Category Archives: Real estate

Latest Attorney General Bailout Plan: Give Banks “Get Out of Jail Free” Card for a Few Refis

Attorney General Tom Miller of Iowa, who is leading the whitewash once known as the 50 state attorney mortgage settlement negotiations (7 have defected), reliably, every few weeks, has gotten word to the media that a deal is weeks away. This has been going on so long that it is easy to ignore it, particularly since the absence of key states is going to reduce the importance of any settlement being reached.

Note we’ve been skeptics of a deal happening unless the AGs capitulated on a release of liability. And that is the latest plan.

We have a combo plate of stories, one in the Wall Street Journal yesterday morning and a further critical tidbit from Reuters this evening that together give an overview of Miller’s latest effort to push a deal over the goal line. The latest idea is as bad as we feared.

Attorney General Beau Biden on Investigating the Mortgage Mess

The Dylan Ratigan show is on a roll this week. The program today included a segment with one of our heros, Delaware attorney general Beau Biden, who was early to join New York’s Eric Schneiderman in questioning the now less than 50 state attorney general mortgage settlement. He also joined the FDIC, Schneiderman and a large number of investors in objecting to a proposed $8.5 billion mortgage settlement by Bank of America.

Biden makes a clear and concise statement of the major issues:

“Zombie Mortgages” Mean Delay of Housing and Economic Recovery Well Past 2014

A new research piece from Barclays raises some far reaching implications.

Many economic pundits forecast the housing market will bottom in 2012 and start recovering thereafter. I’d like to know exactly how that happens when the odds of a Eurobanking crisis is the next six months look high, and it’s bound to blow back to the US.

But even the more realistic pundits (meaning those not in the employ of financial firms) may be unduly optimistic.

More Proof of Federal Coverup of Mortgage Fraud: Robosigner-Equivalents Hired to Review Foreclosure Files in Required Audits

Georgetown law professor and securitization expert Adam Levitin has come upon a real doozy in terms of how banking regulators aren’t even bothering to mount a serious pretense that their much-touted efforts to rein in mortgage abuses are anything more than a coverup for the banks. And he is suitable irate.

California Attorney General Harris Now Signaling Willingness to Rejoin Foreclosure Talks

Dave Dayen saw this one coming. When Kamala Harris said she was not willing to participate in the so called “50 state” attorney general mortgage negotiations, he recognized Harris’ refusal to join the New York attorney general Schneiderman’s group as a bad sign. Note that the state of the talks is persistently misreported in the MSM as being only Schneiderman, when Delaware, Massachusetts, Kentucky, Nevada, and Minnesota are also out of the talks.

It is a safe bet that the Democratic party has been muscling Harris since her defection last week.

Quelle Surprise! Servicer Consent Orders Producing Expected Whitewash

We were far from alone in criticizing the servicer consent orders issued earlier this year. They were yet another whitewash masquerading as regulatory action, orchestrated by the banking industry toady, the OCC. As we wrote:

The current end run is apparently led by the Ministry of Bank Boosterism more generally known as the OCC and comes via consent decrees that were issued Wednesday (we’ve made that inference given the fact that John Walsh of the OCC presented the findings of the so-called Foreclosure Task Force, an 8 week son-of-stress-test exercise designed to give the banks a pretty clean bill of health, as well as media reports that the OCC was not participating in the joint state-Federal settlement effort).

This initiative is regulatory theater, a new variant of the ongoing coddle the banks strategy. It has become a bit more difficult for the officialdom to finesse that, given the extent and visibility of bank abuses. Accordingly, the final consent decrees are more sternly worded and more detailed than the drafts we saw last week, and also talk about imposing fines. But reading them reveals that there is much less here than meets the eye.

One Third of Americans One Paycheck Away From Homelessness

This stunning factoid was reported in DS News last week and appears not to have gotten the attention it deserves. A mid-September survey ascertained that a full one third of Americans were living paycheck to paycheck, and if they lost their job, they would not be able to make their next rent or mortgage payment. And the article stresses this was not a function of being in or near the poverty line (hat tip reader May S):

PR Watch: Iowa Attorney General Tom Miller Still Flogging Dead Horse of Mortgage Settlement Negotiation

Sometimes, when you’ve dug yourself a really, really deep hole, the only option is to keep digging in the hope you’ll somehow come out the other side.

We’ve been perplexed for months with the persistent PR push to pretend that the formerly “50 state” attorney general mortgage settlement negotiations were going anywhere. And bizarrely, in true zombie fashion, the press push continues unabated even as the talks are effectively dead.

Game Over: California Attorney General Breaks From “50 State” Mortgage Settlement

We’ve been saying for months that the 50 state attorney general settlement was not going to happen. Despite the vigorous efforts by people on the side of the Federal regulators involved in the negotiations and Tom Miller’s (the AG leading the negotiations’) office to make it seem as if the deal was moving forward, the content of the reports showed otherwise. There was a huge gap between the positions of the banks and even the bank friendly position of the state AGs at the table and the banking regulators. Like the Vietnam War, where negotiations of two fundamentally opposed dragged on till one side capitulated, there was not going to be a settlement that was anything other than an abject sellout with a 11 figure payoff to mask that fact. And there were too many attorneys general who were already troubled by the terms of the deal that Miller had put forward for that to happen.

Now that Kamal aHarris, the California state attorney general, has officially abandoned the talks, they don’t mean much, at least from the state side. The departure of such a big state, in population, foreclosure exposure, and Electoral college terms, along with other states (New York, Delaware, Nevada, Massachusetts, Kentucky, Minnesota, likely Arizona) means any settlement has limited practical meaning from the state side and even less credibility.

Protestors Disrupting Foreclosure Auctions in California

By Timothy Y. Fong, an attorney in the San Francisco Bay Area who practices in the field of foreclosure defense litigation. His e-mail address is tyfong919 at gmail.com

On Monday afternoon at 12:00 p.m., a group of protesters organized under the umbrella of the “Make Banks Pay California” campaign picketed a foreclosure sale at the Alameda County Courthouse located at 1225 Fallon Street, Oakland California.

I had heard about the protest from a contact in the real estate industry, and so I resolved to go down and see what it was about. I went specifically as an observer and not as a protester.

Banking Updates: More 50 State Settlement Follies; Moody’s Downgrade of Bank of America

I don’t mean to sound as if I am hectoring Shahien Nasiripour, since he has doggedly and successfully broken quite a few banking stories when he was at Huffington Post, which lead the Financial Times to snatch him up. That’s tremendous validation for a young reporter.

However, the conventions of reporting (and it may reflect FT style preferences) are having two unfortunate side effects on his latest article about the so-called 50 state attorney general settlement.

Bank of New York: A Train Wreck Waiting to Happen?

Many readers no doubt know that the so-called $8.5 billion Bank of America mortgage settlement, which was between the Charlotte bank and the Bank of New York as trustee for 530 residential mortgage securitizations, had run into some very serious headwinds. The deal had to be approved in a so-called Section 77 hearing; a number of interested parties, including some investors, the attorneys general of New York and Delaware, and the FDIC, raised questions and objections to the deal, as well as to the use of a Section 77 hearing (which sets a very high bar for opposing an agreement). Although this saga has a quite a few more rounds to go, it looks likely that any settlement will be considerably delayed and will wind up costing Bank of America a good bit more than $8.5 billion.

What has gotten less attention is the implication of the probable derailment of this deal for the Bank of New York, and its vulnerability to mortgage litigation.