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Robosigning 2.0: Coming to a Foreclosure Review Near You

posted by Adam Levitin

Last October, I wrote a post entitled "Robosigning 2.0" that discussed some job ads for outsourced OCC foreclosure reviews. I predicted based on the job ad qualifications that the foreclosure reviews would be nothing other than a whitewash. The OCC doesn't want anyone digging too deeply into the solvency of the major banks or into the mess they've made of the mortgage paperwork system. Well, now there's evidence that this is exactly what's going on. The interview with this whistleblower is well worth reading. Put this one in the suspension of belief category:

Supervisors told his entire group that “Wells Fargo had submitted over 10,000 files to Promentory. Only 4 were found to be in question, and upon final review by Wells, no harm was found.” So, 10,000 homeowners submitted their complaints and all 10,000 were deemed to be models of perfection. 

It will be interesting to see the final figures on the reviews...if the OCC releases them. (Maybe I should brush up on my FOIA skills....) I really hope that mainstream news organizations pick up on this the way 60 Minutes did on DocX. I would say something about how we should be calling for the Comptroller's resignation, but who am I kidding. The story in consumer finance politics is that when it is banks vs. debtors, the debtors lose. That was the outcome in 2005. That was the outcome with cramdown. And that's the outcome with robosigning. There's no Association of American Debtors working the Hill. Consumers only win when the issue affects the middle class, not those falling out of it. Witness the CARD Act and the CFPB. And even those took a financial crisis of epic proportions. I worry where we'll be in five years once the memory of the crisis has faded and "it was overregulation's fault" revisionism has become respectible coventional wisdom for half of the polity. Sigh.  


Check out my take, which is up on Naked Capitalism now: http://www.nakedcapitalism.com/2012/02/abigail-field.html

As it pertains to "whitewashes" when it comes to protecting the "GSE Business Model" it goes back a long way.

The Warren Rudman report on FNMA costing $78 million plus was a sham. The sum and substance of the report, like they used to say in Mississippi "the black guy did it" and now that he's gone the good guys are in charge, lets get back to business.

Such a refrain did not work then and will not work now.

Remedy............tar and feathers for all involved. Then send them to prison.

IANAL, but...
On the one hand, there is a vast public record suggesting criminal behavior by TBTF banks and their affiliates; Call them the Mortgage Security Cartel.
On the other hand, there are a slew of regulators (particularly, but not exclusively, the Office of the Corrupt Comptroller) and law-enforcement agencies (up to and including the U.S. DOJ) that seem to be willfully blind, deaf, and dumb when it comes to any suggestion of criminal behavior by this Cartel. Though the DOJ seems to momentarily wake itself from its stupor when any Cartel members are themselves victims of lesser scams.

The former are essentially untouchable unless/until the later is taken care of. How can we remove our Corrupt, Conflicted, and Derelict (supposed-to-be) public servants?

What evidence would be needed? What evidence could be gathered via FOIA that would seem innocuous enough that it would be released without too much delay, but damning when presented as a whole ?

The link to evidence isn't working and I can't seem to find the page to which you are referring...?

There's no Association of American Debtors working the Hill, but there is the National Association of Consumer Bankruptcy Attorneys (of which I am one) and we just finished with our Spring Capitol Hill initiative. Make sure NACBA is on your distribution list.

I suspect that part of the explanation for regulator/law enforcement inaction over the mortgage scandal is that civilian government has been (willfully) hollowed out by years of personnel neglect. To do the kind of examination necessary to drive big cases forward, the federal law enforcement apparatus would need to assign hundreds of investigators/lawyers. These people just don't exist in the federal work force the way they once did. Those that remain work on terrorism and drug trafficking crimes.

Mike - What about the investigators/lawyers being added by the state AG's. I hope to eventually see some TBTF bank executives doing perp walks.

I am seeing first hand the workings of the criminal empire called WELLS FARGO and also filed many complaints with the OCC.Wells Fargo is so brazen in there fraud that it is almost comical if it werent to depressing and sad to see how out there it all is.Fraud in all aspects of my loan clear as day[and I have solid proof]and heavy criminal fraud including escrow officers,brokers,you name it they were,and are all in there.From the office of the prez to the doc service companies,crazy ish,blows my mind.Looking forward to my day in court[maybe]have the goods but god only knows the depth of the deception.

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