Saturday, December 03, 2011

Massachusetts Sues 5 Major Banks Over Foreclosure Practices





Citing extensive abuses of troubled borrowers across Massachusetts, the state’s attorney general sued the nation’s five largest mortgage lenders on Thursday, seeking relief for consumers hurt by what she called unfair and deceptive business practices.
In addition to creating a new and significant legal headache for the banks named in the suit — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC Mortgage — the Massachusetts action diminishes the likelihood of a comprehensive settlement between the banks and federal and state officials to resolve foreclosure improprieties...
The attorney general, Martha Coakley, and her investigators contend that the banks improperly foreclosed on troubled borrowers by relying on fraudulent legal documentation or by failing to modify loans for homeowners after promising to do so. The suit also contends that the banks’ use of MERS “corrupted” the state’s public land recording system by not registering legal transfers properly.
“There is no question that the deceptive and unlawful conduct by Wall Street and the large banks played a central role in this crisis through predatory lending and securitization of those loans,” Ms. Coakley said at a news conference announcing the lawsuit. “The banks may think they are too big to fail or too big to care about the impact of their actions, but we believe they are not too big to have to obey the law.”

Ms. Coakley has been among the most aggressive state regulators in her pursuit of financial institutions involved in the credit crisis. In addition to her inquiry into foreclosure improprieties in Massachusetts, she has also conducted far-reaching investigations into predatory lending and securitization abuses.
Since 2009, Ms. Coakley has extracted more than $600 million in restitution and penalties from lawsuits against mortgage originators like Option One and Fremont Investment and Loan and Wall Street firms like Goldman Sachs and Morgan Stanley, which bundled loans into mortgage securities.
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This is a good start.  the next step is to prosecute the CEO's of the major banks.  Only 2 have been prosecuted for the fraud of  $14 Trillion.  Based upon the Savings and Loan fraud of the 1980's, at least 1,000 should be going to jail.  Ask your Congressperson why no one is going to jail.
Robert Scheer. You can arrest an idea.

"For a confirmation of that point, I also intended to present the mayor with the transcript of U.S. District Judge Jed S. Rakoff’s ruling this week rejecting the sweetheart deal between the SEC and Citigroup. The settlement, one of dozens like it offered to the banks, would have let Citigroup off the hook for a pittance in fines in return for closing cases involving immense corruption on the part of the bankers, who would not have to admit guilt for their crimes.

And crimes they clearly are, far beyond the scope of pitching a tent in a public park. As Judge Rakoff stated, the Securities and Exchange Commission has charged Citigroup with “a substantial securities fraud” in the sale of a billion dollars’ worth of toxic securities that were designed to fail and which the bank had bet against. Rakoff, who has handled a number of these cases, complained that Citigroup, like the other major banks, is a recidivist. Citigroup had already paid fines for four similar scams. The judge observed that “although this would appear tantamount to an allegation of knowing and fraudulent intent, the SEC, for reasons of its own, chose to charge Citigroup only with negligence” despite the far more serious charges called for in securities law.

The failure of the SEC or any other government agency to hold the banks accountable provides the essential justification for citizen action of the sort the Occupy movement has offered. In his concluding summary, Rakoff stated: “Finally, in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth. In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found.”

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