Massachusetts’ Senator Elizabeth Warren gave a series of resounding speeches in opposition to a recent provision passed in the 2015 federal budget “Cromnibus” spending bill. The contested provision weakened the Dodd-Frank law, thereby allowing big banks like CitiGroup to gamble on risky investments with taxpayers’ money. Such a provision is not unique to the 2015 “Cromnibus” spending bill, in fact it’s identical to those “Too Big to Fail” provisions which lead to the 2008 financial crisis.
Well what do you know.
Earlier this week I blogged about the mortgage settlement documents and their stunning lack of detail on the frauds committed by the banks during the days of robosigning.
I was frustrated because it seems like the complete recklessness of the banks was being whitewashed in order for the settlement to go through.
Turns out I was just looking in the wrong place.
Just as the Department of Justice announced that the mortgage settlement had been filed in court, Housing and Urban Development released the results of a series of stinging audits, one for each lender in the settlement.
It was HUD’s investigation that helped lead to the settlement in the first place.
The settlement is hundreds and hundreds of pages. Most of the audits were around 10 pages long. Yet there is more harsh truth about how far the banks went to rob people of their homes in those select pages than in the entire settlement.
So what’s in these audits that is so damning?
Facts. Numbers. Witness Statements. And just how far the banks went keep the lid on how pervasive robosigning was
In other words, plenty to make your skin crawl. There’s no whitewashing here.
In Bank of America’s case, their attorneys interfered with HUD’s investigation, refusing to allow some of their employees to answer questions, sometimes stopping them mid-sentence.
Ally Financial’s attorneys made 18 current employees plead the fifth and blocked them from talking to investigators.
It’s 4th and Inches, the score is tied, and it would be nice to avoid overtime.
Today we could learn whether the much-discussed robo-signing settlement with Wells Fargo, Bank of America, JP Morgan Chase, Ally Financial and CitiGroup will come to pass, and in what form.
With California AG Kamala Harris returning to the negotiating table, the deal looks closer than ever to being sealed. Harris, who represents the state with the largest amount of foreclosed homes, has rightfully been hesitant to sign off because her state has the most to gain, or lose, from this deal.
We were initially very hesitant to see this deal go through ourselves, but the time has come for it to put to bed.
Because we feel the deal in its current form does a lot. Does it help every single homeowner who’s underwater? Of course not. There is no deal that will.
But here is who it does help. The homeowners who have fought to keep their homes from day one, who were at the forefront of these legal challenges against the banks. Much of what we have learned about robo-signing and the lack of standing banks had to bring foreclosure, would not have come to light without these crusaders, and its time they got a reprieve.
In theory it also helps the responsible homeowners, the ones who paid their mortgages on-time and whose homes went underwater through no fault of their own. They too need to be rewarded.
“The SEC runs a revolving door of crony capitalism where attorneys and enforcement officers come and go exchanging positions with Wall Street and the large banks as frequently as you and I change our underwear.”
Last month we told you about a federal judge pulling a not-so-fast on the Security Exchange Commission and demanding a closer look at a $285 settlement with Citigroup that Roy Oppenheim called a ‘get out jail free card’ for the banking giant.
Well ladies and gentlemen this week Judge Jed Rakoff has stuck up for the homeowner once again and struck down the settlement, which would have allowed Citigroup to skate without having to admit any wrongdoing in a 2007 toxic mortgage deal.
In his written decision the judge said he spent hours going over the settlement, and ultimately concluded it was “neither fair, nor reasonable, nor adequate, nor in the public interest.”
Florida foreclosure attorney Roy Oppenheim has been calling shenanigans on this settlement ever since it was first announced, and now we’re glad to see Judge Rackoff stand up and take action against the bank. He had previously called this settlement a ‘sweetheart deal’, and he was absolutely right. As Oppenheim has said on far too many occasions, there can be no changes to the banking industry without accountability, and Judge Rakoff has finally demanded it.
He also held the SEC to task yet again for their failure to hold the banks up to scrutiny and by failing to assess blame. By allowing these financial institutions to enter into these settlements without addressing the charges against them Rakoff added that the SEC “deprives the court of even the most minimal assurance that the substantial injunctive relief it is being asked to impose has any basis in fact.”