambling to come up the curve.
I know there have been various articles in Fortune, the NY Daily News, and the invaluable, ongoing work of Naked Capitalism and other blogs. But none of these begin to have the impact on public agenda-setting that the old fashioned Big Story reporting of major newspapers, CBS News, or 60 Minutes once had.
It’s tempting to take a cynical perspective that the mainstream media are bought and paid for by financial elites, but I think the more likely explanation is that even the NYT these days lacks the necessary reporting resources to retrieve and analyze thousands of loan documents in multiple states. As a result of their inability to get to the bottom of what’s going on, you see a timidity in their reporting of developments as they happen. Even reporters who seem skeptical of the banks, like Gretchen Morgenstern, resort over and over to a formulation of the issues as “paperwork problems”. Of course, the Watergate break-in could have been described as a “paperwork problem” too, if Nixon had thought to argue that his only wrong-doing was failure to get a search warrant “piece of paper” from the court permitting the break-in.
Of course, the other possibility is that major news outlets HAVE looked into these issues, and there’s not much there to report, Yves Smith is a crank, etc. But even that would be a major story, and if they have done the research supporting that conclusion, why not report that result? And, notably, one doesn’t even see this argument put forward based on any actual evidence gathering even by outlets that would be friendly to banks such as National Review or the WSJ editorial page. So one is left discarding as highly unlikely the possibility that the media has looked at the evidence and found nothing.
In the end, we come back to the likelihood that what’s left of major news media in the U.S. sees a world historical crime being committed against the population of the country, but it lacks the resources to even investigate.
That is a really good point. I’ve been asking myself why the banks don’t get out there and defend themselves more vigorously. My conclusion is that they are so scared they are paralyzed. And if the NYT doesn’t have the money to do an investigation (even with all of Carlos Slim’s money?) it shouldn’t stop the banks from coming forward with their own evidence. But wait, I forgot, it’s the banks who don’t have any money…
Morgenson (NYT) and Rosner’s book, Reckle$s Endagerment nicely debunks the lack of MSM resources argument.
They’ve done a fine job telling the story to date. In GM’s case I don’t think her research for the book was independant from her day job, nor Rosner’s, so it doesn’t look like it’s extra resources the MSM needs to produce an MSM disgestible presentation of the state of play.
I think it’s more that the state of play is really so dire that no one in the MSM dare touch it till a few more shoes drop. They’re simply too terrified. Every powerful ox is in line to be gored.
Its the journalistic equivalent of they’re all guilty, so they’re all innocent. We’ll get to reporting once that equilibrium shifts.
Till then Yves and co can own the story(s) and take the risks.
And when everybody is guilty? No one will be…
1. Journalists were never paragons of virtue, but back in the day they felt little to no solidarity with Wall Street banksters, federal mandarins, or NY lawyers. All that changed. Now journalists see themselves as the same class; more white shoe than shirtsleeves.
2. Don’t expect too much from the heavily Jewish media vis-a-vis investigating and reporting on the behavior of heavily Jewish banksters, federal mandarins, or NY lawyers. Look for more enthusiasm when they investigate Texas oil men or NJ garbage haulers.
The last paragraph is a little obscure. It seems to me that a solution to the housing mess would not result in higher values, but rather lower aggregate debt against the housing stock. Housing values probably are going to go down some more whether or not there is a solution since prices need to be in equilibrium with incomes, which are not growing. Obviously markets are local, so that equilibrium on the beach in La Jolla, CA isn’t going to be the same as in Paducah, KY. If the hypothetical debt/foreclosure solution results in prices dropping a further 15%, but then stabilizing rapidly, is that a good thing for this administration?
Could this topple the Federal Government? If the states are shown to be following the rule of law and Washington DC is obvious not for the citizen’s interests and has to step on states’ rights to protect the corruption?
Naw. They put us into a war because they can’t handle the volume of blowback, and the volume of ongoing crises that keep shitsplattering the fan. You know, kill off all those peasants who keep causing all the problems, so they can get back to 10% inflation the way god intended a money system to operate.
This will topple the government, barring a massive internal reform.
The only question is when. This sort of collapse often has a decades-long delay time. The collapse of the ancien regime in France was clear and obvious to any observer with the data…. at least 30 years before it happened. Calling the timing is practically impossible.
Vegas used to be fun, now its just a bubble that popped
Let us see the mass media shine the light on Yves’ Nevada/BofA dealings. And really smell the revolting stench of corruption from the media to banks to Justice Dept to Congress and on and on…
This is a very impressive and passionate summation of the state of decay, incompetence and unbridled greed of banks, who continue to victimize and humiliate so many of their borrowers. The corruption of common decency, business integrity and personal/institutional responsibility is running rampant in so many other vital fields in our society. It is sad to see how the banks’ behavior is so emblematic of our country’s multifaceted decline, and, frankly, I don’t see a positive end in sight. Whatever hopes AG Miller’s investigation held at its inception are now vaporized too. Though I don’t expect much from him, Obama has a golden opportunity to begin a reversal of his abysmal record on the economy and particularly with HAMP. If he wanted to hear cheerful screams of approval from millions of mortgage holders during his Sept 8th speech, he should announce a drastic and binding acceleration of the HAMP program. He needs to first admit that his original approach was well-intentioned but also a failure for the lacked of enforceability. He needs to correct this with a new forceful mandate that can be legally imposed on the banks, that would grant instant permanent modifications to all those who are in the program, paying their trial-payments religiously, while being tortured for the past two years with endless and senseless delays. It would be nice to hear him offer this as an initial step to correct the sub-prime loan related crimes committed by these banks. As I said, it would be nice, but I am not holding my breath.
The reason for the securitization fraud tracks to the academic charlatans who specifically told the banks what they wanted to hear. That bad loans could be deep sixed forever into the mortgage pool, an insurance type situation, to be laid off on sucker buyers. The academic charlatans might actually be that stupid. Or, they too might be just sucking fees to issue opinion letters to tell a client what it wants to hear. At some point in the system, you have to have intelligence good faith, and the willingness to draw a line. Lots of lawyers have this ethic. But others do not.