This is one of those things that everyone knows, but at least it is nice to have verification:
Employees at major banks who churned out fraudulent foreclosure documents, forged signatures, made up fake job titles and falsely notarized paperwork often did so at the behest of their superiors, according to a federal investigation released Tuesday.
By now, it’s well documented that the nation’s biggest banks routinely “robosigned” legal papers to keep up with the wave of foreclosures brought on by the housing bust. But the new report from the inspector general of the Department of Housing and Urban Development reveals that those shoddy practices often came at the direction of managers at the banks, and that employees in some cases were judged by how fast they could get new foreclosure filings out the door.
“I believe the reports we just released will leave the reader asking one question: How could so many people have participated in this misconduct?” David Montoya, HUD inspector general, said in a statement. “The answer: simple greed.”
HUD investigators launched their inquiries soon after news of the banks’ practices caused a national uproar in late 2010, and government officials used their findings as they negotiated a recent landmark $25 billion settlement with the banks.
HUD reviewed foreclosure practices at all five banks involved in the recent settlement — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial. They issued subpoenas, pored over personnel files, conducted interviews with scores of employees and examined the quality control measures – or lack thereof – at the banks’ mortgage servicing units.
Repeatedly, according to the report, investigators were hampered by poor record-keeping at the banks, sluggish responses to requests for documents and an unwillingness to make employees available for interviews or to allow them to answer detailed questions at the virtual foreclosure factories where they worked.
Nevertheless, investigators pieced together a picture of a deeply flawed system riddled with errors, where employees often had little or no training, where managers encouraged wrongdoing and where haste trumped all else.
At Bank of America, for instance, performance reviews revealed that employees often were judged based on how quickly they worked and how many files they churned through, the HUD report stated. One manager noted in an employee review: “Your stats so far this year are as follows: Affidavits 46.97 per hour (standard is 49 per hour), Assignments 54.74 per hour (standard is 51 per hour) and DocEx 49.67 per hour (standard is 46 per hour).”
At Chase, operations supervisors “routinely signed foreclosure documents, including affidavits, certifying that they had personal knowledge of the facts when they did not,” nor did they bother to verify the accuracy of the documents they signed, according to the report.
In addition, the supervisors said in interviews with HUD officials that they often signed affidavits as an “assistant secretary” or “vice president” of Chase, when those were not their official titles. Rather, they were given those titles by Chase for the sole purpose of allowing them to sign legal documents; the title came with no other duties or authority, the report said.
What is stopping the HUD officials from handing over their research to the DOJ so we can start sending these people to jail?
Martin
One per minute? I hope the persons job was shredding, and not review/processing.
Clime Acts
But this is all blood under the bridge, isn’t it?
The little slap on the wrist “settlement” is their punishment and that will be that, no?
BGinCHI
But these are the makers, John. The makers!
Chico Escuela
RICO.
That is all.
DFS
What is stopping the HUD officials from handing over their research to the DOJ so we can start sending these people to jail?
Look at the president’s campaign donors list and all becomes clear.
Martin
Oh, and I’m sure it will come as cold comfort to anyone foreclosed on that that the standard for kicking them out of their home, and probably destroying at least half of their net assets was one minute, twelve seconds.
Martin
Nothing, except that most of the laws violated aren’t federal – they’re state. Which is why Obama formed the task force that he did, so that these things can go into the proper jurisdiction. So it’s not HUD to DOJ, but HUD to the State AG. And only OK opted out, so pretty much everyone else at least has a shot at seeing justice done here.
japa21
If anyone believes this investigation even would have taken place under a Republican administration, I have a bridge to sell you.
John Weiss
Disgusting. We need Glass-Stegall in the worst way. What was Bill thinking?
BlueDWarrior
Yeah nothing I saw reported about the settlement stated that anyone got blanket immunity or the sort. But a lot of these State AGs may be brought or Republican, which counts as brought anyway.
This is why they want all of these issues solved state-wise, because it’s easier to buy a couple dozen State AsG and Governorship than it is to buy the Presidency and enough Senators to block a good Federal AG.
Martin
@John Weiss: Glass Stegall was only a sliver of this. MERS was another, entirely separate part. CFMA was an another, entirely separate, and much larger part. The complete lack of oversight and regulation under a Republican president might have been the largest part.
russell
What do you think the odds are on anyone above the robo-signing clerk level going to jail?
russell
never mind jail.
what do you think the odds are of anyone who lost their home fraudulently getting either their home or their money back?
what’s in the 49-state deal for folks who were foreclosed on? isn’t it, like, $2k per homeowner?
Martin
@BlueDWarrior: I think if the state AGs really were in the tank for the banks, they would have opted out. Only OK did. Many of the key states are Democratic AGs – CA, NY, NV, DE (because that’s where the banks incorporate). FL is the big outlier and the one to watch. I don’t know how wingnutty Pam Bondi is, but I suspect she is exceeding so.
Rafer Janders
Make-work no-show union jobs! Union thugs! Corruption! Abus…oh, sorry, what? This wasn’t done by a union, but by Chase? Well, never mind, then. Withdrawn.
comrade scott's agenda of rage
Because this is Casablanca that’s why.
Oh yeah and SHUT UP THAT’S WHY!!!!!!!
@John Weiss:
He was listening to Robert Rubin. Just watch the documentary “Inside Job” for a full explanation. The fact that Geitner is where he is means we won’t see Glass-Stegall reinstated anytime soon.
Martin
@russell: I think there’s a good shot – but it’ll vary considerably by state.
@russell: As for getting their money back, that’ll be dependent on homeowners suing the bank. I don’t think that’ll happen on nearly the scale that it should.
Brachiator
@Martin:
Good point. This is why New York and some other states went after the banks and got them to agree to provide some relief to mortgage holders.
On the other hand, the Congress, led by Republicans and some key Democrats, with a signoff by former President Clinton, weakened federal laws which might provide some remedy. And the Republicans have been fighting tooth and nail to prevent any reasonable federal regulation.
Meanwhile, the banks and other lenders are busy pushing out crappy and misleading mortgage related documents, especially crappy Forms 1099As to people who have lost their homes through foreclosure.
John Weiss
Heh. I paid my mortgage off, a house I own in Dallas. Do you think I got a deed? Of course not. I got an un-notarized letter explaining that indeed I had paid it off. Upon pressing them, they said to contact the State of Texas for the title. I’ve heard nothing from the state after numerous enquiries. The title seems to be gone, gone. How the hell can I sell it (as if there was a market!) without a title?
I’m more than slightly pissed off.
runt
The prospect of a future job in these banks for the regulators.
Zifnab
@japa21:
This. It’s a drum-beat. The same drum-beat we saw in ’01 and ’02 before we invaded Iraq. Banker malfeasance stays in the headlines. All the ground work is laid for prosecution. Then Obama can wash his hands and say he did everything he could. If anyone else drops the ball, the mess won’t land on him. Savvy politician, that one. He’s not taking any risks on any side.
Martin
@John Weiss: Sue the bank for theft. You own the house. They admit you own the house. However they won’t turn over the only thing that actually proves you own the house. They’ve effectively stolen your house. Sue them.
Bullsmith
I think the acceptance of legalized fraud, as long as it’s done by intrepid capitalists and/or oligarchs, is really the central question of our time. Last time this happened, it led to Communism as a counter, and even more rapacious, ideology. Right now I have no idea where it’s going. No fucking idea. Is this course sustainable?
muddy
After the president was on tv last week saying that those in good standing should go in and get the best deal currently offered, I went to the bank the next day and the mortgage guy seemed quite miffed that the president had sicced all these folks on him, giving them the idea that they could qualify when they probably couldn’t, and then they would be mad at him.
I said I was sorry to waste his time by *asking*, possibly I should go elsewhere to refinance? I’d hate to, it’s local, I like the teller ladies. But I said I didn’t appreciate the sadsack attitude on the topic in general. It’s yer job, dude!
Anyway I got a better deal, and paid off some other stuff leaving me with the same payment. I like having the local bank, I think it really helps when you know where *they* live.
Corner Stone
Nothing! So let’s see it!
TK-421
We’re seeing this in real time with MF Global, but let’s walk this through: even though we “know” that supervisors encouraged this behavior, the only way to know is to get the underlings to testify to that fact. That means you have to prosecute them first, and offer them immunity to them only after you’ve demonstrated you’re willing and able to throw them in jail for their crimes.
The people who “churned out fraudulent foreclosure documents, forged signatures, made up fake job titles and falsely notarized paperwork” need to face jail time. Period. I know some people will be uncomfortable with this because they were only following orders (/godwin’d), but this is the way the world works, people.
There’s no other way to get accountability for the people giving the orders unless and until the underlings see some consequences and start to turn on their bosses. And honestly, I don’t have much sympathy for the underlings anyway- they knew they were doing the wrong thing, and they did it anyway. Face the music, fuckers.
Ozymandias, King of Ants
@John Weiss:
This is snark, right? Because if you’re serious, you were either too young or your head was way too far up up your ass.
cmorenc
Our mortgage will be fully paid off in 8 more years, and our accumulated share of the equity is clear of the “water” by a stratospheric margin.
ONE BIG WORRY: It’s almost certain that the lender side of our mortgage has been hashed up through the derivative securitization mill, with Chase Mortgage “servicer” of the mortgage. I am whistling hard in the dark that eight years from now, whoever nominally holds the mortgage/trustee interest in our house will be able to deliver valid clean title. In theory, the derivative situation should only be a difficult mess for people struggling to pay and hold onto their homes (and perhaps for some of the lenders attempting to foreclose on them)…but I’m not 100% sure this is true. For example, the lender who was originally the title mortgagee was actually a broker who soon after closing quickly assigned the mortgage to some other entity…which I’m hoping is Chase, but I think it’s time to take a look in the county real estate records and find out for sure who it nominally is, because that’s who will have to be around to deliver a valid clear title 8 years from now.
cmorenc
@John Weiss:
This is EXACTLY the scenario I fear could eventually happen to us, which I outlined in a preceding post in this thread.
Corner Stone
Hey, I’ve got a peach of an idea! What’s wrong with having Holder assert that these banksters are due process, but not really judicial process?
Doesn’t something killing the future of tens of millions of American citizens qualify for national security?
Let’s send a few teams of guys with a van and some carpet in the back, snatch these motherfuckers, roll them up in the carpet and rendition their asses to someplace really fucking nasty.
Like maybe Iowa or Ohio.
muddy
@Corner Stone: Okay! I hope the carpet is for rolling them up, they don’t need any cushioning.
Ruckus
@Martin:
Ahhh the eternal optimist.
LevelB
You can’t use information obtained in a civil investigation in a criminal trial.
Svensker
Does anyone actually believe anyone except a few little folk will get punished for this crap? This is Abu GrabtheCash and any punishment is just for the proles. I would love to be proved wrong, of course.
Odie Hugh Manatee
“What is stopping the HUD officials from handing over their research to the DOJ so we can start sending these people to jail?”
Nah gunna ha pen. OK, maybe a few low level (read: not well connected) wiseguys might be fed to the dogs to distract and sate them, but the powerful banksters are going to walk. There’s NO WAY our politicians are going to allow their wealthy patrons to be subjected to the Law of the Commoners. No way at all. Money can’t buy you love but in America you can buy lots of politicians with it, even a whole political party!
With that purchase you can pretty much fuck anyone you want to, no love necessary.
dday
@TK-421:
Um, the HUD IG report includes interviews with numerous employees at these companies. That’s how they got this information. All the civil violations contained in them were released with the settlement, along with a half-dozen other whistleblower lawsuits from employees at the servicers.
JC, to your question, “What is stopping the HUD officials from handing over their research to the DOJ so we can start sending these people to jail?” … well, considering that they’ve been holding on to this report since at least last May, when Shahien Nasiripour first reported on it for the Huffington Post, I’m not holding my breath.
Mnemosyne
@dday:
IIRC, the settlement explicitly said that nothing in the settlement prevented the government from also filing criminal charges based on the actions in the settlement:
Did I read the language of the settlement wrong?
The Republic of Stupidity
Some folks may feel better calling it a ‘landmark settlement’ but $25BB doesn’t even come close to covering the havoc these farkers wreaked on the rest of us…
Shiiiiiiii’ite… $250BB prolly woudn’t be enough…
In China, they’d be taking them out, lining them up against a wall, and flat out shooting them by now…
Just saying…
TK-421
@dday:
Yeah, I get that you can’t really roll the underlings on foreclosure fraud to get at the higher executives. There’s probably a cute way to do it, and perhaps some state AGs will get a little bold, but for all intents and purposes this one is in the books and wow what a missed opportunity to get some real justice.
My point is that as we’re seeing with MF Global, it doesn’t appear that anyone in government has learned from these mistakes. A billion dollars was, quite literally, stolen. It’s not even disputed.
It is truly weird. If some guys from New Jersey with last names that end in vowels and gold chains around their necks organized a theft of a billion dollars, prosecutors would know exactly how to take them down. Same goes for guys with dark skin, and/or with accents. But because clean cut white boys from the right families and in nice suits stole a billion dollars, it’s all of a sudden so very confusing and very difficult and oh well I guess there’s nothing we can do.
Nathanael
“What is stopping the HUD officials from handing over their research to the DOJ so we can start sending these people to jail?”
I’m sure they *have* handed the research over. Under Bush, the DOJ was politicized. Obama decided to retain a bunch of the Bush appointees (why?) and then appointed Holder, whose job has been to make sure that nobody gets prosecuted for crimes committed during the Bush administration; obviously the order from the top is “let the bankers commit crimes”.
The problem is that the DOJ has a monopoly on federal prosecutions.
Actually, this isn’t technically true. If you are on a federal grand jury, and you can get a majority of the grand jury, you can indict anyone who committed a crime in your district (which are very large), regardless of what the prosecutors want. In fact you are obligated by your grand jury oath to investigate any crimes you become aware of (through the newspapers, etc.) and to issue indictments.
However, prosecutors and judges are allowed to lie to grand juries about their role and their duties. And they do so routinely. So effectively, unless we get a runaway grand jury (which I hope and pray for), the DOJ has the power to let criminals go free.
This is of course not an actual justice system. This problem needs to be fixed. In the UK, they have something called “private prosecutions”, where private citizens or organizations can run criminal prosecutions, which is used when the Crown Prosecutor’s office is refusing to do its job for whatever reason (corruption, laziness, incompetence).
Nathanael
@John Weiss:
You’re going to have to file a quiet title action, or claim title by adverse possession (if you’ve been there for 10 years). Unfortunately very few lawyers understand the procedures for clearing up clouded title. And it’s expensive. And a lot of the judges don’t understand the importance of it, either.
It also may help to get multiple signed statements witnessing your receipt of the un-notorized letter and perhaps file it at the county clerk’s office. Basically you’re going to have to build evidence of ownership the way people do when records are destroyed. Big, expensive pain in the neck.
FYI, regarding my previous comment: the rules are the same for state grand juries. So if you’re on one, and you know of foreclosure fraud in your district (much smaller districts for state grand juries. mind you), start investigating and indicting – it’s your duty.
dday
@Mnemosyne:
No, you didn’t read it wrong. I’m saying that HUD had this evidence – and they actually passed it on to DoJ, in the report it says explicitly “We provided our preliminary findings to DOJ for its assessment and determination on any potential liability issues” – for at least the last year, and probably for longer than that, and DoJ didn’t do a thing with it. That’s despite having a Financial Fraud Task Force in place to handle such issues.
Instead they used this evidence to force a settlement where banks can donate homes to charity – something they do all the time – and get credit for paying the penalty.
Let’s revisit this conversation in 5 years and assess how many bankers went to jail. The over/under is zero and I’m taking the under. Maybe the criminal indictments in Missouri and Nevada pan out and we get a couple of the mid-level managers at the document processing companies.
General Stuck (Bravo Nope Zero)
@dday:
I heard Chuck Grassley said around the same thing today, in response to the DOJ announcing record amounts recovered from whistleblower based fraud. Why don’t you folks over at FDL just link directly to the RNC, to save time.
General Stuck (Bravo Nope Zero)
You are aware that DOJ policy does not publicize investigation of individuals that is on going, and also a year, or two is not very long for building fraud cases, some of the most notoriously difficult to prosecute successfully.
Carl Nyberg
We live in a society where it’s understood that some people shouldn’t be prosecuted for crimes. And some things aren’t crimes if the victims are poor people.
God Bless America!
Mike S.
“What is stopping the HUD officials from handing over their research to the DOJ so we can start sending these people to jail?”
Nothing, Obama’s DoJ simply doesn’t want to investigate this kind of stuff.
Go read something by William K. Black, or Yves Smith and then realize what a fucking imbecile you are for even asking that question.
(Oh snap is that dday all over this thread already? yes, it is and he knows the score!)
Mike S.
@General Stuck (Bravo Nope Zero):
you are aware that DoJ has been asked publicly to comment on the status of the investigation and has had nothing to say?
you are aware of things called statues of limitations, and therefore the need for timely action?
you are aware that the Obama administration simply refuses to designate resources adequate to the task for these kinds of investigations time and time again?
good sir you are one trusting, gullible fool if you think Holder and crew are going to take any action on this. their record to this point is horrendous, why should the future be different in that regard? (especially since active prosecution of such matters would be both good policy and good politics!)
General Stuck (Bravo Nope Zero)
@Mike S.:
I am aware that is and has been for a long time their policy is to not comment on going investigations. If they were investigating you, would you want them blabbing publically they were, especially if you were innocent? Has nothing to do with being asked.
Yes, I am, and so is the DOJ. But they still have to investigate and get evidence enough to prosecute.
The mortgage mess is huge, and DOJ resources are limited, as they have always been. But your litmus and dday’s for putting top bank executives in prison is a piss poor litmus
to measure Obama’s record on this problem at this time. And you are a typical fucking firebagging moron that expects Obama to pamper your poutrage of expectation. I don’t know whether they will prosecute top execs, or not. But doing so is not as easy as emo prog clowns make it out to be. And Obama’s record will have nothing to do with the wankings of white privileged liberals like you, expecting him to heel to your sorry ass. Now GFY, and take the compromised dday with you back to FDL
RobinDC
Your such a hilarious pathetic fool Stuck. Either that or the status quo benefits you I guess. The only fucking moron here is you if you still believe no crimea were committed or nothing can be proved. This is pure rank corruption that sits squarely on the shoulders of your hero. Must be tough to deal with the fact that your hero president Obama is a huge criminal by virtue of aiding and abetting white collar criminals. Under his administration white collar crime has never been more prevalent thanks to his dojs de facto legalization of it. But ya its all poutrage.