Thursday, February 16, 2012

Holder & Donovan Open Comedy Act in Vegas

The editorial in yesterday's Las Vegas Sun might have been titled "Moving Forward, Stabbing You in the Backward". Allegedly co-written by Attorney General Eric Holder and HUD Secretary Shaun Donovan, it's a cringe-worthy, craven apologia shamelessly directed at residents of one of the states hardest hit by the foreclosure crisis.

You have to read it to believe it.  I'm posting a somewhat condensed version, with translation (you can peruse the whole slimy thing here. And the daffy duo also crossposted their self-parody at the Obama-friendly Daily Kos for the even greater convenience of the koolaid-bloated masses) --

Too often, real progress in Washington can be stymied by bureaucratic red tape, turf fights, or conflicts between federal and state authorities. Unfortunately, it has become a place where partisan deadlock and political games can threaten to crowd out substantive debate.
In times of crisis – when people’s livelihoods are in jeopardy and families are losing their homes to foreclosure – they deserve better than intransigent bureaucracy. They need and deserve a government that actually solves problems.
This past week, the Obama Administration and a bipartisan coalition of 49 state attorneys general demonstrated what can be accomplished when people put aside turf wars and focus on what they can do to make things better. By working closely with one another across federal agencies, state boundaries, and party lines, we reached a historic mortgage servicing settlement on behalf of American homeowners.

(Translation: We have been putting pressure on a few recalcitrant Attorneys General for well over a year now, trying to get them to cave to a sweetheart deal letting the banksters off the hook. We are absolutely blaming the AGs for their altruistic foolishness -- and we are also accusing them of allowing even more homeowners to be foreclosed on while they diddled about trying to do the right thing instead of the expedient thing. We finally co-opted them through our sheer brute force. We worked closely with them by getting right in their faces. We are disdainfully reducing their bravery in the face of an overreaching federal government to a political "turf war.")

The need for a settlement on this scale has long been clear. Some five years after the housing bubble burst, America continues to pay a steep price. Lenders sold loans to people who couldn’t afford them and packaged mortgages to make profits that turned out to be nothing more than a mirage. Their actions hurt millions of families who did the right thing, but still lost their houses or saw their home prices drop. And, unfortunately, as our extensive investigations found, abuses continued long after consumers bought their homes.

(Translation: we were well aware this whole time of massive fraud and conspiracy. Even though our "extensive investigations" uncovered abuses, we did nothing. How unfortunate. We are not mentioning in this editorial that the crimes continue to this very day. Because we are corrupt, do-nothing political hacks. We are also throwing minorities under the bus by putting equal blame on some of the victims who were snookered into signing fraudulent documents. They rose above their station by buying into our American Dream malarkey. Even though many are uneducated and barely literate, we brazenly claim that they knowingly bit off more than they could chew. We continue to insinuate that poor black and brown people hurt the "responsible" homeowners just as much as the mega-banks did.)
In response to thousands of mortgage servicing complaints fielded by the U.S. Department of Housing and Urban Development (HUD), state attorneys general, and banking regulators across the country, HUD initiated a large-scale review of the Federal Housing Administration’s (FHA) 10 largest servicers in the summer of 2010. Devoting some 6,000 hours to reviewing servicing files for thousands of FHA-insured loans, the scope of this review soon broadened to encompass a long list of mortgage servicing issues, including lost paperwork, long delays, and missed deadlines for loan modifications. The Justice Department’s U.S. Trustees Program reviewed more than 37,000 bankruptcy claims and motions filed by the top five servicers. And HUD’s Office of the Inspector General, the Justice Department, and state authorities discovered that the country’s five largest loan servicers routinely signed foreclosure-related documents without knowing whether the facts they contained were correct.
Some have asked why we don’t address these actions by taking the banks to court. But rather than pursuing hundreds of lawsuits with varying degrees of success, the goal of this settlement has been to benefit struggling homeowners and to do so now – not sometime in the future, when it may be too late to help many families. 

(Translation: our chutzpah knows no bounds. We started this huge investigation a year and a half ago, spent 6000 hours reviewing files, looked at 37,000 pieces of paper filed by mortgage servicers and banks. We chose not to prosecute, because the success would only have been "varied". So we decided to give up while we were ahead, sweep the whole thing under the rug, and throw a few pennies at the victims before they die and it's too late.  Why we are not being investigated ourselves for legal malpractice and dereliction of duty is beyond the scope of this editorial and may be chalked up to our unbridled arrogance.) 
This settlement also forces banks to clean up their acts – and to fix the problems covered during our investigations – by committing them to major reforms in terms of how they service mortgage loans. This is significant, given that these banks service nearly 2 out of every 3 mortgages. And these new customer service standards are in keeping with the Homeowners Bill of Rights recently announced by President Obama – a single, straightforward set of commonsense rules that families can count on, requiring lenders and servicers to honor a long list of rights for those facing foreclosure.
 (Translation: We choose to call the crimes of the banksters "problems" in order to further absolve them and us, their willing and able co-conspirators and accessories during and after the fact. Slapping them on the wrist will scare the bejesus out of them and make them honest. They need a dose of common sense, not a jail term.)
 While this historic settlement isn’t designed to address all the issues of the housing crisis, it will offer significant help to those who suffered the most harm. Alongside the broad-based refinancing plan President Obama announced to help homeowners, it provides a path toward stability for our housing market and our broader economy. And, by ensuring that banks and mortgage servicers fulfill their essential obligations – and taking major steps to hold these institutions accountable – it proves that we can make real progress, and achieve extraordinary results, when we work together.

(Translation: A path toward stability for our housing market and our broader economy is simply doublespeak for more profits for the banks and a surge in their stock prices. This travesty proves that not only can they get away with murder, they can always count on us, their 'umble servants, to help them and cover up for them as they continue their stranglehold on the entire planet. They own us lock, stock and barrel; they pay us and keep us exactly where they can see us.)
In a related development sure to be swept under the rug as soon as the Obama Administration can make them an offer they can't refuse, San Francisco officials discovered that of the 400 foreclosures they audited recently, nearly all of them were fraudulent at worst, suspicious at best. The intrepid Gretchen Morgenson broke the story in today's New York Times. You can read it here
Donovan & Holder Share a Conspiratorial Chuckle At Our Expense


Denis Neville said...

Comedy Act? More like “Swiss cheese - plenty of wholes and smells ever worse with time”

Adam Levitin @ Creditslips:

“The San Francisco City Assessor's audit also serves as a benchmark for evaluating the Federal-State servicing settlement. The San Francisco City Assessor managed to accomplish in a few months what the Federal government and state Attorneys General weren't able to do in nearly a year and a half with far greater resources at their disposal: perform a credible investigation of foreclosure documentation with serious implications about the securitization process in general. That's a lot of egg on the face of Shaun Donovan, Eric Holder, Tom Miller, et al. The SF City Assessor report shows that it really wasn't so hard for a motivated party to undertake a serious investigation. And that raises the question of why the largest consumer fraud settlement in history proceeded with virtually no investigation.”

“The administration has had three chances to deal with too-big-to-fail: the bailouts, Dodd-Frank, and now the mortgage crisis, and it has shied away every time. It's hard to think of a greater failing of this Administration…Today TBTF [Too Big To Fail] is a get-out-of-jail free card. But I want to emphasize that TBTF isn't the only thing going on here. Part of the problem, I think is a social one, as our political leadership is part of the same social milieu as our financial leadership and unwilling to call out criminal acts by their peers.”

“The settlement seems an awful lot like Swiss cheese--it's got plenty of wholes and smells ever worse with time.”

The real joke is that Holder and Donovan are touting a settlement that does not yet exist.

Per the American Banker’s Jeff Horowitz and Kate Davidson, “the actual terms of the deal still aren’t public….That’s because a fully authorized, legally binding deal has not been inked yet…The implication of this is hard to say…”

“Spokespersons for both the Iowa attorney general’s office and the Department of Justice both told American Banker that the actual settlement will not be made public until it is submitted to a court. A representative for the North Carolina attorney general downplayed the significance of the document’s non-final status, saying that the terms were already fixed… Other sources who spoke with American Banker raised doubts that everything is yet in place. A person familiar with the mortgage servicing pact says that a settlement term sheet does not yet exist. Instead, there are a series of nearly-complete documents that will be attached to a consent judgment eventually filed with the court… Some who talked to American Banker said that the political pressure to announce the settlement drove the timing, in effect putting the press release cart in front of the settlement horse.”

So, no settlement yet, just promises from our trustworthy banksters and the Washington minions who cater to them.

Valerie said...

It is just one betrayal after another - even in an election year. Amazing to me that there is anyone out there with half a brain who is still voting for Obama. The Lesser of Two Evils thing and fear of an even worse Supreme Court can only carry them so far.

James F Traynor said...

This is really driving me nuts. I can't stand Obama, but the idea of Romney or, good God, Santorum? Should either one of these clowns, get into office it would be a disaster. Violence would be inevitable, civil unrest, maybe even incipient revolution.We live in Florida, a pivotable state in the upcoming election. What to do?

Suzan said...

I keep wondering if this charade would continue so blissfully if they all knew their home addresses were published in a concerned citizen's guide.

But that'll never happen in a country with such fluid Bill of Rights protections, free speech and association, will it?

Karen Garcia said...

I have a couple of comments in today's NYT. First, responding to Krugman on "Moochers on Welfare"--

Denial of reality is contagious. One reason why so many people depending on the safety net rail against government aid is that admitting helplessness is just too painful. Politicians mouth concern about the middle class this, and the middle class that. Since they are loath to utter the dreaded "P" word and address poor people honestly and directly, is it any wonder that Americans adamantly refuse to define themselves as poor?

It's hard for people falling into poverty for the first time to face the truth that the American Dream is a lie, and that hard work doesn't translate into wealth. They're middle class all the way, even if they're down to their last dollar.

Poverty is demonized everywhere. The billionaire mayor of New York makes food stamp applicants get fingerprinted. Republicans want drug testing to be a requirement for unemployment benefits, even though substance abuse is rare among applicants. Pundits like David Brooks keep harping on the myth that poor people are uneducated and lack moral values.

Oftentimes, the last thing people are willing to relinquish when hard times come calling is their own self-esteem. So when the oligarchs and their political puppets do the dog whistle routine and blame the victims that they themselves created through their orgies of deregulation, tax evasion and destruction of jobs via globalization, they're cynically banking on a good number of them to succumb to the tactic of Divide and Conquer. Hate and fear are powerful weapons.

Next, in response Timothy Egan on "The Electoral Wasteland" of GOP presidential politics --

Look who is funding the candidates: fabulously wealthy white guys with arcane agendas. With Mitt, it's the Wall Street vulture capitalist crowd of which he is an integral part. With Rick, it's one lone billionaire who can get away with going on cable TV talk shows and joking how women should practice birth control by holding an aspirin between their knees. Newt Gingrich has been bankrolled by a gambling mogul who is quite upfront about his own one-track, pro-Israel agenda.

The only people voting Republican will be rich white guys, and poor white guys who happen also to be misogynists and racists, and the deluded souls out there in Fox News Land who remain convinced that prosperity is just around the corner if you only work hard enough and keep the trickle-down faith. And there are a fair amount of voters who will pull the Republican lever simply because they hate everything the Democrats stand for. Actually, they hate an incumbent who simply does not exist in the real world: a Kenyan Marxist anti-colonialist running wild and forcing everyone to sign up for food stamps.

Traditional conservatives, who in saner times voted Republican, are staying home out of pure disgust with the choices the oligarchy has pre-approved for their voting pleasure. Citizens United is succeeding beyond everyone's wildest dreams. It has turned the electoral process into a three ring circus -- entirely befitting a country which has devolved into a banana republic.

Denis Neville said...

An Obama sellout is a sellout that never stops giving.

“Quelle Surprise! Taxpayers Will Be Paying for Part of Mortgage Settlement,” Yves Smith.

“The whole purpose of a settlement is that a party pays damages to rid themselves of liability, and the amount they pay (and “pay” can include the cost of reforming their conduct) is less than what they expect to suffer if they were sued and lost the case (otherwise, it would make more sense for them to fight).

“But in the topsy-turvy world of cream for the banks, crumbs for the rest of us, we have, in the words of Scott Simon, head of the mortgage business at bond fund manager Pimco, in an interview with MoneyNews, lots of victims paying for banks’ misdeeds: “A lot of the principal reductions would have happened on their loans anyway, and they’re using other people’s money to pay for a ton of this. Pension funds, 401(k)s and mutual funds are going to pick up a lot of the load…Think about this, you tell your kid, ‘You did something bad, I’m going to fine you $10, but if you can steal $22 from your mom, you can pay me with that.’”

“So not only is the settlement designed to shift the costs of the banks’ misdeeds onto already victimized investors, but taxpayers will also be picking up some of the widely touted $25 billion tab. Shahien Nasiripour tells us in the Financial Times that banks will be able to count future mods made under HAMP towards the total: …people familiar with the matter told the FT that state officials involved in the talks had had misgivings about allowing the banks to use taxpayer-financed loan restructurings as part of the settlement. State negotiators wanted the banks to modify mortgages using Hamp standards, which are seen as borrower-friendly, but did not want the banks to receive settlement credit when modifying Hamp loans. Federal officials pushed for it anyway, these people said.”

Smith concludes, “This episode also illustrates the danger of agreeing to a deal where the terms were not final. We and AGs still don’t know where the settlement will shake out. Any negotiator or attorney will tell you there is a world of difference between an agreement in principle and a definitive agreement. Rest assured will find more instances of the AGs being baited and switched before this pact is inked.”

An Obama sellout is a sellout that never stops giving.

Denis Neville said...

Karen, in her Timothy Egan comment, said, “Look who is funding the candidates: fabulously wealthy white guys with arcane agendas.”

Glenn Greenwald looks at one,an Idaho billionaire named Frank VanderSloot, “Billionaire Romney donor uses threats to silence critics.”

Vandersloot is the national finance co-chair of the Mitt Romney presidential campaign, and his company has become one of the largest donors to the Romney SuperPAC, Restore Our Future.

“But it is VanderSloot’s chronic bullying threats to bring patently frivolous lawsuits against his political critics — magazines, journalists, and bloggers — that makes him particularly pernicious and worthy of more attention.”

“Numerous journalists and bloggers in Idaho — who want to write critically about VanderSloot’s vast funding of right-wing political causes — are petrified even to mention his name for fear of these threats. As his work on the Romney campaign brings him national notoriety, he is now aiming these tactics beyond Idaho. To allow this scheme to continue — whereby billionaires can use their bottomless wealth to intimidate ordinary citizens and media outlets out of writing about them — is to permit the wealthiest in America to thuggishly shield themselves from legitimate criticism and scrutiny.”

Denis Neville said...

Stuart Zechman’s questions:

“Isn't immunity for banks that have stolen people's homes and wrecked the economy a small price to pay to make sure that Obama gets elected to a second term in office?”

“Which is more important to you: a working system of elite accountability in America, or Obama's reelection?”

“Don't you want Obama to do whatever he has to in order to get reelected...whatever it takes?”

“Or --and here's the final question-- are there some things that are more important than the reelection of a Democratic president, some things without which our country can't be successful, and our people can't have the nation that we deserve after these long years of failure and stupidity and avarice and corruption on the part of our government, banks, giant industries, institutions...our elites?”

“Are there some things that simply can't be sacrificed on the altar of Barack Obama's reelection campaign?”

“If things keep going the way they're going, we're going to have to choose one way or the other. Movement liberals are either going to be a movement primarily about accountability for everyone in America, or we're going to remain pawns on an 11-dimensional chess board for the foreseeable future.”

“If you find that there's not much to love about robo-settlement, then ask yourself 1) what does it say about what's wrong with our country at this moment in our history, 2) what won't you tolerate to see Obama in the White House for another four years, and 3) isn't long-overdue accountability what America needs most right now to put us on the path to a just and sustainable future? Or just ask yourself one thing: What are you willing to win?”

“I'm Stuart Zechman, and this has been...the Z-Files.”

Anne Lavoie said...

@James Traynor

Nothing personal, but I see it differently.

Who do you see as being the ones causing 'violence, civil unrest, maybe even incipient revolution' if Romney or Santorum were elected? The Democrats??? Those who are now sitting on their hands with their mouths clamped shut while Obama caters to Wall Street, demolishes the Constitution, and conducts stealth wars all over the globe? I can only wish!!! Why bother? We will hardly notice any difference in policy. If anything, I think if a Republican wins, things will go on as usual. The only difference right now is in rhetoric, not in action. The politicians are merely puppets serving Wall Street.

The big difference I see is in the attitude of the people. The Republicans have deliberately been worked into a frenzy with hatred for Obama, and by extension, with hatred for all Democrats. I do see the potential for violence, but not if Santorum or Romney win. I see violence coming if Obama wins.

Obama's protective ego makes him averse to personal confrontation, so he has let lie after lie go unchallenged, and that has allowed himself and the entire Democratic Party to be demonized and loathed. If Obama is re-elected, and especially if Obamacare is ruled Constitutional, I can envision civil unrest and possibly violent uprising occurring which could make all Democrats the target. Keep in mind that the hate pump has been primed for over 3 years without any effort by Obama to counter the lies.

Obama's continued silence over these years is similar to any of us standing around listening to the N word about Blacks year after year without speaking up. Unhindered, it becomes normal and acceptable and is allowed and encouraged to grow, and the entire target group ends up suffering, even if we ourselves are not personally affected.

I guess that's just one of the many principled, sanctimonious purist things that Obama threw under the bus in order to serve his corporate masters.

James F Traynor said...

I think there will be serious trouble either way if things don't substantially change in this country, but I think the descent to violence will be faster under a Republican White House and Congress. it will set a national tone, particularly with law enforcement and the military: Okay boys, the gloves're off, go get 'em! And, believe me, they will.