We’re going to get a lot of theater in the next year, with big talk about enforcement actions. In that regulatory filing by Wells Fargo, they also highlight what are known as “Wells notices,” essentially early warnings that they are about to be sued by the SEC over mortgage backed securities disclosures. Of course, every recent SEC litigation on MBS issues has ended up with a settlement where the offending company didn’t have to admit or deny wrongdoing. Unless there’s a gung-ho prosecutor/director of the investigative unit, this probably won’t change.
|By: David Dayen Wednesday February 29, 2012 10:40 am|
|By: David Dayen Monday February 6, 2012 7:45 am|
Housing and Urban Development Secretary Shaun Donovan sought to clarify comments to reporters made over the weekend about expectations of “substantial” principal reduction payments from the foreclosure fraud settlement made out of loans owned by private-label investors in mortgage-backed securities, not the banks themselves. In fact, Donovan told FDL News, the “large majority” of principal reduction would instead come from the banks’ own books. But the details and sequencing matter.
|By: David Dayen Monday July 11, 2011 3:05 pm|
Shahien Nasiripour leads today with a persistent complaint I’ve had about the state Attorney General investigation: that it was not an investigation at all, but an immediate move to settlement talks, in ways that undermined the goal of getting a solution that matches the level of fraud and abuse.
|By: emptywheel Tuesday December 14, 2010 1:20 pm|
A month ago, Brad Miller and a dozen other Congressmen — including House Financial Services Committee Chair Barney Frank — wrote the Financial Stability Oversight Council to ask that they look into the systemic dangers of foreclosure fraud. Timmeh Geithner just responded to that letter. His response makes it clear he actually read Miller’s letter — because he references the first item I’ve laid out above, though rather than actually respond to that request, he describes what the FSOC is actually doing instead of examining collateral loan files. His response to the second and third requests is even more insolent; he refuses to even repeat the second one, and rather than consider either one seriously, he just says FSOC will take action “if abuses are found.”
|By: David Dayen Friday November 19, 2010 7:58 am|
One of the more amusing moments of yesterday’s House Financial Services Committee hearings on foreclosure fraud was when the representatives for the loan servicers were asked why they were subsidiaries of the large financial institutions. The link between the servicers and the big banks, mainly caused by a series of mergers, leads to all kinds of conflicts of interest, because it inevitably pairs them up with the originator or trustee of the loan. The servicers had no real answer to this question. Finally, the Wells Fargo representative claimed that it was for “customer convenience,” because some customers had their mortgage and their checking accounts at the same bank.
Everyone’s jaw dropped in the hearing room.
Now Miller is out with a letter, signed by all the top leaders of the House Financial Services Committee, that seriously ratchets up the demands on the Financial Stability Oversight Council. Among other things, it asks the FSOC to use its authority under Dodd-Frank to force the large financial institutions to divest from the loan servicers.