The New New (USA-Certified) Mitty: Well-Respected Liar & U.S. Sues Wells Fargo in Mortgage Fraud Case (Like Citi's, Etc.)

Charles Pierce never disappoints.

And especially not today.

The New New Romney Is a New Kind of Mendacious Liar

By Charles Pierce, Esquire

10 October 12

eaving aside for the moment the audacity of Josh, we must leave it to the fanzine reporters from Tiger Beat on the Potomac to explain in-depth how the heroic intervention of the plucky Romney family forced the transition from the previously unsuccessful campaign of sheer mendacity to the campaign of sheer mendacity that seems to be on something of a roll at the moment. The basic Politico analytical technique - buying whatever magic beans are being sold, as long as the beans are sold anonymously - is perfectly suited to the fairy tale of how Ann and the boys convinced the paterfamilias to drop all this Beltway wiseguy nonsense and get back into the comfy, well-worn, three-piece, double-breasted bullshit suit he used to wear when he was governor of whatever that state was he once was governor of. Let's break down The New New Romney, shall we?

The family pushed for a new message, putting an emphasis on a softer and more moderate image for the GOP nominee - a "let Mitt be Mitt" approach they believed more accurately reflected the looser, generous and more approachable man they knew.

And, after Ann waved her magic wand, and the children all prayed really, really hard.

When the history of this campaign is written, the family intervention will be among the most important turning points in the Romney saga. Until the weeks before the first presidential debate, the candidate sided with Stevens over his family's skepticism, accepting the strategist's view that the best way to win was to point out President Barack Obama's flaws and articulate generic promises to do better.

(We interrupt Afternoon Story Hour to bring you this important announcement from the blog's Emergency Hogwash System: Is the argument here really that Romney has abandoned "generic promises to do better"? Really? More on this as events warrant.)

And for what purpose was this Very Special Columbus Day Family Special wrought?

In public and private, Ann Romney made no secret of her frustrations. Candidates' spouses often think the husband or wife is getting a raw deal, and that they are better than the political caricature being drawn. But Ann Romney's agitation was palpable: She felt the Obama campaign had dishonestly made her husband out to be something he is not, and was eager to see a more forceful response, especially one that played up his humanity. She wanted to humanize her husband; play up his charity; and showcase how in politics, business and life, he has tried to do the right thing, even when it was not popular.

Forcefully played-up humanity. The basic Romney family sales pitch since Dad decided to run for president 30 seconds after he was elected governor of whatever state that was that elected him governor that time.

That's enough of all this. Read the whole saga of Ann Romney, Political Wizard if you care to do so. (However, I tend to discount any story that depends on people's bragging anonymously about how smart they are.) Nevertheless, it has become apparent that the various sheeplings and scooplettes of our elite political media are buying this wholesale and, if the polls are any indication of it (and that's still an if), they are doing a very good job selling it out in the country. There is now an actual election going on, and we should accept that, and we should be quite amazed by the campaign being waged by the Republican candidate because, frankly, I've never seen its like before and, should it succeed, our national political handbasket will have drifted past a serious mile marker on the River Styx.

That Willard Romney is a preposterous candidate for either party to run three years after his general social and economic class nearly burned down the world economy always was a given. That, in the intervening years between his two presidential campaigns, Willard Romney really has become quite a remarkable liar is something to which we all should have become accustomed by now. (It certainly shouldn't have startled the president as much as it obviously did last week.) That he would attempt to "pivot" away from the stances he took to win the Republican primaries was as inevitable as the dawn, especially given the previous two factors we've mentioned. When it is argued that he is running a "post-truth" campaign, this should surprise approximately nobody. However, I am rather stunned that the quote from the primary debates that seems to be most revelatory of the Romney campaign was the answer he gave when poor, unfortunate Rick Perry asked him about the undocumented immigrants who once trimmed the hedges at the Romney family manse.

"I'm running for office, for Pete's sake, I can't have illegals."

This is not just lying or fudging or flip-flopping, although it contains elements of all of these. It is the same impulse that has fueled his (apparently successful) refusal to disclose fully his tax returns. It is the same impulse that led him to say what he did in the debate about his health-care plan and pre-existing conditions, and then have his campaign dispatch Eric Fehrnstrom to the spin room to declare precisely the opposite. And it is the same impulse that led Mike Murphy, a Republican strategist, to declare on Sunday that . . .

I'll say it right now. Every sector in town, moderates, liberals, everybody says here is the problem, you guys won't give him any credit for closing loopholes because like you guys he won't name all the loopholes while you attack him for doing it. You are attacking him for not giving the target and then you're attacking when you get the target.

This is altogether stunning. All candidates soft-pedal positions that they feel might cost them votes. (Romney's running mate is something of a past master at it.) All candidates lie, or fudge, or flip-flop with something like abandon in order to win an election. But what Willard Romney is saying to the electorate here is so deeply, profoundly cynical that it seems to me to be unprecedented. In essence, this is what he's selling to the country.

"I'm not giving you specifics because I might lose the election, and I'm telling you that right up front so you can make it part of your calculation about voting for me. If I tell you what I'm going to do, you will vote against me. I know that. You know that. We are in agreement that, if I lay out my policies in clear and unambiguous language, you will not vote for me. If I tell you explicitly that, yes, your mortgage-interest deduction is going up the spout so I can shovel a few zillion more quatloos toward the Pentagon, nobody who owns only one house ever will vote for me. So, no, I'm not going to tell you what loopholes will be closed. For that reason, and that reason alone, I am declining to tell you what I will do as your president.

"I am not refusing to do this because circumstances in office may make me go back on what I have promised. I am not George H.W. Bush. I am not refusing to do this because I have to clue what I will do if I win. I am not George W. Bush, either. I am doing this because my policy ideas will make me unpopular and therefore, I am not going to share them because the opposition may use them to say mean things about me and help me lose the election. We all are in agreement on that. I am not required to do anything that might jeopardize my chances, and that includes telling you people what I will do if you elect me, because I'm running for office, for Pete's sake."

(We should have seen this coming when newly-minted, Politico-endorsed political genius Ann Romney made pretty much the same point about the campaign's now-apparently-successful refusal to release any more of the candidate's tax returns, saying that they'd given "you people" all we needed to know, and that there would be nothing else released because to so so would provide "more material for attack." And, my dear young man, that simply is not done.)

Fehrnstrom's famous "Etch-A-Sketch" moment was of a piece with this, too. Yes, everything we've said is to truckle to our crazy-ass base, and everybody knows that is the case, so, when we completely reverse our positions two or three times before November, we will be engaging in clever campaign tactics that you should all applaud, being basically a nation of Politico reporters. Apparently, announcing your dishonesty in advance is now the highest form of political integrity. I have to stop missing so many meetings.

I've lived through two Nixon campaigns, and Reagan's image-only 1984 re-election extravaganza, and Lee Atwater's race-baiting efforts on behalf of Poppy Bush, and the two Karl Rove-scripted rodeos that elected C-Plus Augustus, and I can honestly say I've never seen the profound combination of blatant mendacity and obvious cynicism that is the Romney campaign at this particular historical moment. If it succeeds, to hell with it. Let's just have a swimsuit competition in 2016.

And lest we forget what having Mitt Romney's candidacy as a Republican means after the financial catastrophes brought to us by his peers . . .

U.S. Sues Wells Fargo in Mortgage Fraud Case

By Rick Rothacker, Aruna Viswanatha, Reuters

10 October 12

The U.S. government filed a civil mortgage fraud lawsuit on Tuesday against Wells Fargo & Co, the latest legal volley against big banks for their lending during the housing boom.

Damages and Penalties

At issue In Tuesday's suit are loans Wells Fargo made through a program that allows banks to originate, underwrite and certify mortgages for FHA insurance, according to the complaint. Under the so-called Direct Endorsement Lender program, neither the FHA nor HUD reviews a loan before it is approved for FHA insurance, but lenders are supposed to follow program rules.

Between May 2001 and October 2005, according to the complaint, Wells certified more than 100,000 loans for FHA insurance, even though the bank knew its underwriters had failed to verify information that was directly related to the borrower's ability to make payments.

"The extreme poor quality of Wells Fargo's loans was a function of management's singular focus on increasing the volume of FHA originations (and the bank's profits), rather than the quality of the loans being originated," the complaint said.

The bank also failed to properly train its staff, hired temporary workers and paid improper bonuses to its underwriters to encourage them to approve as many loans as possible, the complaint said.

During a 7-month stretch in 2002, at least 42 percent of the bank's FHA loans failed to actual qualify for the insurance they were submitted for, even though the bank's internal benchmark for such violations was set at 5 percent.

Wells also kept its defective loans secret from HUD, the complaint said. From January 2002 to December 2010, the bank internally identified more than 6,000 "materially deficient" loans, including 3,000 that had defaulted in the first six months, but did not comply with its self-reporting obligations, the complaint said.

Prior to October 2005, the bank did not self-report a single bad loan, and the inadequate reporting continued even after a HUD inquiry that year, the suit states. All told, from 2002 through 2010 the bank self-reported only 238 loans, according to the complaint.

Some of the mortgages Wells Fargo suspected of fraud but declined to report to HUD include loans it separately reported as suspicious activity to the U.S. Treasury Department, according to the suit.

The complaint seeks treble damages and penalties for hundreds of millions of dollars in insurance claims already paid to Wells Fargo, as well as penalties on claims HUD may pay in the future.

Citi, in its settlement, paid $158 million to resolve allegations that a "substantial percentage" of around $200 million in insurance claims failed to meet FHA requirements.

The Wells Fargo complaint also includes specific allegations that the lender failed to report another $190 million in loans it should have flagged as potentially problematic to HUD, which potentially adds to any eventual payout from the bank.