This settlement arises from multiple abuses found in the servicing of loans and the foreclosure process over the past several years. At the height of the housing bubble, banks sliced and diced mortgages and traded them with little regard for the rules following land recording or securitization to such a sloppy extent that they lost track of the true owner on potentially millions of homes.

To cover up for this massive failure, banks and their servicing units have been found to have routinely forged, back-dated and fabricated documents at county recorder offices and state courts across the country. Furthermore, they employed “robo-signers,” who signed hundreds of thousands (if not millions) of documents and affidavits without any knowledge of the underlying mortgages. In addition, investigations uncovered massive servicing abuses, including illegal fees charged to borrowers, putting borrowers into foreclosure at the same time as they were working out loan modifications, failing to honor previous settlements where promises were made on modifications, and countless other errors that maximized servicer profits and gouged homeowners.

There are also cases of wrongful foreclosures where homeowners have been turned out of their homes without just cause, and servicer-driven foreclosures, where servicers illegally added late fees and applied payments inaccurately, pushing the homeowner into foreclosure. This is but a smattering of the examples of foreclosure fraud and servicer abuse found in a series of interlocking investigations, court depositions, reviews of documents in registers of deeds offices, and homeowner testimonials.

New York Attorney General Eric Schneiderman abruptly cancelled a conference call yesterday 10 minutes before it was to begin. The subject was supposed to be the foreclosure fraud settlement, amid speculation Schneiderman would announce that he would join. This would spur other holdouts to join, presumably, and at the very least break the somewhat united front against the settlement. But it didn’t happen, and the cause is likely the banks objecting to the lawsuits he and others have filed or could file.

The city had police move on Occupy Buffalo early in the morning after it decided not to renew the occupation’s permit for Niagara Square. At least ten were arrested and tents and personal property were bulldozed. Occupiers had been offered an agreement, which they turned down. After midnight, they were in Niagara Square without a permit but the city could have continued to negotiate with Occupy Buffalo and chose to carry out an eviction instead.

Andrew Sullivan attempts to mount a defense of President Obama’s record from the standpoint of achieving liberal objectives. But on some key items, he gets the President’s record and positions wrong, even backwards.

NYT reporter Louise Story reports on a new investigation in New York of big banks and their mortgage practices. This one is not being run by Attorney General Eric Schneiderman, though he reserves the right to get involved. Instead, the New York Department of Financial Services is investigating the banks on the issue of forced-place mortgage insurance, one of the biggest bank scams going.

I’m saving my “What to Look for in 2012″ listicle for tomorrow, but one of the issues that may not make the list, but which is terribly important, is the battle in the states over hydraulic fracturing, or fracking. 2011 was the year when this issue finally bubbled up to the surface (pardon the pun) and into the consciousness of the public. The critically acclaimed Gasland came out in 2010, but anti-facking forces benefited this year from some scientific revelations. Independent studies for the first time identified fracking as a cause of methane contamination and water pollution, and late in the year, the EPA agreed in a case in Wyoming.

Until now, only the State Attorney General could bring action under the Martin Act, a securities fraud law in New York State that is much more expansive than federal statutes. Typically the plaintiff must prove intent to commit fraud; under the Martin Act the plaintiff need only prove that fraud was committed. Now, as a result of a new ruling, any aggrieved private actor can use the Martin Act as part of their lawsuit. This empowers investors of all sizes to go after the banks on securities fraud.

In addition to the maneuvers aimed at raising taxes on the rich in California, in New York, where the process to raise said taxes isn’t as byzantine, state leaders have agreed in principle on a deal to increase taxes on the wealthy. And this is a reversal from a vow by Andrew Cuomo from earlier in the year to allow increased taxes on the rich to expire.

This is a victory for environmentalists who wanted to stop the fracking regulations from taking effect. The commission wanted unanimous support and Delaware’s announcement guaranteed a close vote. If New York and Delaware continue to hold out this will be postponed indefinitely.

Embattled Oakland Mayor Jean Quan, speaking in an interview with the BBC, casually mentioned that she was on a conference call with leaders of 18 US cities shortly before a wave of raids broke up Occupy Wall Street encampments across the country.