HUD Investigation Shows Banks Covered Up Widespread Illegal Acts – Government offers to bring them their check and validate their parking
It seems that the Department of Housing and Urban Development’s Inspector General has been conducting five confidential investigations into Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial and with the investigations now complete, HUD has referred the findings to the Department of Justice.
Shahien Nasiripour of The Huffington Post is reporting that the findings accuse the banks of defrauding American taxpayers through the handling of foreclosures on homes that were purchased with government-backed loans. The audits accuse the five major lenders of violating the False Claims Act, a law designed for use against companies that are alleged to have cheated and/or defrauded the government.
According to Shahien’s story in HuffPo, the secret investigations were initiated in response to last year’s reports, which indicated that large lenders were improperly accelerating foreclosure proceedings… or, in other words… look who just figured out that robo-signing affidavits and other documents required for the legal transfer of title, might just be considered fraudulent in some circles.
Bummer… Just as I convinced my daughter to major in Fraudulent Document Production in college in anticipation of a career in the banking industry, and now I’m not even sure those departments will still exist 5-6 years from now. Is this the best time to get tough on fraud, don’t we need those jobs? What will the “Linda Greens” of the world do for work now?
Besides, I thought that last fall, Bank of America froze all foreclosures in order to conduct an internal investigation and two weeks later said everything was ship-shape and commenced foreclosing once again.
Same thing went on at JPMorgan Chase, GMAC/Ally Financial, and Citibank, right? And, Wells Fargo said they didn’t even have to conduct an investigation because they already knew that they didn’t have a single duck out of line, as far as foreclosures were concerned. Yes sir, perfect paperwork starts at Wells, the signs should say.
Well, what the heck was all that about? You don’t mean to say that it was all pure fabrication theater and that in reality the banks lied through their collective teeth and attempted to white wash their crimes so no one could see them, do you?
Actually, that’s not the amazing part, as far as I’m concerned. What I’m positively dumbfounded over is that there was actually someone in Washington D.C. who wasn’t dumb enough to buy off on the banks inconceivably goofy lies.
“Yes, we were robo-signing” tens of thousands of fraudulent documents a month, but it’s not a problem, because we have the proper paperwork… it’s just that it’s in storage and the robo-signing just seemed easier than driving all the way across town to the storage unit.”
“Oh, and it’s really nothing anyway… just dotting t’s and crossing I’s. What was that? Widespread? Oh heavens, no… we’re going with the words we use to describe everything that becomes public: “isolated incidents.” What’s that? Yes, we know we were robo-signing tens of thousands a month and at least the five largest banks were involved, but we were experiencing a lot of do-overs, so 100,000 robo-signed documents may have only translated into 6-7 mortgages… see… “isolated incidents,” like we said. All but those 6-7 are in tip-top shape, we swear.”
It’s too bad that back then, no one wrote anything that pointed out how absurd this line of crap from our bankers really was… oh, wait… that would be me: Alright Banker-People… That’s Enough. You’re Not Making Sense and You’re Making Me Dizzy. (It’s even got a Mandelman-adapted Broadway show tune in the middle.)
Okay, Shahien… back to you at HuffPo…
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.
And, get this…
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.
See… what did I just say?
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.
OMG, not Wells… what happened to your linear ducks?
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.
Why is that number always unknown? Maybe they need some volunteers with decent counting skills to head over to Washington D.C. and lend a hand. I’ll go… I can count to… gosh… I want to say… well, high.
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.
Oooh, oooh, pick me, pick me… I know the answer to that one. No need for too much “scrutinizing” the answer is NOOOOOOO, and HELL NOOOOOOO.
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.
Uh oh… those things sound like actual crimes though, right… I mean, like criminal crimes?
Such processes “have potentially infected millions of foreclosures,” Federal Deposit Insurance Corporation Chairman Sheila Bair told a Senate panel on Thursday.
Oh, for heaven’s sake… Sheila… what are you doing here… this isn’t your article, you’re two articles to the right. I covered you two days ago… now back to your page this instant.
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.
And why should he have to be specific? It’s only people losing homes that are at issue here… no big a deal. So what, if by those rules being broken someone lost their home but shouldn’t have… keep the details to yourself Shaun. Protect the bank that broke the rules… to hell with the homeowner.
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. 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.
Oh, that sounds positively great… more loans that don’t conform to a federal agency’s requirements? Because we didn’t collect enough of those this last time around, I suppose.
- 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.
- 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.
- Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions.
Well, swing your partner round and round,
And turn those banksters upside down.
We’ll turn the corner ‘fore it’s too late,
And say goodbye to foreclosure-gate,
We’re gonna’ want more than an interest rate.
Watch out them banksters can be rough,
But this time we will call their bluff.
When they say they’re too big to fail,
Just send them all straight off to jail,
And tell the judge to deny their bail.
Homes underwater, as you well know,
So our principal you must forego,
We won’t stand for the status quo,
Now is the time, it’s apropos.
Before this turns into a drunken brawl,
And we turn banks from too big to small.
And put banksters up against the wall,
We’re here to fight for the long haul.
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.
WHAT WAS THAT? EXCUSE ME… WHICH OFFICIALS SAID THAT… SPECIFICALLY? I WANT NAMES, DAMN IT.
Rather than PUNISHING banks for MISDEEDS?
Misdeeds? What happened to fraud on the courts, illegal home seizures, countless abuses of the Servicemember Civil Relief Act… violations of the False Claims Act? MISDEEDS? NAUGHTY LITTLE DALLIANCES? ARE THESE PEOPLE KIDDING?
Look… you can’t possibly think… I mean… there’s absolutely no chance… wait… what I’m trying to say is… no, that’s not right… it’s more that… hold on… are you out of your… how can you say… I’m not going to… because the whole thing is… Excuse me just a moment…
Memo to Nameless Officials…
Not that any of you mindless sycophants ever listen to what I have to say, but in the unlikely event that I’ve caught you in a rare moment of clarity and mindfulness, and I mean this with all due respect…
If you think, even for a moment, that the 20 million ‘troubled borrowers’ and perhaps 60 million people that you have allowed to be abused, shamed and beaten down by the servicing companies of the major banks for the last three years, are going to be in any sense mollified by your “focused help” at this stage of the crisis, while they watch banks not be punished for their ‘misdeeds,’ as you put it… you’re wacked.
I realize that you guys are oblivious to what is going on in America’s middle class communities, but let me assure you people are near enraptured by the prospect that perhaps there might be a shard of hope that we are still a country of laws and not one where justice never visits the wealthy.
So, you go ahead and focus all the help on troubled borrowers you want, and there will never be joy, there will never be peace… as long as their tormenters are allowed to go unpunished, only made richer by their acts. Amen.
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.”
Oh, well good then.
Representatives of HUD and its inspector general declined to comment.
Of course they declined. And how transparent of them…