Quelle Surprise! DoJ Pushing State AGs to Whitewash Servicing Abuses; Failure to Investigate Confirmed

A publication from Naked Capitalism

Quelle Surprise! DoJ Pushing State AGs to Whitewash Servicing Abuses; Failure to Investigate Confirmed

Posted: 11 Jul 2011 12:31 AM PDT

The latest report by Shahien Nasirpour at Huffington Post confirms two things you’ve heard here and on some other sites following this sorry affair: first, that Tom MIller, Iowa attorney general who is leading the 50 state attorneys general negotiations on mortgage abuses, is a liar, and second, that any settlement will be a whitewash.

Actually, we already knew Miller was a liar. Shortly after the effort was launched, Miller promised that “”We will put people in jail.” He then started walking that back. Not only did he tell Bloomberg that they were NOT pursuing criminal charges, but per an e-mail:

I was w/ a European documentary maker this weekend who spoke to Miller a few days ago and said Miller relayed the fraud isn’t so bad, everything will be worked out .. the standard line; he’s already made up his mind. He doesn’t want those European governments demanding their money back. The meeting is a photo-op setup because the too-big-to-fail crowd is scared of put-back liability and shorts; they’re working hard to make it appear they’re doing something to quiet everybody down.

Note this message was sent BEFORE MIller made the “jail the baddies” promise that MIller recanted. And it indicates that this entire affair was intended to be an exercise in kabuki theater rather than anything remotely resembling a real investigation.

That brings us to MIller’s second lie. After a staffer ‘fessed up that no investigations were being undertaken, Miller maintained that extensive examinations were underway. That, as Nasiripour indicates, confirming earlier intelligence via Gretchen Morgenson, is complete crap (emphasis ours):

According to sources familiar with the ongoing state and federal probes, state and federal officials have wasted months not digging into the details of the foreclosure crisis, yielding little of value in court and undercutting the lenders’ incentive to strike a settlement of greater benefit to homeowners and taxpayers.

The investigators have yet to gather many documents, conduct depositions or assemble tallies of aggrieved homeowners. They don’t yet have a good handle on the number of wrongful foreclosures, the amount of fraudulent documents filed in local courts or the volume of legal instruments processed by so-called “robo-signers,” the agents that lenders employed to process foreclosure filings en masse without examining the underlying paperwork.

“The evidence a prosecutor would use is not in the possession of the prosecution,” said one person familiar with the ongoing settlement talks.

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