comments_image Comments

5 Mega-Banks May Have Defrauded Homeowners -- Will the Justice Department Actually Prosecute?

The nation's five largest mortgage companies are being accused of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans.

Continued from previous page


AMY GOODMAN: Talk about Bank of America, in particular, Shahien.

SHAHIEN NASIRIPOUR: So, Bank of America, back last autumn, they halted all home seizures in judicial foreclosure states. These are states where you have to actually go to court to repossess someone’s homes. And they kind of expanded their moratorium because there were revelations that they employ so-called robo-signers and they used faulty and defective documents. When you go to seize someone’s home, essentially you’ve got to cross all your T’s and dot all your I’s. You have to swear before the court that you’ve reviewed all the documents, all the documents are truthful, you’ve gone over everything. And they allegedly didn’t do so, and they didn’t do so on a mass scale. And so, they halted home seizures. About 10 days later, they start them up, and they say that they had fixed everything and that everything was on the up and up. Well, the HUD IG says that it’s actually not true. They didn’t correct all their problems. They still had deficiencies. Yet they still went through and claimed that everything was OK. That’s one thing.

The second thing is, BofA is one of two firms that allegedly did not cooperate with investigators, which—you know, on one hand, firms like BofA, Wells Fargo, Citi, JPMorgan Chase, they’re subject to thousands of lawsuits and thousands—God knows how many regulatory investigations. So it’s interesting that while they make bank employees available, they make documents available, they apparently chose not to cooperate with this one. That’s something I’m still trying to dig into. I’m actually not clear on how they didn’t cooperate. A lot of the details really aren’t clear, because these are confidential audits.

AMY GOODMAN: The State of New York has also launched an investigation into Bank of America, Goldman Sachs and Morgan Stanley over the mortgage security operations at the three banks.

SHAHIEN NASIRIPOUR: Correct. So, the New York Attorney General, Eric Schneiderman, he’s empowered with the Martin Act, which is this law that’s actually kind of amazing, because the New York Attorney General can really investigate whatever he wants with respect to Wall Street and with respect to securities. He’s not hamstrung like other states who don’t have these—they don’t have these statutes on the books. And so, he can look at pretty much anything he wants. And right now he’s focused on mortgages. So he’s looking at essentially predatory lending, how these loans were bundled and packaged into securities, whether they followed the law, whether they deceived investors—the whole gamut.

AMY GOODMAN: One last question, Shahien, and that’s about banks foreclosing illegally on active-duty soldiers.


AMY GOODMAN: The significance of this? A review of about 2,000 loans that experienced foreclosure, what, about 50 active-duty soldiers, their homes were foreclosed on?

SHAHIEN NASIRIPOUR: Well, that’s what we know of. That’s based on—government regulators looked at 2,800 loans. They looked at 14 mortgage firms.

AMY GOODMAN: We have 10 seconds.

SHAHIEN NASIRIPOUR: OK. Out of two of those 14, they found almost 50. So who knows how many actually were illegally foreclosed on?

AMY GOODMAN: Well, Shahien Nasiripour is senior business reporter for the Huffington Post. We’ll link to his articles there.

Amy Goodman is the host of the nationally syndicated radio news program, Democracy Now! .