Nevada Attorney General Joins Schneiderman in Fighting Bank of America's Foreclosure Fraud
It's a daily saga by now: the updates on whether or not Bank of America (and the rest of the banking industry that continues to profit off shady mortgage practices) will face any penalties for helping create the financial crisis.
We've followed Eric Schneiderman, New York's attorney general, in his fight against settlements that would give B of A and other banks a sweetheart deal--and close the door on future charges.
Now Nevada's attorney general, Catherine Cortez Masto, has entered the fray in a big way. She's filed a lawsuit against B of A, accusing them of breaching a 2008 settlement in which they promised to modify up to 400,000 mortgages (that they now owned as a result of purchasing toxic lender Countrywide) at a cost of up to $8.4 billion. They were supposed to stop foreclosing, refinance and reduce principal.
Shockingly, Masto's suit argues that they did almost none of that. She argues instead that they raised interest rates when they should've lowered them, failed to modify mortgages that met the qualifications, improperly foreclosed on homeowners who had requested modifications, and much, much more.
David Dayen at FireDogLake explains the kicker:
Masto didn’t stop there. She also pulled out a bazooka. She accused BofA of failure to properly securitize mortgages, breaking the chain of title and nullifying their standing to foreclose. This is from the amended complaint:
Bank of America misrepresented, both in communications with Nevada consumers and in documents they recorded and filed, that they had authority to foreclose upon consumers’ homes as servicer for the trusts that held these mortgages. Defendants knew (and were on notice) that they had never properly transferred [text redacted] these mortgage to those trusts, failing to deliver properly endorsed or assigned mortgage notes as required by the relevant legal contracts and state law. Because the trusts never became holders of these mortgages, Defendants lacked authority to collect or foreclose on their behalf and never should have represented they could.
We know that Countrywide didn’t convey the mortgage notes properly to the trust, their own officials testified to that in Countrywide v. Kemp (which is quoted in the complaint). Masto joins Eric Schneiderman in blowing the whistle on this corrupt securitization enterprise.
Dayen also argues:
Masto’s lawsuit is as much about the current settlement talks as it is about the 2008 Countrywide settlement. She is saying, in no uncertain terms, that you simply cannot trust the banks to actually abide by settlement terms.
And MoveOn.org has a new petition out, calling for support of Schneiderman in those current settlement talks. "No More Sweetheart Deals for Wall Street," they're saying.
One has to wonder if the ever-growing list of complainants against Bank of America (and by inference, most of the banking industry) is making Warren Buffett rethink his investment.