Mortgage Settlement Collapsing?

[marmar]

from istockanalyst.com:




Mortgage Settlement Collapsing?
By: Karl Denninger | Aug 15, 2011



Hmmm....

Geithner may try, but he cannot compel Attorneys General in both parties to settle for pennies on the dollar and relinquish all of their liability for consumer protection violations and fraud upon state courts. He cannot influence investors who see a giant meal ticket in the form of forcing big banks to repurchase faulty mortgage backed securities. If there was a magic bullet in this debacle, it would already have been fired.

Now that sounds interesting. We know that the banks have been furiously lobbying in Washington DC to cast off the liability for their former actions. The problem? These are state law issues and Washington DC has no jurisdiction - even though it would like to so it can accept their bribes, er, "campaign contributions" to make it all go away.

They've trotted out Kathryn Wylde, the President of the Partnership for New York City, to attack Eric Schneiderman for his intervention in the Bank of America settlement with investors over mortgage backed securities. Wylde is going to bat for BofA as well as the Bank of New York Mellon, the trustee for the MBS in the settlement. And she is actually arguing that Schneiderman, by defending the rights of investors and seeking the truth on out and out securitization fraud, is threatening the existence of the financial sector in New York City. No, really.

That's nothing new. The old "tanks in the street" argument is repeatedly trotted out - "the economy will collapse if you don't let us continue to loot!"

Of course the problem with such a premise is that there's only so much blood in the vampire's victims, and eventually it all gets sucked out. Then the victim undergoes circulatory collapse and the looting stops, like it or not.

We're there folks. ...................(more)

The complete piece is at: http://www.istockanalyst.com/finance/story/5357843/mortgage-settlement-collapsing

[Xipe Totec]

1. Who knew that state's rights would some day become such a two edged sword?

I laugh at these born-again federalists.

[malaise]

2. Read this carefully

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783_pf.html
<snip>
Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

This is why they went for Spitzer - note the timing

[Poll_Blind]

4. +1

Jesus what a nightmare. I do have hope, but sometimes I wonder why.

PB

[malaise]

5. It was easier to tear down Spitzer over his personal

sexual habits. Meanwhile Vitter was reelected to the Senate.

[Poll_Blind]

6. .

I agree but it really does piss me off that people can't keep their dicks in their pants. I mean, I'm a classic horndog. I have the sexual drive of a beastman from a Conan novel. And yet even I can't wrap my brain around how incredibly vulnerable some of these public figures make themselves by choosing to indulge in their sexual whims. I'm not saying I judge Spitzer, particularly. It's just...damnit. If you fuck the wrong person in this country it doesn't matter how noble your intentions are, otherwise.

I'm actually amazed that they didn't use the same tools to destroy MLK. I don't know if there could be another MLK, for instance, because he'd be caught with his pants down and then vilified by the same press who fawn over, as you mentioned, types like Vitter.

I'm getting rambly. There's an idea in there someplace- a disappointment, a hope and a fear.

PB

[malaise]

7. I'm coming to the conclusion that the few who are fearless

are also reckless :D
Meanwhile the right wing goons are ruthless in going after liberals but RWs only answer to their Jebus on matters sexual and the media covers up for them very nicely.

[xchrom]

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