Recently, I had the opportunity to listen to arguments pertaining to a home foreclosure lawsuit before the Montana Supreme Court. The mortgage program, and eventual foreclosures, is a scheme meticulously planned by the New York banks.
This lawsuit addressed the fraudulent issue of the Mortgage Electronic Registration Systems, known as MERS, a corporation created by the banks, which separates the deed from the note. When the banks file mortgage papers at the courthouse, MERS is eventually named as the owner, or beneficiary, and when foreclosing on a mortgage this has been determined to be illegal by numerous courts around the country. Courts have said, “the mortgage can have no separate existence. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”
We now wait for the Montana decision.
There is, however, another big issue in the foreclosure process that was not addressed in this suit. That is the use of robo-signers, which refers to forging executive signatures on documents by individuals and swearing to their accuracy. This fabrication of mortgage documents by banks in foreclosures presents a question: Why do banks have to resort to this illegal procedure?
In a newly unsealed lawsuit, which banks settled in 2012 for $95 million, the reason stated is that “banks resorted to fake documents because they could not legally establish true ownership of the loans.” So the banks settled. That means that millions of mortgages still lack a legitimate chain of ownership.
As a result of both MERS and robo-signers being illegal, the government decided last year to investigate the problem further. The banks agreed to “settle” for about $10 billion. As I stated in my April guest column: Banks were only required to provide a mere pittance for the illegal foreclosures when considering the trillions of dollars that they made. So 4.2 million homeowners illegally foreclosed on in 2009 and 2010 will get, or have gotten, “compensation” with payments as low as a few hundred dollars for some victims.
Today, the Department of Justice is again “talking” with banks. One is JPMorgan Chase. The Department of Housing and Urban Development briefly discussed the possibility of striking a wide-ranging settlement to conclude many of the looming mortgage investigations from federal authorities. It is interesting to note that in the last few years, JPMorgan has shelled out about $11 billion in fines and spent around $16 billion in legal fees. And they are also in negotiations with Attorney General Eric Holder about possibly another $11 billion settlement to end criminal and civil charges. Those figures are merely a slap on the wrist considering the mega-trillions that they made through the home mortgages, particularly when you consider that six of the big banks paid $38 billion in bonuses last year. (Yes, billions! Is it greed?)
This is just “the cost of doing business” for these mega-banks. And that’s the rub. Paying off regulators and settling criminal charges is only supposed to be the “cost of doing business” for criminals. When the FBI went after the Mafia, the stated goal was putting them out of business. There is no specific goal when it comes to cracking down on Wall Street. (Too big to fail?) And once JPMorgan and Holder finish horse trading over the size of JPMorgan’s “settlement,” it will continue addressing federal probes in its debt collection practices.
Let’s face it: as long as JPMorgan’s income exceeds its legal fees, they have no economic incentive to stop pushing the law at every opportunity.
There is no justice being served. All we have are huge payoffs. It’s just theater serving to prove what Main Street has suspected all along: they’re getting screwed by bankers and politicians.
JPMorgan, and all the other big banks, have a “fortress balance sheet.“ “Its walls are made of lawyers, and its moat is made of burning money.”
“Humpty Dumpty sat on a wall. Humpty dumpty had a great fall. All the King’s horses and all the King’s men couldn’t put humpty dumpty together again.” Today we are Humpty Dumpty and we are taking the fall. The king is the Federal Reserve “feeding” its men – the big bankers.
Fred Carl of Missoula is a former state senator.