Clawback!

and the guests coming on after the set up piece with video of Rep. Debbie Wasserman Schultz, D-Fla, House Minority Whip Eric Cantor, and David Axelrod, senior White House adviser , were fairly careful to not indicate they thought that the actions of the banks and loan servicing companies did anything which would or could result in criminal indictments, although they did say the actions were illegal at least once....

Oh? They did agree it was illegal to lie to the court, but, hey, surely this can be worked out and we'll all just get along.

And, of course, what's done is done, so let's let sleeping dogs lie. In illegally foreclosed homes.... Clawbacks would be bad form, it seems. And it's taking a private lawyer to bring it to an actionable level, at least thus far.

Even the Dem AG from Ohio, Richard Cordray, currently running for reelection, who is one of the 40 states' AG's who have asked for an investigation into the Robo Signing and other illegal actions, said houses which have already been foreclosed should not be readjudicated. Cordray appeared with Shari Olefson, real estate attorney representing banks.

RICHARD CORDRAY, Ohio attorney general: It's a serious problem. And it needs to be taken seriously by the financial industry. You cannot have people's private property rights being taken in the courts of this country based on case after case in which fraudulent evidence is being presented to the court.

I mean, nobody can defend that. That's not an appropriate practice. And we want to see that that is cleaned up. And we don't want to see foreclosures where it's based on phony evidence that can't stand up to court scrutiny.

It's a "serious problem," "you cannot have people's private property rights being taken in the courts....based on case after case...fraudulent evidence...presented to the court." Very serious; almost sounds illegal.

RICHARD CORDRAY: We don't know at this point [how many affected]. I am not asking to reopen transactions that have already occurred.

If people have already left those homes, and the property may have been sold to innocent third parties, I don't know that it's appropriate to unwind transactions. We want to be measured in our approach.

And I also do not necessarily favor a blanket moratorium on foreclosures. What we do think is, if foreclosures are going forward based on fraudulent evidence, those shouldn't go forward. There should be a pause, and there should be a cleaning up of that process. But foreclosures that are proper can go forward and should go forward.

So, let's leave it up to the nice people at the banks? The loan servicers?

RICHARD CORDRAY: Actually, I very much agree with what Shari [real estate attorney representing banks] just said.

I think, if foreclosures are based on proper evidence, then they should go forward. But if foreclosures are based on fraudulent affidavits [unless, as he noted above, it's already a done deal with those fraudulent affidavits. Oh, my! Feeling protected, Ohioans?], nobody can defend that [unless, as noted, it's a done deal]. If that were done in any other kind of case, both the party and the attorney would expect severe sanctions. [But not in cases such as these where it's a done deal??]

I think the courts are going to have to sort this out here. We're at the beginning of our inquiry, not at the middle or the end. And we're going to have to see where the evidence leads us.

If this is a widespread practice, those foreclosures need to be paused and cleaned up before anything can go forward. You cannot have court judgments being given on fraudulent evidence. I think everybody can agree on that.

JEFFREY BROWN: But, in the meantime, how do we proceed right now with foreclosures that are sitting there to go forward or not to go forward?

RICHARD CORDRAY: I would say two things.

First of all, the more immediate cooperation and back-and-forth sharing of information we get from the lenders and mortgage servicers, the quicker we will be able to get to the bottom of this and get it sorted out.

The other thing I would say is, if financial institutions know that they have filed foreclosure actions and they have submitted fraudulent evidence in those cases, it would be well worth their while to sit down and think about how they can work those cases out, reach a resolution, maybe a loan mitigation to keep people in their homes, rather than going forward and seeking a court order, where the court may well have to sanction them and they may be facing severe exposure. [Uh, why they being sanctioned/ Faceing severe exposure?]

So, I think that it's up to the lending institutions, as Bank of America has done, to recognize they have issues in their process, to sit down, work with the law enforcement agencies across this country, and see if we can get this sorted out quickly, so that the courts can move forward.

Isn't that considerate of the OH Atty Gen'l? He's really magnanimous towards the businesses, isn't he?

How many little people will be given the opportunity to make their illegal actions "right" and thus avoid criminal charges? In any situation?

And what about people screwed out of their homes?

It does seem that banksters and their subcontractors do not do perp walks.

It seems to me that some enterprising young radical should set up a website which lists all of the contested foreclosures and forced evictions for the purpose of organizing grassroots resistance.

I know that if I knew about someone being evicted in my area, I'd be glad to show up to lend a hand in doing what needs to be done. I'm sure others would as well.

From the transcript on PBS: (JB is the interviewer)

"JEFFREY BROWN: Talk of a nationwide moratorium on selling foreclosed homes ran into new opposition today, as the securities industry warned against serious damage to the housing market.

The warning came from the Securities Industry and Financial Markets Association. It said imposing a moratorium would be -- quote -- "catastrophic.""

Too big to fail? Too big for oversight?

The banks and loan service companies are only stopping (pausing) now because THEY GOT CAUGHT!

How can you say that if the crime has already been committed, we cannot go back? Shouldn't people stay in their homes until it is determined?

Local officials could be the banksters last mile problem.

As local law enforcement faces budget cuts across America, I wonder how many of the deputies doing the evictions are also looking at a foreclosure in their own future...

who weren't part of the whole bankster fraud. That would be an unholy mess. But in those cases, the normal course for political and prosecutorial officals is start talking restitution and other perfectly usual legal remedies As opposed to the big shrug and an "oh noes, what can we possibly dooooooooo?" dance.

cards available. Lots of detailed info about how foreclosure are supposed to work, all predicated on lenders following, like, the law.

He opens with this:

Foreclosuregate is rapidly spiraling out of control, and is going to get worse.

As I have repeatedly said since 2007, this is not about bad paperwork. It is about fatally-defective securities sold to investors for half a decade and the fraud up and down the line that enabled those sales.

Denninger thinks this is the banks trying to take over this area of state law, making it their private playground. I wonder if the handy little notorization law, HR 3808, sponsored by two Dems and two Repubs, with one Repub taking the lead, was actually part of the coverup. Or part of the takeover.

He also points out there were similar problems in the 1920's from the Florida swamp sales scandals. The state developed a way to unwind things which could be adapted today.

The lack of a valid claimant under state law does not extinguish the debt - only the security instrument. Those who think they're going to get a "Free House" are likely to be sadly mistaken. The creditor still has a claim for the money owed (if he can prove it up in court) and can enforce it via lawsuit as with any other unsecured debt but he can't seize the property in a foreclosure action. As with any claim of a debt in a court, the creditor still has to prove standing - which means he needs to prove the obligation was taken by the borrower and he has acquired sole and lawful ownership of that obligation. Note that this is similar to the above process but not identical - in many states it is entirely possible to irrevocably sever a security interest on real property, but that does not extinguish the debt - only the lien on the title. (My emphasis)

Denninger is usually passionate, but his hair is on fire about this scandal. Lots of other good posts and some pretty hot catches about the unfolding story.

Citi conference call minutes.

Banks hired hair stylists and cleaners to process affidavits.

NEW YORK (AP) -- In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in "foreclosure expert" jobs with no formal training, a Florida lawyer says.

Eh, just click over to Market-Ticker and begin reading. If it weren't so serious, this would be funny.

Via Ian Welsh.

So the bottom line needs to be changed. What if every foreclosed home where the bank would not negotiate in good faith were stripped out? What if all the copper wire and plumbing pipe were to disappear? Have you seen what is going on with copper prices? Ditto with all the fixtures, sinks and anything else of modest value? The result would be a change in the bottom line for the bank who took possession, and after a while they might start to think that the residual value did not make foreclosure such a good idea. And finally, redoing such homes would put a lot of construction people to work on jobs that cannot be outsourced to China. Of course, I am not suggesting that anybody do anything illegal. That just wouldn't be right. I am just musing about what if stuff were to magically disappear.