Housing Wire reports on bank attorneys preparing for “showdowns” with the RMBS working group on fraud cases. Well, they have to justify their billings to their bosses, don’t they? The reality of whether banks should sweat the investigation is far less clear. In fact, we have more information from a couple sources today that suggest the attorneys don’t have to keep up this facade.

Barney Frank and Brad Miller tried to shake up a House Financial Services Committee hearing yesterday. As per usual, Republicans wanted to go after the CFPB’s funding and subject it to the appropriations process. As it stands, CFPB derives its funding from a portion of the funding of the Federal Reserve, which comes from sources independent of Congress. The argument goes, why should CFPB be exempt from Congressional oversight in terms of its funding? The real agenda is that Republicans would then squeeze funding for CFPB to render them ineffective, or attach strings to the funding, either explicitly or implicitly.

Let’s briefly recap Congress’ busy day yesterday, as they head out for a two-week recess (Spring Break ’12 Cancun?).

Pro Publica continued its jihad against Ed DeMarco yesterday with yet another piece blaming him for the sins of the Administration’s housing policy. This is just an overview piece that muses about how to best get rid of DeMarco. Actually, it’s a bit off-message, because they’re just supposed to say that the White House has no choice and this one dude is holding up an economic recovery single-handedly.

I mentioned earlier today that Shaun Donovan tried to sell the weak $2,000 pittance provided to foreclosure victims in the recent servicing settlement by saying that the OCC (Office of the Comptroller of the Currency) reviews still offer the opportunity for individuals who were wrongly foreclosed upon to reap restitution. I scoffed at this because those OCC reviews are widely seen as ineffectual and designed to whitewash the problem, with the banks self-reporting their own reviews through “independent consultants” they hire and pay.

As it turns out, Martin Andelman, with excellent timing, got an insider at Wells Fargo to expose just what a sham these foreclosure reviews are.

I’ve been amused by the consistent pushback from HUD’s Shaun Donovan, who has made himself into a leading figure just by his ubiquitousness, as it relates to the foreclosure fraud settlement. Donovan has been the point person to rebut criticism of the settlement, and he is back again today in CNN.

If you thought the foreclosure fraud settlement was bad, get this: the Office of the Comptroller of the Currency, the weakest federal regulator in the financial sphere (I’ve taken to calling them the Office of Bank Advocacy), decided to use the cover of the big settlement to announce their fines in their consent order with big bank servicers.

The “new” details of the proposed State AG – Banks foreclosure fraud settlement have mostly been revealed before. Under the proposed agreement, between $19 and $25 billion (depending on California’s inclusion, which is unlikely, so I’d expect the smaller number) would be distributed from the banks, in three separate areas. Overall, it’s inadequate.

The recess appointment fight nominally only concerns Richard Cordray, the nominee to run the Consumer Financial Protection Bureau. Republicans want to block his confirmation because they stop the agency from gaining regulatory powers over non-bank financial institutions if they remain without a director. But a number of other nominees are caught in the crossfire of this fight, in particular nominees to lead other key financial industry NLRB regulators.

Bank of America has been dealing with extreme liabilities since they made the terrible twin purchases of Countrywide and Merrill Lynch. Their liabilities stem from foreclosure fraud and a huge pile of non-performing mortgages, plus some exposure to Europe’s debt. Now regulators are directly warning them to improve their financial condition.