Normally I’d relegate a good job of news spadework to the daily Links feature, but Bloomberg caught out Attorney General Eric Holder in such an egregious lie that this failed con job merits ample, widespread publicity and well-deserved derision.
So remember that Mortgage Fraud Task Force? No? There’s a really good reason the name doesn’t ring a bell. It’s been missing in action. As we wrote last September:
I’m sure the banksters are quaking in their boots. Eric Schneiderman, the New York state attorney general whose joining a heretofore moribund mortgage fraud task force and withdrawing from opposition to the horrid mortgage settlement allowed the Administration to push the bank-friendy deal across the line, is now making noises that really, truly, he and his Federal best buddies are gonna nail some baddies really soon. From Reuters:
The mortgage task force formed by President Barack Obama to probe misconduct that contributed to the financial crisis will soon take legal action, New York Attorney General Eric Schneiderman said on Thursday.
Schneiderman, a co-chair of the task force, would not say whether cases would be brought against individuals or financial institutions. He also would not comment on whether criminal charges would be filed.
But he said his office would take action and that he expected his federal counterparts on the task force to do so as well.
“We’ll see actions being taken sooner rather than later,” said Schneiderman, speaking in an interview at his office in New York.
The Residential Mortgage-Backed Securities Working Group was formed in January, to probe the pooling and sale of risky mortgages in the runup to the 2008 financial crisis. Obama said he was creating the group to “hold accountable those who broke the law” and “help turn the page on an era of recklessness.”
Schneiderman said he believes it is still necessary to go after the “bad actors” to restore confidence in the financial markets.
“It’s important to convey the sense that no one is above the law. There’s a set of rules to which all will be held accountable, including big players on Wall Street,” Schneiderman said.
It might help if Reuters did reporting rather than took dictation. As we pointed out in older posts, this “task force” is merely a new unit in an interagency Financial Fraud Enforcement Task Force established in 2009 which looks to have done precisely nothing since its inception. And the New York Times, which had been solidly in Scheiderman’s camp when he looked to be taking on the big banks, issued a “show me” op ed and specified what Schneiderman and the Feds needed to do to be credible
That post was in September. In October, Eric Holder announced publicly, au contraire, this task force had really been busting chops! And he cited figures of activity since October 2011 to prove it. As Jonathan Weil of Bloomberg recapped:
When Holder first trotted out these figures last October, he bragged during a press conference about the
results of the government’s “Distressed Homeowner Initiative,” which he called “a groundbreaking, yearlong mortgage-fraud enforcement effort” and “the first ever to focus exclusively on crimes targeting homeowners.” Secretary of Housing and Urban Development Shaun Donovan joined him at the press conference.
To be honest, I ignored this announcement. My assumption was that they had somehow found creative ways to attribute some of the actions of the people involved in the pretty much moribund task force to the task force itself (the Administration has done this sort of thing creative accounting elsewhere). To be honest, I didn’t regard the October announcement as credible, since this group had not launched a case against either a meaningfully large player or at conduct that was central to the crisis.
But what actually occurred was even worse than my reflexively cynical take.
Bloomberg could also tell that this story didn’t even remotely add up. Weil again:
Last October, two days after Holder first publicized the numbers, Phil Mattingly and Tom Schoenberg of Bloomberg News broke the story that some of the cases included in the Justice Department’s tally occurred before the initiative began in October 2011. At least one was filed more than two years before President Barack Obama took office….
My column about the Justice Department’s refusal to come clean ran a few days later last fall. And it seems obvious now why I wasn’t given the list. The government would have been handing me the proof that the numbers it was touting were wrong.
Weil recounts how he kept after the DoJ flack and got all sorts of promises and excuses. Finally, presumably hoping no one cares about mortgage abuses any more now that housing prices are up, the Administration came clean in the most backhanded way possible…..by issuing a corrected press release.
And how big were the corrections? You be the judge:
Originally the Justice Department said 530 people were charged criminally as part of a year-long initiative by the multi-agency Mortgage Fraud Working Group. It now says the actual figure was 107 — or 80 percent less. Holder originally said the defendants had victimized more than 73,000 American homeowners. That number was revised to 17,185, while estimates of homeowner losses associated with the frauds dropped to $95 million from $1 billion.
So get this: the number of people charged criminally was originally exaggerated more than five times. The amount of people victimized was overstated by over four times, and the dollar losses, more than ten times. And the original dollar losses were bupkis relative to the harm mortgage borrowers suffered, and the revised number, $95 million, is a pathetic joke. The Administration had the nerve to show its face and try to spin this insult as some sort of positive outcome? They’d have been better off firing everyone associated with it and handing out the money saved to Legal Aid offices all over the US. Or just give the money to homeless people in DC.
And let’s do some simple math. The average amount of damage done by each fraudster they nailed was $880,000. And the harm per homeowner averaged $5,500. Heck of a job, Brownie!
This administration deserves to get its own chapter in the updated version of Al Franken’s classic, Lies, and the Lying Liars Who Tell Them.
Re Franken: Author, read what thyself hast written.
Great title though, you gotta admit. Haven’t heard too much of him since he got elected. Toeing the party-line, is he?
“To thine own self be true.” (Polonius) Great advice, bad execution (pun intended).
As usual, thanks for the concise write up, Yves. A couple of flow disrupting typos, though: “The Administration had the never [nerve?] to show…”
“They’ve [they’d?] have been better off…”
Yves had the proofreaders to layoff lack of for donations. Which reminds me…
Also from the Yoda school of grammar:
“…since not had this group launched a case against either a meaningfully large player.”
Okay, okay, the check in the mail is.
Fixed, thanks to both of you.
The proper response to the US AG lying to us is not an apology, it is a resignation. Failing that, a general strike until he does. This needs to end.
Holder’s resignation would be wholly inadequate—prison too— even a lamppost seems too little. Ditto for lying-sack Schneiderman. ZH made that point a few days ago in response to Holder’s lying about the mortgage fraud coverup.
From gun-runner Holder, the lies are now beyond absurd. I once wondered about the bloodlust of the French Revolution and how it is that people could be driven to lose their humanity and gleefully celebrate public beheadings. Comprehension is dawning.
You would need much more then realization that AG is lying for the General Strike. I suspect that majority of people don’t know who Holder is. Probably, no earlier than there is a wide-spread hunger that people will strike.
After all that has happened in this country, it is not “surprising” to me when another lie is exposed. I’m actually a little “surprised” to discover that you’re “surprised” about a Holder lie.
According to this Dan Froomkin twitter post the DOJ quietly doctored the original press release to reflect the new numbers, effectively trying to erase the history.
Holder’s Orwellian memory hole:
Note that the update announcement on the DOJ’s website, explaining the change in numbers doesn’t provide the original numbers. Without further research, a person reading that page wouldn’t know that the number of affected individuals was formerly claimed to be five times higher.
Thank the interweb gods for the Way Back machine (and all of the people who keep it running).
Here’s the DOJ’s notice on the updated page:
What’s this? � (Does everyone see a funky symbol or just me?)
What does this mean?
Is it just me, or wouldn’t you want to be counting convictions instead of defendants? Isn’t everyone innocent until proven guilty? DOJ? (Like, thing 1?)
What’s this? � (Does everyone see a funky symbol or just me?)
Is this what it has finally come to ? ? ?
vague explanations? cryptic symbols? ..shame.
I pine for a simpler time when a former National Security Director could simply walk into the National Archives and fill his undergarments with documents, walk out, and make them disappear.
Well I thought it was funny from the lords of the internet. Can they be so far beyond us that they have their own font/punctuation when they attempt to communicate? (Does anyone remember the Invaders? Aliens who took human form but you could tell them apart from humans because their little finger was bent? wow, kinda like �) Or maybe the DOJ is just above copy/paste reality checking? What odd creatures they be.
I thought I was kidding about a DOJ font, but maybe not? Just read this comment (by Lulo) in HuffPo article about Gmail/no legitimate expectation of privacy:
What magicians they be.
Is this a red alert or a minor curiosity? Again, from the DOJ update:
What “distressed homeowner” DOJ definition? What changed? Who changed? When? Why? Who decided?
Wondering what broad and narrow mean to the DOJ at the various times when they’re measuring and reporting victims. Remember when Elizabeth Warren at the Independent Foreclosure Review hearing was trying to pin down how the defining and categorizing of victims and their awards was done? It had all neatly been announced shortly before the hearing on a one-page sheet in a table (PDF: http://www.occ.gov/news-issuances/news-releases/2013/nr-ia-2013-60a.pdf). She asked each of the representatives of the independent review consultants about that sheet and none of them knew how the results were determined. Because the banks must have decided on their own, without consulting the consultants.
Hope Weil keeps fact-checking this. I hope Yves will tell us again how much the unconsulted consultants got for their work in comparison to how much the defrauded homeowners got. I don’t remember the amounts, just that it was staggering. Useful context for this article.
Trying to answer my own question, what’s the DOJ definition of a distressed homeowner?
Distressed Homeowner Initiative web page October 2012: http://www.fbi.gov/news/stories/2012/october/dont-let-mortgage-fraud-happen-to-you – says this initiative is different from past ones, where primary victims were lenders. The bolded suspects are lawyers:
Hmmm… searched on that page for word “bank” … Phrase not found. Same thing for “servicer.”
List of Resources and links are given at bottom, including one for Financial Fraud Enforcement Task Force (http://www.stopfraud.gov/), which has a Victims of Fraud tab, which again is general, with a mortgage victim link:
Kind of short page. Victims described are “Traditional Mortgage Fraud” (homebuyer as suspect), “Mortgage Rescue and Loan Modification Scams” (suspects are “so-called foreclosure rescue companies or foreclosure assistance firms”), and “Reverse Mortgage Scams.” Resource links are provided to HUD (buy a house), NeighborWorksAmerica (affordable home, improve community), and HOPE NOW Alliance Counseling Organizations (“organizations provide borrowers with in-depth debt management, credit counseling and overall foreclosure counseling”).
But, again, no use of the word “bank,” “servicer,” or even “title” on stopfraud.gov’s mortgage victims page.
Our government has held lying as a required skill for all high office holders since WWII. The fact that it lies and serves only the interests that feed it campaign money should never be surprising.
“And the hits just keep on coming!”
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Mortgage frauds are the things which never remain hiden they are one day disclosed but hidding an mortgage fraud is just letting others to be in the trap. they should be disclosed so that they frauds can be punished.