John O'Brien, Registry of Deeds for Southern Essex County in Massachusetts is asking that Tom Miller, Iowa Attorney General, step down. Miller is the lead AG in the controversial settlement with the big banks on mortgage servicing fraud.
In his most recent obscene act Miller kicked Attorney General Eric Schneiderman off of the 50-state task force probing foreclosure abuses and negotiating a possible settlement agreement with the mortgage firms.
Schneiderman, a Democrat who's in his first term as New York's top law enforcer, has been among a group of state legal officers who has opposed a speedy resolution. He's leading his own investigation into mortgage improprieties, subpoenaing documents from the nation's largest financial institutions and reviewing court records for possible illegal home repossessions.
When Schneiderman launched the investigation in April. He said he was "stunned" to find the multi-state probe so lacking that no documents or witness depositions had been obtained.
"We have no leverage," Schneiderman said in an interview with the Democrat and Chronicle.
Schneidernan getting kicked off the committee should come as no surprise to anyone following the foreclosure negotiations and is sickeningly similar to Pam Bondi, Florida's Attorney General firing Theresa Edwards and June Clarkson, who were heading up investigations on a series of mortgage related crimes for over a year.
While Bondi insists that the firings were a result of poor job performance, Miller points more towards attitude and that Schneiderman is somehow not a team player.
"New York has actively worked to undermine the very same multistate group that it had spent the previous nine months working very closely with," Miller said. "While we certainly respect the right of any state to choose to no longer participate in a multistate and to pursue another path, working to actively undermine a multistate while still a member of the Executive Committee simply doesn't make sense, is unprecedented and is unacceptable. Accordingly, today I informed New York that it is no longer a member of the Executive Committee."
"This is like Pam Bondi firing the two assistant AGs in Florida," O'Brien said. "Miller claims that Schneiderman was undermining the negotiations. Why wouldn't he since the negotiations are far from being in the best interest of homeowners and the general public? This settlement clearly favors the banks and I'm one hundred percent behind Eric Schneiderman. This is an outrage and they are beginning the process of selling the American people down the drain I say Miller should step down and all AGs should be appalled at what has happened."
Schneiderman's removal will likely make it easier for state and federal officials to reach an accord with the five banks. However, the potential amount of money they'll be able to extract will likely decrease.
American Banker posted the 27 term sheet of the negotiations presented to the banks with major servicing operations by the AGs and Federal Banking Regulators.
The deal completely handcuffs state attorneys general whose constituents are suffering serious economic damage as a result of the foreclosure fiasco and fraud by the banks and servicers.
When the investigation into robo-signing and fraud, Tom Miller had a brief moment of righteous advocacy until he received $261,445 in campaign contributions from out-of-state law firms and donors from the finance, insurance, and real estate sector shortly after he announced he was seeking criminal charges and retribution from the banks for mortgage fraud -- that's 88 times what he has received in the past decade.
Yves Smith over at Naked Capitalism had this to say in an extensive piece on the matter that's well worth the read:
Josh Rosner, in an analysis for clients (no online source), argues that if a private sector attorney negotiated a deal like this, he'd be at risk of being sued for malpractice:
This "term sheet" may well tie the hands of states from bringing actions against prior improper servicing and back-end/foreclosure practices AS WELL AS improper front-end or assignment practices....If a private-sector lawyer, representing any harmed party, settled for damages without an investigation of actual damages they would likely be exposing themselves to malpractice, why would that not be the case here?
In other words, this is simply another example of how the too big to fail banks are chipping away at the rule of law. The banks have over time have fought successfully to reduce the influence of state laws and regulations on their business while increasingly bending the Federal regulatory apparatus to their will. But the state AGs are still enough of a force to be reckoned with that the Federal bank regulators are now applying considerable to pressure them into abandoning initiatives that could help homeowners in their states. Hopefully at least a few of these AGs will wake up and have the self-preservation instincts to realize that this settlement is not in their or their constituents' best interests.
The state attorneys general are under a lot of pressure to let the banks walk free with this deal. Homeowners on the other hand will suffer the consequences for years to come.
"I urge anyone in this country who owns property, or thinks they own property, to contact their states Attorney General and let them know that we are opposed to this agreement," O'Brien said. "Demand that they do actual investigations and audits like we did in Essex County when we uncovered thousands of fraudulent documents in our registry."
You can find the appropriate numbers here.
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