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Cynthia McKinney was my candidate for a long time last Presidential election. She still is.
Have you realized yet that there might be another way to view what happened recently to the accused French rapist (and,no, I'm sure he's guilty of many crimes against innocent people, but we are supposed to be a different kind of country (law-driven), aren't we)? I know I was perplexed about how quickly he was handcuffed and perp-walked to Riker's Island on a black woman immigrant's testimony, especially in light of the Wall Street "rapists" (proven (over and over) rapists of the world) being given love taps and light fees. And if you really enjoyed the CIA's finding of "porn at the bin Laden house!" story . . . Mike Whitney points out the obvious (and, yes, he's taken to task substantially by his readers who want to see somebody pay for the World Bank and IMF's past transgressions):The U.S. used to be a wealthy country with much to give to the world, but now the country is being plundered and the economic policies now promote the oligarchization of our country.
The country is coming apart at the seams even as it terrorizes the world and applies the death penalty to whole countries. Dr. Martin Luther King, Jr. once said that we are a country of guided missiles and misguided men. Today, that is still true. Dr. Martin Luther King, Jr. also said that the U.S. was the greatest purveyor of violence on the planet and sadly, that is still true, too.
But, there is some good news, too. And that is, despite the tightly controlled U.S. media, despite the deceptive political structure that is not now--if it ever was--democratic, the core American people who are the true peace people, are beginning to see the truth. We cannot bring our country to peace and respect for human dignity without the solid foundation of the truth. Those in the service of hatred, war, Zionism are being seen for what they are.
So now, our challenge is what to do with this awakening. The answer, I believe, is whose revolution gets funded. I personally know the importance of this. During the Civil Rights Movement in the U.S., Black people were able to erase bad laws and write better ones. They didn't have a lot of money, but they had enough. And what they lacked in finance, they made up for in unity and strategy. Therefore, it is at this moment, when things appear so bleak that we must redouble our efforts and not give up. We must believe that we can remake the world in a more peaceful reality.
Finally, I am saddened as an American at what my country is doing to the world. I am saddened that our first African-American President presents a false perception of the Black political consensus in the U.S. when he participate in war crimes and global death and destruction.
These wars constitute a crime against humanity, crimes against the peace, and crimes against our planet. I believe the people are ready, but now we have to organize ourselves in Revolutionary Love, as Malcolm X said, "by any means necessary."
"American justice" is an oxymoron like "military intelligence" or "jumbo shrimp". The two words just don't fit together, in fact, they're polar opposites. The truth is, there is no expectation of justice in the United States today. Even the thought of it is laughable. Just look at the way the Dominique Strauss-Kahn matter has been handled. The former IMF chief "allegedly" tried to rape or force a maid at his fancy hotel to perform oral sex. As a result, he was arrested and thrown in jail. Fine. But in America "what a man is accused of" is not supposed to matter. He's still entitled to a fair trial. So, what are the chances that Strauss-Kahn will get a fair trial now that he's been blasted as a serial sex offender in about 3,000 articles and in all the televised news reports? Not very good, I'd say. Let me ask you: Why was DSK stripped of his suit and tie and paraded in handcuffs in front of the media after a sleepless night in the hoosegow? Were New York's finest trying to demonstrate their deep appreciation for the rule of law or did they think the overweight 62 year old was going to make a run-for-it? And why is the media so quick to judge the man? Do they know something we don't know? Is there some reason why they trust the claims of an unidentified maid who no one has even talked to over Strauss-Kahn, or are they just following orders from on-high? We all know that the media is an old hand at destroying people's lives and reputations. That's what they do and they're damn good at it. Have you talked to Bill Clinton recently? How about Scott Ritter, Michael Schiavo or Martha Stewart? The joke about the Bush administration was that, even though they were never tough on crime, at least they got Martha Stewart "off the streets". Pretty funny, eh? So, here's something to chew on: Anyone who thinks that the media is anything more than a stick that's used to beat political enemies is a fool. This whole incident has been set up to make Strauss-Kahn look like a perv before he even gets a chance to open his mouth. Which is why there's really is no expectation of justice. The whole thing is a farce. His goose is already cooked. But doesn't the hypocrisy bother you a bit? I mean, do you remember any Wall Street bankers being dragged off in handcuffs when they blew up the financial system and bilked people out of trillions of dollars? Do you remember Tony Hayward being thrown in jail when BP dumped millions of gallons of untreated crude into the Gulf of Mexico? Do you remember anyone in the Bush administration doing time for leading the country into a war that killed over 1 million Iraqi civilians and displaced 4 million more? The people who make the rules aren't bothered by fraud, rape, murder or any other crime. Hell no. It just doesn't matter to them because there are no consequences. They do what they want and let someone else worry about it. But that rule doesn't apply to Strauss-Kahn, which makes me think that he must have pissed off some very important people who decided he needed to be taught a lesson. That's it, isn't it? He stepped on the wrong people's toes. Now he's a dead duck. Here's a thought experiment: Let's say the shoe was on the other foot. Let's say that the head of the World Bank Robert Zoellick (who is an American citizen) was arrested in France on similar charges. Let's say he was kept up all night, plopped in a raincoat, then frog-marched in front of the media flanked by a small army of cops. What do you think Obama's reaction would be? Do you think he'd let anyone drag the US through the mud like that or do you think he'd grab the nearest phone and read Sarkozy the riot act? And how long do you think it would be before every newspaper and every pundit and every politician in America was demanding Zoellick's immediate release? I'll bet it would it take no more 24 hours before the F-16's were screeching over Paris pounding the Louvre and Notre Dame with laser-guided missiles and bunker busters sending terrified civilians scampering for cover. No one fu**s with the Godfather. No one. Not unless they want a whole lotta trouble. So, why hasn't Sarkozy called Obama? Does he like seeing France get kicked around in public? Is that it? Or was Sarkozy in on this little scam from the get-go, and now he's just thrilled-to-death that his biggest rival in the upcoming presidential race has been knocked out of the running? Funny how that works, isn't it? It almost seems like it was planned. In any event, Strauss-Kahn's career is over. My guess is that the reforms he planned to announce at the upcoming Bretton Woods conference would have cost some very wealthy people alot of money, and they didn't like that. So they had him removed. Comments: david hannaford: Two months ago, a George Soros -hosted meeting floated the idea of using IMF SDRs and a yuan-heavy basket of currencies instead of the US dollar as world trading and reserve currency. Such a move would result in the US notes now held worldwide rushing back into the US domestic economy, producing hyperinflation and a massive devaluation. Without commenting on DSK's personal morality or good judgement (pause and spit), I surmise that he represents one side of an interbankster struggle between those who want to conserve Rothschild power in a new order; and those who want to preserve the old. gepay: . . . how many people believe that Sarkozy would set in motion an incident like this (to eliminate his main rival in the upcoming elections) if he thought he could get away with it? If DSK were espousing direction for the IMF that went against what the 'powers that be' wanted the IMF to do (at this point I don't know what DSK wanted the IMF to do in the near future) it is easy for me to believe he would be thrown under the bus or worse. Alfred Herrhausen (30 January 1930 - 30 November 1989) was a German banker and Chairman of Deutsche Bank. Some months before his violent death, Herrhausen is reported to have advocated Third World debt cancellation and reorganisation of the world's financial system at the World Bank meeting in Washington, D.C. In his position as the chairman of one of the most powerful banks in the world, his insistence would have been influential. Herrhausen fell victim to a sophisticated roadside bomb shortly after leaving his home in Bad Homburg on 30 November 1989. He was being chauffeured to work in his armoured Mercedes-Benz, with bodyguards in both a lead vehicle and another following behind. The bomb had been hidden in a saddle bag on a bicycle next to the road that the assassins knew Herrhausen would be traveling in his three-car convoy. In the bag was a 20 kg bomb that was detonated when Herrhausen's car interrupted a beam of infrared light as it passed the bicycle. The bomb and its triggering mechanism were quite sophisticated. The bomb targeted the most vulnerable area of Herrhausen's car—the door where he was sitting—and required split-second timing to overcome the car's special armour plating. The bomb utilized a Misznay-Schardin mechanism. A copper plate, placed between the explosive and the target, was deformed and projected by the force of the explosion. It is unlikely that this improvised explosive device had the precise engineering required to form the liner into a more effective slug or "carrot" shape (like in a shaped charge or an EFP) but in any case, the detonation resulted in a mass of copper being projected toward the car at a speed of nearly two kilometers per second, effectively penetrating the armoured Mercedes. Herrhausen's legs were severed and he bled to death. If conspiracy theory is correct, then DSK has just been Spitzered, only his reputation being killed. The circumstantial facts of how the media has already convicted him, how the NYC police made him do the perp walk after being dragged off an airplane. How quickly Geithner has already weighed in saying that DSK must resign. All this is uncharacteristic of how important people who the 'PTB' like are usually treated when they commit a crime. Geithner himself cheated on his taxes and nothing happened - I know rape is a lot more serious. Either story is believable to me at this time. Powerful alpha male thinks he is above the law and rapes a maid. Powerful alpha male runs afoul of the NWO and his known imperfections are used to bring him down. PaoloCaru: Interesting that the US media is reporting that the maid is a staunch muslim and is wearing a hijab. I find it hard to believe that a maid of three years could be bought off to perform some very good acting of a distressed victim. But it could be possible. However the symbolism of a muslim woman assaulted by the jewish banker, is quite incendiary. I feel that this may be leading to something in light of the arab spring revolts and the nenewed pressure on Israel. Could (it be that) the US and Israel are provoking another Pearl Harbor, that they can react upon ?? Personally, I think the US and Israel are together in a desperate financial situation, which as in the Great Depression, war and a total world victory was the only solution. The USA feels they have the technology and military might to achieve this again, and before the US public start demanding deep cuts in the Pentagon budget . In a few years the USA will not be able to afford to take over the world. The US UK and Israel are seeking to provoke an all out war with the Middle East, to gain another 1967 victory on the now weakened Egypt, Lebanon, and Syria, and to specifically take out Iran before it gets nukes. I heard the Israel FM today, re-affirming that Iran is the real threat. DSK is proven sex maniac and was very capable of this spontaneous crime. It could be, however, that the cabal, his own tribe may have sacrificed him for greater purposes. Regardless, sometimes a CIGAR is just a CIGAR.Paul Craig Roberts has his own viewpoint (and he's very good these days):
You see? There's a very good reason why we should never stop watching what the media report (and trying to fathom "why?"). (And I don't mean Scary Sarah's latest hit job.) And on another foreign note (and I'm thrilled that anyone is even telling US about this!):Strauss-Kahn simply had to be eliminated.May 18, 2011 The International Monetary Fund’s director, Dominique Strauss-Kahn, was arrested last Sunday in New York City on the allegation of an immigrant hotel maid that he attempted to rape her in his hotel room. A New York judge has denied Strauss-Kahn bail on the grounds that he might flee to France.The Amerikan Police State Strides Forward
By Paul Craig Roberts
President Bill Clinton survived his sexual escapades, because he was a servant to the system, not a threat. But Strauss-Kahn, like former New York Governor Eliot Spitzer, was a threat to the system, and, like Eliot Spitzer, Strass-Kahn has been deleted from the power ranks.Strauss-Kahn was the first IMF director in my lifetime, if memory serves, who disavowed the traditional IMF policy of imposing on the poor and ordinary people the cost of bailing out Wall Street and the Western banks. Strauss-Kahn said that regulation had to be reimposed on the greed-driven, fraud-prone financial sector, which, unregulated, destroyed the lives of ordinary people. Strauss-Kahn listened to Nobel economist Joseph Stiglitz, one of a handful of economists who has a social conscience.Perhaps the most dangerous black mark in Strauss-Kahn’s book is that he was far ahead of America’s French puppet, President Sarkozy, in the upcoming French elections. Strauss-Kahn simply had to be eliminated.It is possible that Strauss-Kahn eliminated himself and saved Washington the trouble. However, as a well-travelled person who has often stayed in New York hotels and in hotels in cities around the world, I have never experienced a maid entering unannounced into my room, much less when I was in the shower.In the spun story, Strauss-Kahn is portrayed as so deprived of sex that he attempted to rape a hotel maid. Anyone who ever served on the staff of a powerful public figure knows that this is unlikely. On a senator’s staff on which I served, there were two aides whose job was to make certain that no woman, with the exception of his wife, was ever alone with the senator. This was done to protect the senator both from female power groupies, who lust after celebrities and powerful men, and from women sent by a rival on missions to compromise an opponent. A powerful man such as Strauss-Kahn would not have been starved for women, and as a multi-millionaire he could certainly afford to make his own discreet arrangements.As Henry Kissinger said, “power is the ultimate aphrodisiac.” In politics, sex is handed out as favors and payoffs, and it is used as a honey trap. Some Americans will remember that Senator Packwood’s long career (1969-1995) was destroyed by a female lobbyist, suspected, according to rumors, of sexual conquests of Senators, who charged that Packwood propositioned her in his office. Perhaps what inspired the charge was that Packwood was in the way of her employer’s legislative agenda.Even those who exercise care can be framed by allegations of an event to which there are no witnesses. On May 16 the British Daily Mail reported that prior to Strauss-Kahn’s fateful departure for New York, the French newspaper, Liberation, published comments he made while discussing his plans to challenge Sarkozy for the presidency of France. Strauss-Kahn said that as he was the clear favorite to beat Sarkozy, he would be subjected to a smear campaign by Sarkozy and his interior minister, Glaude Gueant. Strauss-Kahn predicted that a woman would be offered between 500,000 and 1,000,000 euros (more than $1,000,000) to make up a story that he raped her.The Daily Mail reports that Strauss-Kahn’s suspicions are supported by the fact that the first person to break the news of Strauss-Kahn’s arrest was an activist in Mr Sarkozy’s UMP party – who apparently knew about the scandal before it happened.Jonathan Pinet, a politics student, tweeted the news just before the New York Police Department made it public, although he said that he simply had a ‘friend’ working at the Sofitel where the attack was said to have happened.
The first person to re-tweet Mr Pinet was Arnaud Dassier, a spin doctor who had previously publicised details of multi-millionaire Strauss-Kahn’s luxurious lifestyle in a bid to dent his left wing credentials.
Strauss-Kahn could just as easily been set up by rivals inside the IMF, as well as by rivals within the French political establishment.
Michelle Sabban, a senior councillor for the greater Paris region and a Strauss-Kahn loyalist said: ‘I am convinced it is an international conspiracy.’
She added: ‘It's the IMF they wanted to decapitate, not so much the Socialist primary candidate.
‘It's not like him. Everyone knows that his weakness is seduction, women. That's how they got him.’
Even some of Strauss-Kahn’s rivals said they could not believe the news. ‘It is totally hallucinatory,’ said centrist Dominique Paille.
‘If it is true, this would be a historic moment, but in the negative sense, for French political life. I hope that everyone respects the presumption of innocence. I cannot manage to believe this affair.’
And Henri de Raincourt, minister for overseas co-operation in President Nicolas Sarkozy's government, added: ‘We cannot rule out the thought of a trap.’
Michelle Sabban is on to something when she says the IMF was the target. Strauss-Kahn is the first IMF director who is not lined up on the side of the rich against the poor. Strauss-Kahn’s suspicions were of Sarkozy, but Wall Street and the US government also had strong reasons to eliminate him. Wall Street is terrified by the prospect of regulation, and Washington was embarrassed by the recent IMF report that China’s economy would surpass the US economy within five years. An international conspiracy is not out of the question.Indeed, the plot is unfolding as a conspiracy. Authorities have produced a French woman who claims she was a near rape victim of Strauss-Kahn a decade ago. It would be interesting to know whether this allegation is the result of a threat or a bribe. As in the case of Julian Assange, there are now two women to accuse Strauss-Kahn. Once the prosecutors get the odds of two females against one male, they win in the media.It has not been revealed how the authorities knew Strauss-Kahn was on a flight to France. However, by arresting him aboard his scheduled flight just as it was to depart, the authorities created the image of a man fleeing from a crime.The way Amerikan justice (sic) works is that prosecutors in about 96 percent of the cases get a plea bargain. US prosecutors are permitted by judges and the public to pay for testimony against the defendant and to put sufficient pressure on innocent defendants to coerce them into making a guilty plea in exchange for lesser charges and a lighter sentence. Unless the hotel maid has a spell of bad conscience and admits she was paid to lie, or gets cold feet about perjuring herself, Strauss-Kahn is likely to find that Amerikan criminal justice (sic) is organized to produce conviction regardless of innocence or guilt.On May 16, the day following Strauss-Kahn’s arrest, the US Supreme Court threw its weight behind the Amerikan police state by destroying the remains of the Fourth Amendment with an 8-1 ruling that, the U.S. Constitution notwithstanding, Amerika’s police do not need warrants to invade homes and search persons.This ruling is more evidence that every American is regarded as a potential enemy of the state, not only by Airport Security but also by the high muckety-mucks in Washington. The conservatives’ “war on crime” has created a police state, and conservatives, who originally stood for limited government and civil liberty, are euphoric over the expanded and unaccountable powers that a conservative Supreme Court has handed to the police.On the same day the federal government reached the $14.3 trillion debt ceiling, which forced the Treasury to “borrow” money from federal employee pensions in order to continue funding Amerika’s illegal wars and crimes against humanity. The breached debt ceiling serves as an appropriate marker for a country that has squandered its constitutional heritage and has arrived at moral as well as fiscal bankruptcy.UPDATE -
In the several hours since I wrote this article, authorities have announced that Strauss-Kahn, who was refused bail on specious grounds, has been put on suicide watch. Why announce it unless it serves an agenda? From the beginning every statement and action of the authorities is designed to convey the impression of guilt. Is putting Strauss-Kahn on suicide watch a way to paint a picture of a person who can't face the public humiliation of his crime? Is it a way to use the humiliation of constant interruption to break down his character and resolve? Or might it be to plant the idea that should he expire in prison, suicide is the explanation?
And our biggest story? I'm running it at the bottom because you've already seen it, or never will.State Department Investigating Legality of Erik Prince’s UAE Private Army
US studies legality of American-led private army (Financial Times):The US State Department said on Sunday that it was examining the legality of an American-led private army that is being established in the United Arab Emirates.
Erik Prince, the founder of Blackwater private security company, is establishing a counter-terrorism force of up to 800 foreign mercenaries in Abu Dhabi, capital of the United Arab Emirates, The New York Times reported on Sunday.
Mr Prince has been hired by Sheikh Mohammed bin Zayed Al-Nahyan, the crown prince of Abu Dhabi, to recruit an American-led force of mainly South American former soldiers, through a company called R2, with a view to countering a perceived threat from Iran and bolstering domestic security, the report said.
“The department is aware of the R2 venture and is currently looking into it to make sure there are no potential International Traffic in Arms Regulations concerns,” a State Department spokesman confirmed on Sunday. The regulations govern the sale of defence services as well as defence equipment.
Members of the new force have been trained since last summer by former Special Forces soldiers from the US, South Africa and European countries in a camp outside Abu Dhabi, the newspaper said.
Secret Desert Force Set Up by Blackwater’s Founder (New York Times):
Still, it is not clear whether the project has the United States’ official blessing. Legal experts and government officials said some of those involved with the battalion might be breaking federal laws that prohibit American citizens from training foreign troops if they did not secure a license from the State Department.
Mark C. Toner, a spokesman for the department, would not confirm whether Mr. Prince’s company had obtained such a license, but he said the department was investigating to see if the training effort was in violation of American laws. Mr. Toner pointed out that Blackwater (which renamed itself Xe Services ) paid $42 million in fines last year for training foreign troops in Jordan and other countries over the years.
Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers May 17 Washington, DC. A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post. The five separate investigations were conducted by the Department of Housing and Urban Development’s Inspector General and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said. The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges. The federal audits mark the latest fallout from the national foreclosure crisis that followed the end of a long-running housing bubble. Amid reports last year that many large lenders improperly accelerated foreclosure proceedings by failing to amass required paperwork, the federal agencies launched their own probes. The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as leverage in their ongoing talks with mortgage companies aimed at forcing the firms to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures. The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents. Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company -- the nation’s largest handler of home loans -- failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Back then, the bank said it was resuming foreclosures, having satisfied itself that prior problems had been solved.And back in North Carolina? (Why your state and local governments are defunding education and stopping all improvements to the community's infrastructure, etc., etc. . .) From Susie at Crooks & Liars we learn (P.S. This is where I live!) that we're gonna need a lot more parking fines to be collected:According to the sources, the Wells Fargo investigation concludes that senior managers at the firm, the fourth-largest American bank by assets, broke civil laws. HUD’s inspector general interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, the sources said.
The investigations dovetail with separate probes by state and federal agencies, who also have examined foreclosure filings and flawed mortgage practices amid widespread reports that major mortgage firms improperly initiated foreclosure proceedings on an unknown number of American homeowners.
The FHA, whose defaulted loans the inspector general probed, last May began scrutinizing whether mortgage firms properly treated troubled borrowers who fell behind on payments or whose homes were seized on loans insured by the agency.
A unit of the Justice Department is examining faulty court filings in bankruptcy proceedings. Several states, including Illinois, are combing through foreclosure filings to gauge the extent of so-called “robo-signing” and other defective practices, including illegal home repossessions.
. . . The internal audits have armed state officials with a powerful new weapon as they seek to extract what they describe as punitive fines from lawbreaking mortgage companies.
A coalition of attorneys general from all 50 states and state bank supervisors have joined HUD, the Treasury Department, the Justice Department and the Federal Trade Commission in talks with the five largest mortgage servicers to settle allegations of illegal foreclosures and other shoddy practices.
Such processes “have potentially infected millions of foreclosures,” Federal Deposit Insurance Corporation Chairman Sheila Bair told a Senate panel on Thursday.
The five giant mortgage servicers, which collectively handle about three of every five home loans, offered during a contentious round of negotiations last Tuesday to pay $5 billion to set up a fund to help distressed borrowers and settle the allegations.
That offer -- also floated by the Office of the Comptroller of the Currency in February -- was deemed much too low by state and federal officials. Associate U.S. Attorney General Tom Perrelli, who has been leading the talks, last week threatened to show the banks the confidential audits so the firms knew the government side was not “playing around,” one official involved in the negotiations said. He ultimately did not follow through, persuaded that the reports ought to remain confidential, sources said.
. . . Some agencies involved in the talks are calling for the five banks to shell out as much as $30 billion, with even more costs to be incurred for improving their internal operations and modifying troubled borrowers’ home loans.
But even that number would fall short of legitimate compensation for the bank's harmful practices, reckons the nascent federal Bureau of Consumer Financial Protection. By taking shortcuts in processing troubled borrowers' home loans, the nation's five largest mortgage firms have directly saved themselves more than $20 billion since the housing crisis began in 2007, according to a confidential presentation prepared for state attorneys general by the agency and obtained by The Huffington Post in March. Those pushing for a larger package of fines argue that the foreclosure crisis has spawned broader -- and more costly -- social ills, from the dislocation of American families to the continued plunge in home prices, effectively wiping out household savings.
The Justice Department is now contemplating whether to use the HUD audits as a basis for civil and criminal enforcement actions, the sources said. The False Claims Act allows the government to recover damages worth three times the actual harm plus additional penalties.
Justice officials will soon meet with the largest servicers and walk them through the allegations and potential liability each of them face, the sources said.
Earlier this month, Justice cited findings from HUD investigations in a lawsuit it filed against Deutsche Bank AG, one of the world's 10 biggest banks by assets, for at least $1 billion for defrauding taxpayers by "repeatedly" lying to FHA in securing taxpayer-backed insurance for thousands of shoddy mortgages.
In March, HUD's inspector general found that more than 49 percent of loans underwritten by FHA-approved lenders in a sample did not conform to the agency's requirements.
Last October, HUD Secretary Shaun Donovan said his investigators found that numerous mortgage firms broke the agency’s rules when dealing with delinquent borrowers. He declined to be specific.
The agency’s review later expanded to flawed foreclosure practices. FHA, a unit of HUD, could still take administrative action against those firms for breaking FHA rules based on its own probe.
The confidential findings appear to bolster state and federal officials in their talks with the targeted banks. The knowledge that they may face False Claims Act suits, in addition to state actions based on a multitude of claims like fraud on local courts and consumer violations, will likely compel the banks to offer the government more money to resolve everything.
But even that may not be enough.
Attorneys general in numerous states, armed with what they portray as incontrovertible evidence of mass robo-signings from preliminary investigations, are probing mortgage practices more closely.
The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures.
A review of about 2,800 loans that experienced foreclosure last year serviced by the nation's 14 largest mortgage firms found that at least two of them illegally foreclosed on the homes of "almost 50" active-duty military service members, a violation of federal law, according to a report this month from the Government Accountability Office.
Those violations are likely only a small fraction of the number committed by home loan companies, experts say, citing the small sample examined by regulators.
In an April report on flawed mortgage servicing practices, federal bank supervisors said they “could not provide a reliable estimate of the number of foreclosures that should not have proceeded."
The review of just 2,800 home loans in foreclosure compares with nearly 2.9 million homes that received a foreclosure filing last year, according to RealtyTrac, a California-based data provider.
“The extent of the loss cannot be determined until there is a comprehensive review of the loan files and documentation of the process dealing with problem loans,” Bair said last week, warning of damages that could take “years to materialize.”
Home prices have fallen over the past year, reversing gains made early in the economic recovery, according to data providers Zillow.com and CoreLogic. Sales of new homes remain depressed, according to the Commerce Department. More than a quarter of homeowners with a mortgage owe more on that debt than their home is worth, according to Zillow.com. And more than 2 million homes are in foreclosure, according to Lender Processing Services.
Rather than punishing banks for misdeeds, the administration is now focused on helping troubled borrowers in the hope that it will stanch the flood of foreclosures and increase consumer confidence, officials involved in the negotiations said.
Levying penalties can't accomplish that goal, an official involved in the foreclosure probe talks argued last week.
For their part, however, state officials want to levy fines, according to a confidential term sheet reviewed last week by HuffPost. Each state would then use the money as it desires, be it for facilitating short sales, reducing mortgage principal, or using the funds to help defaulted borrowers move from their homes into rentals.
In a report last week, analysts at Moody’s Investors Service predicted that while the losses incurred by the banks will be “sizable,” the credit rating agency does “not expect them to meaningfully impact capital.”
May 19, 2011I miss my country. ________________________Dave Dayen and I talked about this Tuesday night on my radio show (click here to listen) and he goes into more detail in this American Prospect article. Think about all the revenue lost by your local county government because of this little shell game, the fact that the MERS system used instead of the traditional land-recording system may be illegal, and you'll understand why it's a big deal:
State and federal regulators have yet to stop mortgage-foreclosure abuses and exact punishment on the banks responsible for them. A slap on the wrist for 14 of the largest mortgage firms, a still fruitless effort by state attorneys general to reach a settlement with banks, and superficial investigations into the extent of the abuses have done little to answer questions about the proliferation of mortgage fraud.
Without that knowledge, regulators are at a disadvantage in arriving at an equitable solution.
Enter the most unlikely players in this whole mess: unassuming elected county officials known as Registers of Deeds. Whenever a mortgage gets transferred from one owner to another or a home falls into foreclosure, documents of the transaction get filed at the county Register's office. Much of the truth about systemic document fraud is sitting in these local offices. Until now, virtually no Register of Deeds had bothered to take a look.
But Jeff Thigpen, the Register of Deeds in Guilford County, North Carolina, a county of about 465,000 in the center of the state (the largest city is Greensboro), decided to survey all the mortgage documents submitted to his office by DocX, a notorious "mortgage mill" that processes documents on behalf of lenders, between August 2006 and April 2010. He was inspired by a 60 Minutes investigation revealing numerous forgeries, backdating, and other false information on mortgage documents. "When I saw that [story], I was basically on fire," Thigpen says. "'I know this material is in my office, I've got to find it, I've got to get it out.'"
Out of the 6,100 documents Thigpen examined, 4,500 showed signature irregularities. The name of one DocX employee, Linda Green, who was acting as a vice president for several major banks, was forged 15 different ways on the Guilford County documents, rendering them invalid. Thigpen's investigation was one of the first systematic assessments of mortgage document fraud in the entire country, certainly more robust than anything conducted by state and federal regulators.
Thigpen was elected as the Guilford County Register of Deeds in 2004, during "the steroid era of land records," as he describes it. Mortgage securitization has been around since the 1980s, but it became widespread as the housing bubble inflated, when banks sliced up subprime mortgages into securities and sold them to global investors as an allegedly safe product. To reduce costs, the banks invented and funded the Mortgage Electronic Registration System (MERS), an electronic registry that allowed banks to circumvent county registers and thereby avoid paying the recording fee of roughly $35 per mortgage.
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