No matter how many blogs are written, no matter how many letters from Congressman Cummings and Issa are penned, there just will not be nearly enough doe or said to protest just how badly corrupt the United States government has become, a fact most clearly manifested by these corrupt settlements…er, sellouts.
I have been focused on so many other aspects of the sellouts, but Naked Capitalism highlighted one additional fact that I haven’t focused on….
THE FACT THAT THE BANKS WERE PERMITTED TO INFLATE FEES AND EXPENSES THROUGHOUT THE FRAUDCLOSURE PROCESS….AND GET AWAY WITH IT.
Pay attention to her post which describes how the reviewers found inflated fees in nearly every file….a few hundred here….a few thousand there….after a while, they all started to add up to real money. But here’s where the rabbit hole gets real deep…..
IT’S NOT JUST CONSUMERS WHO GOT SADDLED WITH THOSE BOGUS, INFLATED FEES…..IT’S YOU AND I AS TAXPAYERS….IT’S THE PRIVATE INVESTORS THAT THE SERVICERS WERE ALLEGEDLY WORKING ON BEHALF OF…..
You see, that $100,000 homeowner foreclosure judgment loaded up with $2,500 in bogus fees does not begin and end with the homeowner….remember, the 49 State AG settlement was a False Claims case…..the servicers were inflating bogus fees, then passing those false insurance claims on to their insurors and to agencies and adjuncts of the federal government…(Click here for “OIG AUDIT REPORTS”)
Keep that in mind when you read her post:
No wonder the Fed and the OCC snubbed a request by Darryl Issa and Elijah Cummings to review the foreclosure fraud settlement before it was finalized early last week. What had leaked out while the Potemkin borrower reviews were underway showed them to be a sham, as we detailed at length in an earlier post. But even so, what actually took place was even worse than hardened cynics had imagined.
We are going to be reporting on this story in detail, since we are conducting an in-depth investigation. But this initial report by Huffington Post gives a window on a good deal of the dubious practices that took place during the foreclosure reviews. I strongly suggest you read the piece in full; there is a lot of nasty stuff on view.
There are some issues that are highlighted in the piece, others that are implication that get somewhat lost in the considerable detail. The first, as stressed by Sheila Bair and other observers, is that the reviews were never designed to succeed. This is something we and others pointed out; this was all an exercise in show. The OCC had entered into these consent orders in the first place with the aim of derailing the 50 state attorney general settlement negotiations. This was all intended to be diversionary, but to make it look like it had some teeth, borrowers who were foreclosed on in 2009 and 2010 who thought they were harmed were allowed to request a review. If harm was found, they could get as much as $15,000 plus their home back if they had suffered a wrongful foreclosure, or if they home had already been sold, $125,000 plus any equity in the home. Needless to say, the forms were written at the second grade college level, making them hard to answer. A whistleblower for Wells Fargo reported that of 10,000 letters, harm was found in none because the responses were interpreted in such a way as to deny harm (for instance, if the borrower did not provide dates of certain incidents, those details were omitted from the assessment).
But the results were even worse than that, hard as it is to believe. For instance, even though the OCC stipulated that the banks hire supposedly independent reviewers, they were firmly in control of the process. From the article, describing the process at Bank of America, where a regulatory advisory firm Promontory was supposed to be in charge: