We all know there is no justice when it comes to criminal and even civil prosecutions for the financial crisis. We all know there is no justice when it comes to foreclosures. Are you aware the Obama administration is about to let the banks once again off the hook?
U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, were partners for years at a Washington law firm that represented a Who's Who of big banks and other companies at the center of alleged foreclosure fraud.
Great, so the highest prosecutor in the land had the Banksters as clients for years.
Holder and Breuer were partners at Covington, the firm's clients included the four largest U.S. banks - Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co - as well as at least one other bank that is among the 10 largest mortgage servicers.
Reuters is really piecing together the implications with this paragraph. Wow!
Holder has resisted calls for a criminal investigation since October 2010, when evidence of widespread "robo-signing" first surfaced. That involved mortgage servicer employees falsely signing and swearing to massive numbers of affidavits and other foreclosure documents that they had never read or checked for accuracy.
Even 60 Minutes asked why isn't anybody in jail? Story after story on banks committing mortgage fraud appear yet almost nothing is done. We also see fines being a token pay to play fee in comparison to the loot made off of the toxic housing bubble. The statistics show prosecutions of financial crime generally are way down with this administration. Multiply that statistic by the worst financial disaster since the Great Depression and it's downright criminal to see this lack of justice.
To wit, we now have a sweetheart deal being pushed by the Obama administration to completely let banks off the hook for mortgage fraud. The settlement deal with all 50 states literally absolves banks of civil liability for mortgage fraud, misconduct and abuses. The settlement is $25 billion yet the banks made much more than that with their fraudulent foreclosures. Just look at the booty of the top 5:
The nation’s five largest mortgage firms – BofA, JPMorgan, Wells Fargo, Citigroup and Ally – saved more than $20bn since the housing crisis began in 2007 by taking short-cuts in processing troubled borrowers’ home loans, according to a presentation prepared for state attorneys-general last year by the US Consumer Financial Protection Bureau.
The kicker on this deal requires all 50 state attorney generals to sign on and drink the Kool-Aid. Naked Capitalism is hot under the collar on this one.
The latest bit of corrupt behavior is that the Obama administration has a full court press on to push the heinous “multi-state” settlement deal over the line. We’ve pooh poohed previous reports from Iowa state attorney general Tom Miller that a deal is just around the corner, since he’s been doing his variant on a Chicken Little act for a full year. But it appears the President wants a talking point, ideally for the State of the Union address or as shortly thereafter as possible.
So this time is different: the administration is putting far more pressure on the dissident and skeptical Democratic attorneys general. And precisely because Tom Miller’s efforts have appeared to be going nowhere, particularly after California AG Kamala Harris left the talks, the grass roots effort to oppose the talks has slackened off.
There is an online petition for no sweetheart deal with big banks. It has 350,000 signatures already. Word from Obama? Supposedly instead of obtaining justice, the administration is simply strong arming state attorney generals to agree to the sweep it under the rug agenda. We'll see if Naked Capitalism is right and this deal is peddled like other snake oil in the SOTU speech.
Our Future, is pushing for this deal to be stopped. Beyond the lack of justice, here's the real meat of Eric Holder's deal and why it is so unjust. It squeezes the very investors who took the hit on toxic mortgages originally. The banks themselves ain't gonna pay a dime.
Banks deceived investors into buying bundled mortgages (mortgage-backed securities) that they knew were worth far less than they were paying. Now, as part of this settlement deal, they could shaft those investors again. Many of the investors are from the 99 percent, not the one percent. As the head of the Association of Mortgage Investors told the Financial Times, "It would be a pyrrhic victory to settle the mortgage crisis with the money of public institutions, pension funds and seniors."
The proposed deal would force banks to meet a certain dollar limit for reducing mortgage principal. But it's designed to let them use other people's money - mortgage investors' money - to reach that limit. They would have to reduce principals by a larger amount if they were using someone else's money.
This deal reads like a crime scene clean-up ad, sweep-pro, like it never even happened.