FORECLOSED ON AMERICA – OBAMA AND HIS CRIMINAL BANKSTERS
ARE STILL LOOTING US AND PROTECTED BY THE BANKSTER BOUGHT AND OWNED OBAMA!
THE WASHINGTON POST
3-15-2012
|
*
Supervisors
directed banks’ mortgage misconduct, HUD report says
By Brady
Dennis, Published: March 13
Employees
at major banks who churned out fraudulent foreclosure documents, forged
signatures, made up fake job titles and falsely notarized paperwork often did
so at the behest of their superiors, according to a federal
investigation released Tuesday.
It’s
well documented that the nation’s biggest banks routinely “robo-signed” legal
papers to keep up with the wave
of foreclosures brought on by the housing bust. But the new report from the
inspector general of the Department of Housing and Urban Development reveals
that those shoddy practices often came at the direction of managers at the
banks, and that employees in some cases were judged by how fast they could get
new foreclosure filings out the door.
“I
believe the reports we just released will leave the reader asking one question:
How could so many people have participated in this misconduct?” David Montoya,
HUD inspector general, said in a statement. “The answer: simple greed.”
HUD
investigators launched their inquiries soon after news of the banks’ practices
caused a national uproar in late 2010, and government officials used their
findings as they negotiated a recent landmark
$25 billion settlement with the banks.
HUD
reviewed foreclosure practices at all five banks involved in the recent settlement
— Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
They issued subpoenas, pored over personnel files, conducted interviews with
scores of employees and examined the quality control measures — or lack thereof
— at the banks’ mortgage servicing units.
Repeatedly,
according to the report, investigators were hampered by poor record-keeping at
the banks, sluggish responses to requests for documents and an unwillingness to
make employees available for interviews or to allow them to answer detailed
questions at the virtual foreclosure factories where they worked.
Nevertheless,
investigators pieced together a picture of a deeply flawed system riddled with
errors, where employees often had little or no training, where managers encouraged
wrongdoing and where haste trumped all else.
At
Bank of America, for instance, performance reviews revealed that employees
often were judged based on how quickly they worked and how many files they churned
through, the HUD report stated. One manager noted in an employee review: “Your
stats so far this year are as follows: Affidavits 46.97 per hour (standard is
49 per hour), Assignments 54.74 per hour (standard is 51 per hour) and DocEx
49.67 per hour (standard is 46 per hour).”
At
Chase, operations supervisors “routinely signed foreclosure documents,
including affidavits, certifying that they had personal knowledge of the facts
when they did not,” nor did those supervisors bother to verify the accuracy of
the documents they signed, according to the report.
In
addition, the supervisors said in interviews with HUD officials that they often
signed affidavits as an “assistant secretary” or “vice president” of Chase,
when those were not their official titles. Rather, they were given those titles
by Chase for the sole purpose of allowing them to sign legal documents. The
titles came with no other duties or authority, the report said.
In
one review of 36 foreclosure filings, Chase was able to provide documents
showing the amount the borrowers presumably owed in only four of the cases. Of
those, three proved inaccurate, investigators said.
At
Wells Fargo, according to the report, numerous employees hired as so-called
robo-signers had little or no education beyond high school and little or no
experience in banking or real estate. One employee with the title of “vice
president of loan documentation” had previously worked at a pizza restaurant
and as a bank teller. Another had been a department store cashier and a
day-care worker.
At
Wells Fargo, the report said, employees faced ever-shrinking time frames to
process the tidal wave of paperwork. In one March 2008 e-mail, employees were
told that they would be required to sign the more than 100 affidavits they
received at 9 a.m. each day by noon the same day.
One
mid-level manager at the bank told investigators that she discreetly undertook
a two-week study in which she and her staff actually read and verified the
documents before signing them. Her goal, she said, was “to conclusively show
that her department was understaffed and what staffing level would be required
to properly prepare and sign the affidavits.”
Within
a few days, however, higher-level managers noticed a growing paperwork backlog.
“The midlevel manager was directed to stop the study and return to the practice
of signing affidavits without reading or verifying data,” the HUD report said.
At
Citigroup, some employees told investigators that they signed as many as 200
documents a day and that the numbers grew over time. One employee “indicated
that he would sometimes receive 1- to 2-inch stacks of documents multiple times
in a day,” the report said.
At
Ally Financial, one employee “routinely” signed 400 foreclosure affidavits per
day and up to 10,000 affidavits per month, and notaries routinely approved
documents for which they didn’t witness the signatures.
“The
memorandum references activities from over a year ago that have been addressed
as we do all we can to modify loans when possible and to ensure foreclosures
are fair when they are unavoidable,” Bank of America spokesman Rick Simon said
in response to the HUD report’s findings.
Citigroup
responded that the bank has strengthened the way it processes foreclosures.
“Since 2007, Citi has worked hard to help families in their efforts to avoid
potential foreclosure and stay in their homes,” the bank said in a statement.
“Further, as the volume of foreclosures increased in 2009, Citi self-identified
opportunities to improve its foreclosure processes and proactively undertook
actions to enhance its policies and controls. These included: consolidating
operations into one central unit; significantly reinforcing the size and
training of our staff; and tightening control processes.”
The
long-awaited
settlement with the banks filed Monday in federal court is intended in part
to end the unsavory practices detailed by HUD investigators. In addition to the
$25 billion designated to help struggling borrowers and compensate foreclosed
homeowners, the deal includes measures aimed at forcing banks to overhaul the
way they pursue foreclosure cases and the way they deal with homeowners hoping
to modify loans.
The
settlement, which must be decided on by a federal judge, also creates a
full-time monitor’s position to oversee and enforce the terms of the agreement
if banks fail to make the required changes.
*
http://mexicanoccupation.blogspot.com/2012/02/foreclosed-on-america-obama-his-crimnal.htmlFORECLOSED ON AMERICAN – OBAMA & HIS CRIMINAL BANKSTER DONORS AT WORK WITH THE HELP OF HIS CLOSEST AND MOST CORRUPT DEMOCRATS.
THE FIRST DAY OF OBAMA’S
ADMINISTRATION HE WENT ABOUT BUILDING HIS ADMINISTRATION WITH ADVOCATES FOR
OPEN BORDERS AND LA RAZA SUPREMACY, INCLUDING PUTTING FORMER MEXIFORNIA
CONGRESSWOMAN (LA RAZA SUPREMACY PARTY) IN AS SEC. OF ILLEGAL LABOR. THEN OBAMA
SURROUNDED HIMSELF WITH BUSH’S MOST CORRUPT WALL ST ADVISORS, INCLUDING BUSH’S
ARCHITECT FOR NO-STRINGS BANKSTERS’ BAILOUTS, TIM GEITHNER.
THEN OBAMA MADE SURE TWO OF THE
MOST BANKSTER-BOUGHT CORRUPT DEMS, CHRIS DODD AND BARNEY FRANK WERE BROUGHT IN
TO MAKE SURE THERE WOULD BE NO REAL BANKSTER REFORM. WHAT LITTLE “REFORM” DID
COME OUT OF IT THE BANKSTERS ARE NOW NEUTERING AS THEY PULL IN BILLIONS IN
PROFITS!
NOT ONE CRIMINAL BANKSTER HAS GONE TO PRISON!
IN FACT, UNDER OBAMA, THINGS ARE
LOOKING QUITE ROSY!
WHILE OBAMA WAS A SENATOR, THE
BANKSTERS WERE TAKING MEASURES TO MAKE SURE THEIR TOXIC MORTGAGES COULD NOT BE
EASILY REWOUND IN BANKRUPTCY COURTS. THEY USED ONE OF THE SENATE’S GREATEST WHORES,
SEN. DIANNE FEINSTEIN TO FRONT THEIR “BANKSTERS’
BANKRUPTCY REFORM”, PUTTING BANKS ABOVE CONSUMER RIGHTS.
TWO OF BUSH’S WAR PROFITEER, DIANNE
FEINSTEIN’S BIGGEST DONORS ARE BANK of AMERICA and WELLS FARGO (WHICH IS BANKSTERS TO THE MEXICAN DRUG
CARTELS). AT THE TIME FEINSTEIN WAS SERVICING HER BANKSTERS, WELLS FARGO
HAD ALREADY HAD THEIR CALIFORNIA MORTGAGE LICENSE REVOKED IN THE STATE OF
CALIFORNIA FOR MORTGAGE FRAUD, AND CORPORATE MALFEASANCE. IN 2003 WELLS FARGO
WENT INTO OPEN COURT DEMANDING THEIR CA MORTGAGE LICENSE BE REINSTATED. THE
COURTS REFUSED! IT REMAINS REVOKED TO THIS DAY!
WELLS FARGO SIMPLY DECLARED ITSELF
ABOVE STATE LAW, AND WHAT BANKS DON’T OPERATE ABOVE THE LAW? AND WENT ON
MARKETING THEIR TOXIC MORTGAGES AROUND THE NATION, AND IN SO DOING CAUSING
COMMUNITIES TO ULTIMATELY GO INTO MELTDOWN FROM IT!
FEINSTEIN’S PAYMASTERS AT BANK of AMERICAN and WELLS FARGO WERE ALSO MAKING HEFTY FEES HANDING LA RAZA ILLEGALS MORTGAGES BASED ON FRAUD DOCS, AND STOLEN SOCIAL SECURITY NUMBERS. THEN THE BANKS DUMPED THESE ON UNSUSPECTING INVESTORS, KNOWING IT WOULD BE THE TAX PAYERS THAT ULTIMATELY WOULD EAT IT AS ALWAYS.
FORECLOSURES ARE HIGHEST IN STATES WITH THE LARGEST NUMBER OF ILLEGALS. CA IS NOW HALF LA RAZA, NEVADA IS NOW ONE-THIRD ILLEGAL, ARIZONA HAS MILLIONS OF ILLEGALS!
FOLLOWING FEINSTEIN’S PUSH FOR
“BANKSTER BOUGHT BANKRUPTCY REFORM, AND VOTING FOR THE BANKS WAS HILARY CLINTON, BARBARA BOXER, JOE BIDEN,
AND VIRTUALLY THE ENTIRE LIST OF THE MOST CORRUPT DEMS IN CONGRESS. ALL ARE
ALSO ADVOCATES FOR OPEN BORDERS, NO E-VERIFY, AND LA RAZA DREAM ACTS TO KEEP
WAGES DEPRESSED AND THEIR CORPORATE PAYMASTERS HAPPY AND GENEROUS!
OBAMA DID NOT VOTE FOR THE
“BANKRUPTCY REFORM”… AND EVEN STATED AS ONE OF HIS CAMPAIGN LIES AS HE DANCED
HIS “CHANGE” TUNE TO A GUILABLE NATION, THAT HE WOULD RESTORE CONSUMERS’ RIGHTS
AGAINST THE BANKSTER IN BANKRUPTCY COURTS!
IF OBAMA DOES ONE THING WELL OTHER
THAN PERFORM AS A POPULIST, IT’S LIE AND GO LIMP WHEN HE’S TOLD BY HIS WALL ST
PAYMASTERS.
OBAMA COULDN’T HAND THESE BANKSTER
ANY AND ALL THEY WANTED FAST ENOUGH!!! HE HANDED OUT THEIR LOOTINGS WITH
NO-STRINGS!
BOTH WELLS FARGO and BANK of
AMERICA WERE HANDED NO-STRINGS WELFARE WHICH THEY TURNED AROUND AND BOUGHT
OTHER BANKSTERS WITH! WELLS FARGO HAS MADE MASSIVE PROFITS IN FORECLOSURE FEES
THEY CAUSED EVEN HAS COMMUNITIES NATIONWIDE PAY OFF THE STAGGERING COST OF
FORECLOSURE MELTDOWNS.
OBAMA NEVER DID STAND UP TO THE
BANKSTERS LIKE HE PROMISED, BUT THEN THIS IS THE CLOWN THAT LIED ABOUT
OBAMAcare NOT INCLUDING ILLEGALS!!!
PROBABLY THE ONLY HONEST THING
OBAMA HAS EVER SAID AS PRESIDENT WAS ON THE SENATE FLOOR, STATE of the UNION
MESSAGE:
“I’m not here to punish
banks!”
NO PRESIDENT IN HISTORY HAS TAKEN
MORE BRIBES FROM BANKSTERS THAN OBAMA! WHEN ASKED IN AN INTERVIEW AT THE WHITE
HOUSE WHY HE HAD NOT GONE AFTER THE BANKS, OBAMA QUICKLY BLAMED THE HOLDER
DEPT. of JUSTICE FOR NOT DOING ANYTHING… THE SAME LA RAZA DEPT OF JUSTICE OBAMA
HAS USED TO SUE FOUR STATES, SABOTAGE E-VERIFY TO HELP PUT ILLEGALS IN OUR
JOBS, AND FIGHT AGAINST ILLEGALS HAVING TO PRODUCE NON-FRAUDULENT IDs BEFORE
THEY VOTE!!! WE KNOW WHO HOLDER WORKS FOR JUST AS WE KNOW WHO OBAMA WORKS FOR…
LA RAZA and the BANKSTERS!
DIANNE FEINSTEIN IS ONE THE MOST
CORRUPT POLITICIANS IN AMERICAN HISTORY. SHE HAS HANDED OVER BIG CAMPAIGN
BRIBES TO CORRUPT DEMS AROUND THE COUNTRY TO ASSURE THEIR COOPERATION IN
SABOTAGING ANY SENATE ETHICS INVESTIGATIONS INTO HER CRIMES. FEINSTEIN AND
BOXER HAVE VOTED AGAINST ANY AND ALL SENATE CORRUPTION REFORMS. FEINSTEIN’S BRIBES HAVE BEEN PAID OUT TO
BOXER, CLINTON, KERRY, JOE LIEBERMAN, THE OTHER WAR WHORE, AND OF COURSE,
BARACK OBAMA!
WE KNEW THERE WOULD BE NO “CHANGE”
WHEN OBAMA HAD FEINSTEIN, BUSH’S WAR PROFITEER, GIVE HALF OF THE INAUGURAL
ADDRESS WITH HER PIMP HUSBAND, RICHARD BLUM, SITTING RIGHT BEHIND OBAMA ON THE
INAGURAL STAND.
FEINSTEIN, A LA RAZA ENDORSED ADVOCATE
FOR OPEN BORDERS, AMNESTY, NO E-VERIFY, NO ENGLISH ONLY, NO I.D. REQUIRED OF
ILLEGALS VOTING, HIRES ILLEGALS TO WORK CHEAP AT HER S.F. HOTEL, ONLY MILES
FROM HER $16 MILLION DOLLAR WAR PROFITS MANSION.
FEINSTEIN’S LA RAZA PARTNER, NANCY
PELOSI ALSO HAS LONG HIRED ILLEGALS TO WORK CHEAP AT HER ST. HELENA, NAPA
WINERY. PELOSI ALSO LIED THROUGH HER TEETH ABOUT ILLEGALS NOT BEING PART OF
OBAMACARE.
LA RAZA DEMS FEINSTEIN AND BOXER
(WHO WAS REELECTED WITH THE VOTES OF ILLEGALS, AS HARRY REID WAS IN NEVADA),
HAVE ON BEHALF OF THEIR BIG AG BIZ DONORS, PUSHED THREE (3) TIMES FOR A
“SPECIAL AMNESTY” FOR 1.5 MILLION MEXICAN FARM SLAVE LABORERS, DESPITE THE FACT
THAT ONE-THIRD OF ALL ILLEGAL FARM WORKERS END UP ON WELFARE.
FEINSTEIN’S STATE OF CA PAYS OUT
$20 BILLION PER YEAR IN SOCIAL SERVICE COSTS TO LA RAZA!
DURING OBAMA’S FIRST TWO YEARS IN
OFFICE, THE BANKS PULLED IN MORE PROFITS THAN THEY DID DURING ALL EIGHT YEARS
UNDER BUSH.
FORECLOSURES ARE ALSO SOARING!
OBAMA, FEINSTEIN, BOXER, PELOSI AND REID HAVE ALL MADE JUDICIAL WATCH’S
10 MOST CORRUPT LIST! JUDICIAL WATCH.org
*
OBAMA’S CRONY CAPITALISM, A LOVE STORY BETWEEN THE ACTOR
PRESIDENT, AND HIS BANKSTER DONORS!
Records show that four out of Obama's
top five contributors are employees of financial industry giants - Goldman
Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup
($358,054).
NEW YORK TIMES
February
4, 2012
A Mortgage Tornado
Warning, Unheeded
YEARS before the
housing bust — before all those home loans turned sour and
millions of Americans faced foreclosure — a wealthy
businessman in Florida set out to blow the whistle on the mortgage game.
His name is Nye
Lavalle, and he first came to attention not in finance but in sports and
advertising. He turned heads in marketing circles by correctly predicting that
Nascar and figure skating would draw huge followings in the 1990s.
But after losing
a family home to foreclosure, under what he thought were fishy circumstances,
Mr. Lavalle, founder of a consulting firm called the Sports Marketing Group,
began a new life as a mortgage sleuth. In 2003, when home prices were flying
high, he compiled a dossier of improprieties on one of the giants of the
business, Fannie Mae.
In hindsight,
what he found looks like a blueprint of today’s foreclosure crisis. Even then,
Mr. Lavalle discovered, some loan-servicing companies that worked for Fannie
Mae routinely filed false foreclosure documents, not unlike the fraudulent
paperwork that has since made “robo-signing” a household term. Even then, he
found, the nation’s electronic mortgage registry was playing fast and loose
with the law — something that courts have belatedly recognized, too.
You might wonder
why Mr. Lavalle didn’t speak up. But he did. For two years, he corresponded
with Fannie executives and lawyers. Fannie later hired a Washington law firm to
investigate his claims. In May 2006, that firm, using some of Mr. Lavalle’s
research, issued a confidential, 147-page report corroborating many of his findings.
And there,
apparently, is where it ended. There is little evidence that Fannie Mae’s
management or board ever took serious action. Known internally as O.C.J. Case
No. 5595, in reference to the company’s Office of Corporate Justice, this 2006
report suggests just how deep, and how far back, our mortgage and foreclosure
problems really go.
“It is axiomatic
that the practice of submitting false pleadings and affidavits is unlawful,”
said the report, a copy of which was obtained by The New York Times. “With his
complaint, Mr. Lavalle has identified an issue that Fannie Mae needs to address
promptly.”
What Fannie Mae
knew about abusive foreclosure practices, and when it knew it, are crucial
questions as Congress and the Obama administration weigh the future of the
company and its cousin, Freddie Mac. These giants eventually blew themselves
apart and, so far, they have cost taxpayers $150 billion. But before that,
their size and reach — not only through their own businesses, but also through
the vast amount of work they farm out to law firms and loan servicers — meant
that Fannie and Freddie shaped the standards for the entire mortgage industry.
Almost all of the
abuses that Mr. Lavalle began identifying in 2003 have since come to widespread
attention. The revelations have roiled the mortgage industry and left Fannie,
Freddie and big banks with potentially
enormous legal liabilities. More worrying is that the kinds of problems that
Mr. Lavalle flagged so long ago, and that Fannie apparently ignored, have
evicted people from their homes through improper or fraudulent foreclosures.
Until a few weeks
ago, Mr. Lavalle, 54, had never seen O.C.J. 5595. He had hoped to get a copy
after helping Fannie’s lawyers, at Baker & Hostetler in Washington,
complete it. He didn’t.
But after
learning about its findings from a reporter for The Times, Mr. Lavalle said,
“Fannie Mae, its directors, servicers and lawyers appeared to have an
institutional policy of turning a willful blind eye to evidence of mortgage
origination and servicing fraud.”
He went on: “When
confronted directly with this evidence, Fannie not only failed to correct and
remedy the abuses, it assisted in continuing the frauds via institutional
practices that concealed fraudulent foreclosures.”
A spokesman for
Fannie Mae said in a statement last week that the company quickly addressed
several issues that were raised in the 2006 report and that it took action on
other issues associated with foreclosures in 2010. “We want to prevent
foreclosure whenever possible, but when foreclosures cannot be avoided they
must move forward in a timely, appropriate fashion,” he said.
Fannie Mae would
not say whether it had shared O.J.C. 5595 with its board of directors or its
regulator, then known as the Office of Federal Housing Enterprise Oversight.
James B. Lockhart III, who headed that regulator in 2006, said he did not
recall reading the report. “I probably did not see it as back then foreclosures
were not a very big deal,” he said.
But another report published last
fall by the inspector general of the Federal Housing Finance Agency, the
current regulator, briefly mentioned some of the problems that Mr. Lavalle had
raised. (It didn’t mention him by name.) It also faulted Fannie Mae, saying it
failed to address foreclosure improprieties that had surfaced years before.
LIKE most people,
Nye Lavalle had little interest in the mortgage industry until things got
personal. Raised in comfortable surroundings in Grosse Pointe, Mich., just
outside Detroit, he began his business career in the 1970s, managing
professional tennis players. In the 1980s, he ran SMG, a thriving consulting
and research firm.
Then he tried to
pay off a loan on a home his family had bought in Dallas in 1988. The balance
was roughly $100,000, and the property was valued at about $175,000, Mr.
Lavalle said. But when he combed through figures provided by his lender,
Savings of America, he found substantial discrepancies in the accounting that
had inflated his bill by $18,000. The loan servicer had repeatedly charged him
late fees for payments he had made on time, as well as for unnecessary
appraisals and force-placed hazard insurance, he said.
Mr. Lavalle
refused to pay. The bank refused to bend. The balance rose as the bank tacked
on lawyers’ fees and the loan was deemed delinquent. The fight continued after
his mortgage was allegedly sold to EMC, a Bear Stearns unit.
Unlike most
people, Mr. Lavalle had the time and money to fight. He persuaded his family to
help him pay for a lawsuit against EMC and Bear Stearns. Seven years and a
small fortune later, they lost the house in Dallas. Back then, judges weren’t
as interested in mortgage practices as some are now, he said.
The experience
lit a fire. Mr. Lavalle set out to learn everything he could about the mortgage
industry. In a five-hour interview in Naples, Fla., last month, he described
his travels nationwide. He dove into mortgage arcana, land records and court
filings. By 1996, he had identified what appeared to be forged signatures on
foreclosure documents, foreshadowing troubles to come. He took his findings to
big players in the industry: Banc One, Bear Stearns, Countrywide Financial,
Freddie Mac, JPMorgan, Washington Mutual and others. A few responded but later
said his claims were not valid, he said.
Now he splits his
time between Orlando and Boca Raton, advising lawyers as an expert witness.
“From my own personal experience and 20 years of research and investigation,
nothing — and I mean nothing — that a bank, lender, loan servicer or their
lawyer says or puts on paper can be trusted and accepted as true,” Mr. Lavalle
said.
FANNIE MAE, now
in government hands, has acknowledged how abusive foreclosure practices can
hurt its own business. “The failure of our servicers or a law firm to apply
prudent and effective process controls and to comply with legal and other
requirements in the foreclosure process poses operational, reputational and
legal risks for us,” it said in a 2010 filing with the Securities and Exchange
Commission.
Five years
earlier, Fannie seemed to have taken a different view. That was when Mr.
Lavalle pointed out legal lapses by some of its representatives. Among them was
the law offices of David J. Stern, in Plantation, Fla., which was handling an
astonishing 75,000 foreclosure cases a year — more than 200 a day. In 2005, Mr.
Lavalle warned Fannie Mae that some judges had ruled that the Stern firm was
submitting “sham pleadings.” Nonetheless, Fannie continued to do business with
the firm until it closed its doors last year, after evidence emerged of rampant
forgeries and fraudulent filings.
O.C.J. Case No.
5595 found that Stern wasn’t the only firm working for Fannie that seemed to be
cutting corners. It also found that lawyers operating in seven other states —
Connecticut, Georgia, New York, Illinois, Louisiana, Kentucky and Ohio — had
made false filings in connection with work for Fannie Mae or the Mortgage Electronic Registration System, or MERS, a
private mortgage registry Fannie helped establish in 1995.
“While Fannie Mae
officials do not have a single opinion, some officials believe foreclosure
counsel are sacrificing accuracy for speed,” the report said.
The lawyers at
Baker & Hostetler did not agree with everything Mr. Lavalle said. Mark A.
Cymrot, a partner who led the investigation, discounted Mr. Lavalle’s fear that
Fannie could lose billions if large numbers of foreclosures had to be unwound
as a result of misconduct by its lawyers and servicers.
Even so, the
report didn’t conclude that Mr. Lavalle was wrong on the legal issues. It
simply said that few people would have the financial resources to challenge
foreclosures. In other words, few people would be like Mr. Lavalle.
“Courts are
unlikely to unwind foreclosures unless borrowers can demonstrate that the
foreclosure would not have gone forward with the correct pleadings, which is a
difficult burden for most borrowers to meet,” the report said. “Nevertheless,
the issues Mr. Lavalle raises should be addressed promptly in order to mitigate
the risk of exposure to lawsuits and some degree of liability.” Mr. Cymrot
declined to comment for this article.
O.C.J. 5595 also
questioned Mr. Lavalle’s contention that improprieties by loan servicers were
pervasive. But based on interviews with 30 Fannie employees, the report
conceded that the company had no mechanism to ensure that servicers were
charging borrowers appropriate fees.
Other oversight
at Fannie was similarly lacking, the Baker & Hostetler lawyers found. For
instance, when Fannie identified fraud by a lender or servicer, it didn’t
notify the homeowner. Nor did it police activities of lawyers or servicers it
hired. As a result, the report said, Fannie might not be insulated from
liability for their misconduct.
Lewis D.
Lowenfels, a securities law expert, said he was perplexed that Fannie’s board
appeared to have done nothing to correct these practices. “If it had been
brought to the board’s attention that specific acts of illegality were being
committed, it should have directed that relationships with the transgressors be
terminated forthwith and Fannie Mae’s regulator be advised accordingly,” he
said.
Daniel H. Mudd,
Fannie’s chief executive at the time, declined to comment through his lawyer.
Mr. Mudd was recently sued by the S.E.C., accused of failing to disclose
Fannie’s participation in the subprime mortgage market.
PERHAPS no
development has done more to obscure the forces behind the foreclosure epidemic
than the rise of the MERS, the private registry that has all but replaced
public land ownership records. Created by Fannie, Freddie and big banks, MERS
claims to hold title to roughly half the nation’s home mortgages. Judges and
lawmakers have questioned MERS’s legal authority to initiate foreclosures, and
some judges have thrown out foreclosures brought in its name. On Friday, New
York’s attorney general sued MERS, contending that its system led to fraudulent
foreclosure filings. MERS refuted the claims and said it would fight.
Mr. Lavalle
warned Fannie years ago that MERS couldn’t legally foreclose because it didn’t
actually own notes underlying properties.
The report
agreed. MERS’s approach of letting loan servicers foreclose in its own name,
not in that of institutions owning the notes, “is not accepted legal practice
in all states,” the report said. Moreover, “MERS’s counsel conceded false
allegations are routinely made, and the practice should be ‘modified.’ ”
It continued: “To
our knowledge, MERS has not addressed the issue of its counsels’ repeated false
statements to the courts.”
Janis L. Smith, a
spokeswoman for MERS, said it had not seen the Baker & Hostetler report and
declined comment on its references to the false statements made on its behalf
to the courts. She said that MERS’s business model is legal in all states and
that as a nominee, it has the right to foreclose. MERS stopped allowing its members
to foreclose in its name in all states in 2011.
Robert D. Drain,
a federal bankruptcy judge in the Southern District of New York, said in court
last month that the failure of the mortgage industry to deal with pervasive
problems involving inaccurate documentation and improper court filings amounted
to “the greatest failure of lawyering in the last 50 years.”
In an interview
last week, Judge Drain said several practices have contributed to the
foreclosure mess. One is that Fannie and the rest of the industry failed to
ensure that MERS was operating legally in all states. Another is that the
industry failed to perform due diligence on documentation.
MERS no longer
participates in foreclosures. But a lot of damage has already been done, Mr.
Lavalle said.
“Hundreds of
thousands of foreclosures in Florida and across America were knowingly
conducted unlawfully, for which there are still severe liabilities and
implications to come for many years,” he said.
THERE was a time
when Americans had mortgage-burning parties: When they paid off a promisory
note, they celebrated by burning the release of the lien.
But they kept the
canceled promissory note — and there was a reason for that. Promissory notes,
like dollar bills, are negotiable currency. Whoever holds them can essentially
claim them.
According to
O.C.J. Case No. 5595, Fannie held roughly two million mortgage notes in its
offices in Herndon, Va., in 2005 — a fraction of the 15 million loans it
actually owned or guaranteed. Who had the rest? Various third parties.
At that time,
Fannie typically destroyed 40 percent of the notes once the mortgages were paid
off. It returned the rest to the respective lenders, only without marking the
notes as canceled.
Mr. Lavalle and
the internal report raised concerns that Fannie wasn’t taking enough care in
handling these documents. The company lacked a centralized system for reporting
lost notes, for instance. Nor did custodians or loan servicers that held notes
on its behalf report missing notes to homeowners.
The potential for
mayhem, the report said, was serious. Anyone who gains control of a note can,
in theory, try to force the borrower to pay it, even if it has already been
paid. In such a case, “the borrower would have the expensive and unenviable
task of trying to collect from the custodian that was negligent in losing the
note, from the servicer that accepted payments, or from others responsible for
the predicament,” the report stated. Mr. Lavalle suggested that Fannie return
the paid notes to borrowers after stamping them “canceled.” Impractical, the
2006 report said.
This leaves open
the possibility that someone might try to force homeowners to pay the same
mortgage twice. Or that loans could be improperly pledged as collateral by some
other institution, even though the loans have been paid, Mr. Lavalle said.
Indeed, there have been instances in the foreclosure crisis when two different
institutions laid claim to the same mortgage note.
In its statement
last week, Fannie said it quickly addressed questions of lost note affidavits
and issued guidance to servicers that no judicial foreclosures be conducted in
MERS’s name. It also said it instructed Florida foreclosure lawyers “to use
specific language to assure no confusion over the identity of the ‘owner’ and
the ’holder’ of the note.”
The 2006 report
said Mr. Lavalle at times came across as over the top, that he was, in its
words, “partial to extreme analogies that undermine his credibility.” Knowing
what we know now, he looks more like one of the financial Cassandras of our
time — a man whose prescient warnings went unheeded.
Now, he hopes
dubious mortgage practices will be eradicated.
“Any attorney
general, lawyer, bank director, judge, regulator or member of Congress who does
not open their eyes to the abuse, ask pertinent questions and allow proper
investigation and discovery,” he said, “is only assisting in the concealment of
what may be the fraud of our lifetime.”
*
Obama's Wall Street cabinet
6 April 2009
A
series of articles published over the weekend, based on financial disclosure
reports released by the Obama administration last Friday concerning top White
House officials, documents the extent to which the administration, in both its
personnel and policies, is a political instrument of Wall Street.
Policies
that are extraordinarily favorable to the financial elite that were put in
place over the past month by the Obama administration have fed a surge in share
values on Wall Street. These include the scheme to use hundreds of billions of
dollars in public funds to pay hedge funds to buy up the banks’ toxic assets at
inflated prices, the Auto Task Force’s rejection of the recovery plans of
Chrysler and General Motors and its demand for even more brutal layoffs, wage
cuts and attacks on workers’ health benefits and pensions, and the decision by
the Financial Accounting Standards Board (FASB) to weaken “mark-to-market”
accounting rules and permit banks to inflate the value of their toxic assets.
At
the same time, Obama has campaigned against restrictions on bonuses paid to
executives at insurance giant American International Group (AIG) and other
bailed-out firms, and repeatedly assured Wall Street that he will slash social
spending, including Medicare, Medicaid and Social Security.
The
new financial disclosures reveal that top Obama advisors directly involved in
setting these policies have received millions from Wall Street firms, including
those that have received huge taxpayer bailouts.
The
case of Lawrence Summers, director of the National Economic Council and Obama’s
top economic adviser, highlights the politically incestuous character of
relations between the Obama administration and the American financial elite.
Last
year, Summers pocketed $5 million as a managing director of D.E. Shaw, one of
the biggest hedge funds in the world, and another $2.7 million for speeches
delivered to Wall Street firms that have received government bailout money.
This includes $45,000 from Citigroup and $67,500 each from JPMorgan Chase and
the now-liquidated Lehman Brothers.
For a
speech to Goldman Sachs executives, Summers walked away with $135,000. This is
substantially more than double the earnings for an entire year of
high-seniority auto workers, who have been pilloried by the Obama
administration and the media for their supposedly exorbitant and
“unsustainable” wages.
Alluding
diplomatically to the flagrant conflict of interest revealed by these
disclosures, the New York Times noted on Saturday: “Mr. Summers, the
director of the National Economic Council, wields important influence over Mr.
Obama’s policy decisions for the troubled financial industry, including firms
from which he recently received payments.”
Summers
was a leading advocate of banking deregulation. As treasury secretary in the
second Clinton administration, he oversaw the lifting of basic financial
regulations dating from the 1930s. The Times article notes that among
his current responsibilities is deciding “whether—and how—to tighten regulation
of hedge funds.”
Summers
is not an exception. He is rather typical of the Wall Street insiders who
comprise a cabinet and White House team that is filled with multi-millionaires,
presided over by a president who parlayed his own political career into a
multi-million-dollar fortune.
Michael
Froman, deputy national security adviser for international economic affairs,
worked for Citigroup and received more than $7.4 million from the bank from
January of 2008 until he entered the Obama administration this year. This
included a $2.25 million year-end bonus handed him this past January, within
weeks of his joining the Obama administration.
Citigroup
has thus far been the beneficiary of $45 billion in cash and over $300 billion
in government guarantees of its bad debts.
David
Axelrod, the Obama campaign’s top strategist and now senior adviser to the
president, was paid $1.55 million last year from two consulting firms he
controls. He has agreed to buyouts that will garner him another $3 million over
the next five years. His disclosure claims personal assets of between $7 and
$10 million.
Obama’s
deputy national security adviser, Thomas E. Donilon, was paid $3.9 million by a
Washington law firm whose major clients include Citigroup, Goldman Sachs and
the private equity firm Apollo Management.
Louis
Caldera, director of the White House Military Office, made $227,155 last year
from IndyMac Bancorp, the California bank that heavily promoted subprime
mortgages. It collapsed last summer and was placed under federal receivership.
The
presence of multi-millionaire Wall Street insiders extends to second- and
third-tier positions in the Obama administration as well. David Stevens, who
has been tapped by Obama to head the Federal Housing Administration, is the
president and chief operating officer of Long and Foster Cos., a real estate
brokerage firm. From 1999 to 2005, Stevens served as a top executive for
Freddie Mac, the federally-backed mortgage lending giant that was bailed out
and seized by federal regulators in September.
Neal
Wolin, Obama’s selection for deputy counsel to the president for economic
policy, is a top executive at the insurance giant Hartford Financial Services,
where his salary was $4.5 million.
Obama’s
Auto Task Force has as its top advisers two investment bankers with a long
resume in corporate downsizing and asset-stripping.
It is
not new for leading figures from finance to be named to high posts in a US
administration. However, there has traditionally been an effort to demonstrate
a degree of independence from Wall Street in the selection of cabinet officials
and high-ranking presidential aides, often through the appointment of figures
from academia or the public sector. In previous decades, moreover,
representatives of the corporate elite were more likely to come from industry
than from finance.
In
the Obama administration such considerations have largely been abandoned.
This
will not come as a surprise to those who critically followed Obama’s election
campaign. While he postured before the electorate as a critic of the war in
Iraq and a quasi-populist force for “change,” he was from the first heavily
dependent on the financial and political backing of powerful financiers in
Chicago. Banks, hedge funds and other financial firms lavishly backed his
presidential bid, giving him considerably more than they gave to his Republican
opponent, Senator John McCain.
Alongside
Wall Street, the Obama cabinet is dominated by the military, including three
recently retired four-star military officers: former Marine General James Jones
as national security adviser; Admiral Dennis Blair as director of national
intelligence, and former Army Chief of Staff Erik Shinseki as secretary of
veterans’ affairs.
These
are the deeply reactionary political and class interests that are represented
by the Obama administration.
Friday’s financial
disclosures further expose the bankruptcy of American democracy. Elections have
no real effect on government policy, which is determined by the interests of
the financial aristocracy that dominates both political parties. The working
class can fight for its own interests—for jobs, decent living standards, health
care, education, housing and an end to war—only through a break with the two
parties of American capitalism and the development of a mass, independent
socialist movement.
Tom
Eley and Barry Grey
*
Obama’s Economic Advisers: International Socialists, Union Thugs, NBC
Execs, Soros Scholars, Subprime Lenders, Amnesty
Shills, and Campaign CroniesPosted on February 24, 2011 by Ben Johnson
Obama Quietly Erasing Borders
(Article)
Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses
BY TIMOTHY P
CARNEY
Editorial Reviews
Obama Is Making You Poorer—But Who’s
Getting Rich?
Goldman
Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack
Obama was supposed to chase from the temple—are profiting handsomely from
Obama’s Big Government policies that crush taxpayers, small businesses, and
consumers. In Obamanomics, investigative reporter Timothy P. Carney digs
up the dirt the mainstream media ignores and the White House wishes you
wouldn’t see. Rather than Hope and Change, Obama is delivering corporate
socialism to America, all while claiming he’s battling corporate America. It’s
corporate welfare and regulatory robbery—it’s Obamanomics.
*Obama Is Making You Poorer—But Who’s Getting Rich?
Goldman
Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack
Obama was supposed to chase from the temple—are profiting handsomely from
Obama’s Big Government policies that crush taxpayers, small businesses, and
consumers.
*
WHAT DID THE BANKSTERS KNOW ABOUT OUR ACTOR OBAMA THAT WE
DIDN’T KNOW?
*
Records show that four out of Obama's top five contributors
are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG
($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
BARACK OBAMA HAS COLLECTED NEARLY TWICE AS MUCH MONEY AS JOHN McCAIN
BY DAVID SALTONSTALL
DAILY NEWS SENIOR CORRESPONDENT
July 1st 2008
Wall Street firms have chipped in more than $9 million to
Barack Obama. Zurga/Bloomberg
Wall Street is investing heavily in Barack Obama.
Although the Democratic presidential hopeful has vowed to
raise capital gains and corporate taxes, financial industry bigs have
contributed almost twice as much to Obama as to GOP rival John McCain, a Daily
News analysis of campaign records shows.
GOLDMAN
SACHS IS A MAJOR OBAMA DONOR!
“Records show that four
out of Obama's top five contributors are employees of financial industry giants
- Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and
Citigroup ($358,054).”
TO WORK IN THE OBAMA ADMINISTRATION, ONE MUST COME FROM SOME
CRIMINAL WALL ST BANKSTER, OR BE A MEMBER OF THE MEXICAN FASCIST PARTY of LA
RAZA!
DO A SEARCH ON THE BLOG FOR OBAMA’S
SEC. of LABOR HILDA SOLIS, CECELIA MUNOZ AND HIS “WISE LATINA” LA RAZA PARTY
MEMBER SONIA SOTOMAYER!
“It confirms from the inside that three-and-a-half years after Wall Street’s manic pursuit of super-profits triggered a global financial meltdown and the deepest slump since the Great Depression, nothing has changed in the boardrooms of corporate America. The same fraudulent and often illegal practices that enriched the financial aristocracy and plundered the rest of society continue unabated. The criminals at the top, having been bailed out with trillions of taxpayer funds, are making more money than ever, while millions of ordinary people are being driven into poverty and homelessness.”
An insider’s view of Wall Street
criminality
15 March 2012
Greg
Smith, an executive director at Goldman Sachs, announced his resignation
Wednesday in an op-ed piece in the New York Times, denouncing the bank's
“toxic” culture of avarice and fraud.
Smith
headed the firm’s United States equity derivatives business in Europe, the
Middle East and Africa. In his column, entitled “Why I Am Leaving Goldman
Sachs,” he describes a corporate environment that encourages and rewards big
short-term returns gained through the bilking of clients and the general
public. “It makes me ill how callously people talk about ripping their clients
off,” he writes.
Speaking of one’s clients as “muppets” and describing deal-making as “ripping eyeballs out” are commonplace at Goldman, according to Smith. The way to advance at the Wall Street giant, he writes, is to persuade your clients “to invest in the stocks or other products that we are trying to get rid of,” get your clients “to trade whatever will bring the biggest profit to Goldman,” and trade “any illiquid, opaque product with a three-letter acronym.”
The
column describes an operation in which laws and regulations requiring financial
institutions to deal honestly with their clients and protect their interests
are routinely violated. The insider’s indictment of Goldman Sachs highlights a
broader process—the criminalization of American capitalism as a whole.
It confirms from the inside that three-and-a-half years after Wall Street’s manic pursuit of super-profits triggered a global financial meltdown and the deepest slump since the Great Depression, nothing has changed in the boardrooms of corporate America. The same fraudulent and often illegal practices that enriched the financial aristocracy and plundered the rest of society continue unabated. The criminals at the top, having been bailed out with trillions of taxpayer funds, are making more money than ever, while millions of ordinary people are being driven into poverty and homelessness.
Education,
health care, pensions are being gutted, wages are being slashed and more
austerity is on the agenda because there is supposedly “no money.” Corporate
profits and CEO pay, meanwhile, are setting new records.
This
is an indictment not simply of Goldman Sachs, or even Wall Street alone, but
rather the entire economic and political system. Every official institution—the
White House, Congress, the courts, the media, the Democratic and Republican
parties—is complicit.
Smith’s
column was widely reported in the media. NBC Nightly News led its report
Wednesday night with the story, interviewing a former chairman of the
Securities and Exchange Commission who was brought on to deplore the type of
practices described by the former Goldman executive. The ruling class is well
aware that popular anger against Wall Street is rising and capitalism itself is
becoming increasingly discredited in the eyes of millions of Americans—a
process that found an initial expression in the Occupy Wall Street protests. It
is concerned that Smith’s piece will further fuel this sentiment.
The
practices to which Smith points—and worse—are well known to the Obama
administration and the financial regulatory agencies. In April of last year, the Senate Permanent Subcommittee on
Investigations published a 640-page report outlining in detail the fraudulent
and illegal practices of major banks that contributed to the September 2008
crash. Fully 260 pages of that report were devoted to Goldman Sachs. They
explained chapter and verse, giving dates and naming names, how the bank
defrauded its clients by selling them mortgage securities while betting against
the same investments, without telling them it was doing so.
The
committee also documented the complicity of the credit rating firms and federal
regulators in the colossal mortgage Ponzi scheme that collapsed in 2007-2008,
setting off a new world depression. It cited securities laws that had been
violated by Goldman and two other banks it examined, Washington Mutual and
Deutsche Bank, and referred this information to the Obama administration’s
Justice Department.
The response of the White
House was to do absolutely nothing. Not a single senior bank executive has been criminally
charged, let alone imprisoned, for crimes that have devastated the lives of
countless millions of people in the US and around the world. Instead, the White
House has shielded the corporate criminals.
One
Wall Street firm after another—Goldman Sachs, Bank of America, Citigroup,
Countrywide Financial—has been allowed to settle charges filed by the
Securities and Exchange Commission out of court, paying token fines while
admitting no wrongdoing. That this continues is seen in the filing Monday in
federal court of the sweetheart settlement between five major banks and the
state and federal governments of charges arising from the banks’ illegal
processing of foreclosures. The banks have merely to pay a combined fine of $5
billion for illegally throwing thousands of families out of their homes, with
no admission of wrongdoing. In return, they get the quashing of state
investigations that threatened to result in tens of billions in damages and
fines.
Not only does the Obama
administration protect the Wall Street criminals, it includes their
representatives among its top personnel. To cite some examples:
* Mark Patterson, a former Goldman Sachs lobbyist, is the chief
of staff to Treasury Secretary Timothy Geithner.
* Dianna Farrell, former financial analyst at Goldman Sachs, is
deputy director of the National Economic Council.
* Jacob Lew, Obama’s chief of staff, was a top executive at
Citigroup. He follows two other bankers chosen by Obama to head his White House
operations—former JPMorgan executive William Daley and former Chicago
investment banker Rahm Emanuel.
The
criminalization of the American corporate-financial elite cannot be separated
from the capitalist system itself. It is the product of a decades-long process
of crisis and decay, in which the ruling elite has increasingly separated its
wealth-making from the production of real value.
Manufacturing
and the productive infrastructure have been decimated, while financial
manipulation and speculation have come to dominate economic life. The working
class has suffered a catastrophic decline in its social position at the same
time that a parasitic financial aristocracy has come to exercise a de facto
dictatorship over the political system.
Like
all aristocracies, the American financial elite will not accept any
infringement of its wealth and power. The working class must break its grip by
mobilizing its strength in opposition to both parties of Wall Street and
fighting for the establishment of a workers’ government and socialist policies,
beginning with the nationalization of the banks and corporations and their
transformation into public enterprises under the democratic control of the
working people.
Andre
Damon and Barry Grey
The
author also recommends:
The foreclosure fraud
settlement: An amnesty for Wall Street criminals
[13 February 2012]
[13 February 2012]
Senate report on Wall Street
crash: The criminalization of the American ruling class
[18 April 2011]
[18 April 2011]
No comments:
Post a Comment