foreclosure fraud

Wednesday is the day that JPMorgan Chase CEO Jamie Dimon testifies before the Senate Banking Committee. He was called before the Committee (I believe the term is "invited") after it was disclosed that his bank lost billions of dollars in reckless and unregulated trades - trades which, as Dimon himself acknowledged, may have included criminal activity. read more »

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The Federal government and the Attorneys General from 49 states have signed a deal with five major banks over charges of fraud, including reported acts of widespread perjury and forgery, in the so-called “robo-signing” scandal.

A few days ago we suggested that any deal be scored against five basic principles: openness, justice, restitution, deterrence, and reconciliation. It's clear that this deal falls short in every category. The best thing that can be said about it is that, thanks to a few tough holdouts led by New York AG Eric Schneiderman, it now allows additional civil and criminal investigations to proceed.

That's far from nothing, and it could be a big deal. But it will only be a big deal if the Administration stops coddling banks and devotes a lot more resources to helping homeowners and upholding justice.

Up to now, the fight has been to prevent the Administration from doing another cushy bank deal. Now that the door's been left open to further action, there's a new fight: to demand that they devote the Federal government's resources to investigating Wall Street crime.

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I hate to sound Pollyanna-ish, but sometimes the sunny point of view turns out to be right.

Yes, corporate money has hijacked democracy. And it's true that our two-party system often fails to offer real choices or reflect the will of the majority. Our corporate political system doesn't have a problem. It is the problem. read more »

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"Investigate the Banks!" Today a coalition of progressive groups handed in a petition with more than 360,000 signatures that demanded exactly that. It calls on the Obama administration to stop pushing a cushy fraud settlement for bankers, to pursue a fair deal for shafted homeowners, and to let criminal investigations against Wall Street crooks proceed. read more »

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The Obama White House continues to push for a settlement that would let bankers avoid being punished - or even investigated - for a wave of mortgage-related crimes that includes perjury, tax evasion, and several types of fraud.[1] read more »

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Congratulations, Mr. President. This week you followed your increasingly populist rhetoric with some decisive action on behalf of the middle class. read more »

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Lately we've been hearing some strong words from President Obama about Wall Street crime. But when the cameras and lights aren't around, his administration's been working feverishly to protect bankers from state law enforcement officials. read more »

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In a piece called "Wall Street: Not Guilty," financial columnist Roger Lowenstein attempts to defend Wall Street against allegations that it's a viper's nest of rampant criminality. His mischaracterization, mockery, and vague suggestions of McCarthyism are strident, flat, and fail to get the job done. But Lowenstein's piece is well worth reading, if only as a case study in the moral and cognitive blindness that's reached epidemic proportions in influential Washington and Wall Street circles.

Lowenstein shows us how people who are undoubtedly thoughtful and ethically-minded in their personal lives can lose their way when confronted with complex moral and legal issues, especially ones involving people they know personally. And his misdirection and vituperation suggests how unsettled they become when their worldview is challenged.

It's a shame. The analytical and moral flaws in Lowenstein's piece obscure some of the very sound points he makes about the wrongheadedness of our country's financial culture, a topic that deserves more thoughtful discussion. Without a clear rebuttal, this wrongheaded view is likely to become tomorrow's conventional wisdom.

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Some of the headlines about the conviction of hedge fund manager Raj Rajaratnam are misleading or just plain wrong. The Rajaratnam guilty verdict won't "change the way Wall Street does business" - not where it matters most. Too Big to Fail banks will continue to endanger the economy because they know they'll be rescued again. And they'll keep on breaking the law, knowing that even if they're caught they'll be protected from prosecution.

And yet, instead of being grateful, bankers like JPMorgan Chase CEO Jamie Dimon will continue to publicly sulk about their own perceived mistreatment. That can be annoying, since the U.S. taxpayer saved their corporations, their careers, and their wealth from the consequences of their own mismanagement.

But in the end all this public posturing is just a form of territorial primate display, like mandrills showing their brightly-colored posteriors to zoo visitors. These bankers are reminding us that this country's economy and government are their territory and we're just trespassing on their mating grounds. To paraphrase an old Sam and Dave song, "It's their world, we're just living in it."

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If you're a banker who bought your estate with the millions you made from mortgage fraud, relax.  The Justice Department isn't looking for you.  But if you're an illegal immigrant who's working on that banker's estate, look out.  The Department of Justice is ignoring your boss and devoting most of its resources to catching you.

And the Justice Department's "mortgage fraud" unit doesn't prosecute bankers.  It protects them.

Joe Nocera of the New York Times  contrasts the legal treatment that was given to one high-flying borrower with that received by Angelo Mozilo, CEO of the fraudulent lender Countrywide.  But if stories like this one are bad, the numbers are even worse.  

If you also take a qualitative look at some of the Federal government's other well-publicized mortgage fraud efforts, like its "Stop Fraud" website, the picture becomes pretty stunning - if not downright infuriating..

Justice by the Numbers

The TRAC group [1] at Syracuse University gets information from the Justice Department under the Freedom of Information Act, then analyzes it and makes it available online as an interactive database.  Here are some interesting findings:

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