Axelrod Is Wrong: Obama Must Protect American Families From Wall Street Fraud

by Zach Carter

AlterNet

If senior White House adviser David Axelrod’s comments this weekend are any indication, the Obama administration is woefully misreading the foreclosure fraud crisis currently gripping the U.S. economy. Axelrod refused to commit the administration to a national moratorium on foreclosures, and mischaracterized a massive, systematic fraud perpetrated by Wall Street banks as a set of unfortunate “mistakes.” This is not a minor scandal and it will not simply go away. President Barack Obama needs to stand up for the middle class and protect our economy from Wall Street theft. If he doesn’t, the economic and political price will be devastating.

The full transcript of Axelrod’s appearance on CBS’ Face the Nation with Bob Shieffer is here, but here are his key comments, emphasis mine:

“It’s bad for the housing market and it’s bad for these institutions which is why they’re scrambling now to– to go back through and– and– and through their documentation for all of this as they should. The President was concerned enough to veto a bill that came to him last Thursday, that would have unintentionally made it perhapseasier to make mistakes. . . . I’m not sure about a national moratorium because there are, in fact, valid foreclosures that– that– that probably should go forward. And where the documentation and paperwork is– is proper, but we are working closely with these institutions to make sure that they expedite the process of going back and reconstructing these and throwing out those that don’t work . . . . Our hope is that this moves rapidly and that this gets unwound very, very quickly.”

Let’s straighten some facts out first. Lenders aren’t just making “mistakes”—they’re fabricating documents, forging signatures and lying to judges in order to illegally throw people out of their homes and slap them with thousands of dollars in illegal fees. Consumer advocates were not worried that the bill Obama vetoed on Friday would make it easier for lenders to make “mistakes”—they were worried it would make it harder to expose rampant, systematic fraud committed by Wall Street banks against American families.

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Foreclosuregate

Dees Illustration

The Economic Collapse

If you work in the mortgage industry or for a title insurer, you might not want to make any plans for the next six months.  Foreclosuregate is about to explode.  It is being alleged that many prominent mortgage lenders have been using materially flawed paperwork to evict homeowners.  Apparently officials at quite a few of these firms have been signing thousands upon thousands of foreclosure documents without even looking at them.  In addition, it is being alleged that much of the documentation for these mortgages that are being foreclosed upon is either “improper” or is actually “missing”.  As lawyers start to smell blood in the water, lawsuits challenging these foreclosures have already started springing up from coast to coast.  In fact, some are already calling Foreclosuregate the biggest fraud in the history of the capital markets.  JPMorgan Chase, Ally Bank’s GMAC Mortgage and PNC Financial have all suspended foreclosures in the 23 U.S. states where foreclosures must be approved by a judge.  Bank of America has actually suspended foreclosures in all 50 states.  Now, law enforcement authorities from coast to coast are calling for investigations into this controversy and it could be years before this thing gets unraveled.


This thing just seems to escalate with each passing day.  It is being reported that the attorneys general of up to 40 U.S. states will be working together on a joint investigation into this foreclosure crisis.  Lawmakers in both houses of the U.S. Congress, including Nancy Pelosi and Christopher Dodd, have called for an investigation to begin on the national level.  U.S. Attorney General Eric Holder said last week that he is looking into the issue.  Things are certainly getting very serious out there.  Never before has there ever been such a national focus on foreclosure paperwork.

But apparently there are good reasons for such scrutiny….

*One GMAC Mortgage official admitted during a December 2009 deposition that his team of 13 people signed approximately 10,000 foreclosure documents a month without reading them.

*One Bank of America employee confessed during a Massachusetts bankruptcy case that she signed up to 8,000 foreclosure documents a month and typically did not look them over “because of the volume”.

But the “robo-signing” aspect of Foreclosuregate is just the tip of the iceberg.  Apparently there is a whole lot more going on than just a bunch of bad signatures.

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