Levitin Kills It!

Here’s a good post on Adam Levitin’s testimony at today’s hearing on robo-signers, chain of title problems, etc.

David Dayen’s full piece below: http://foreclosureblues.wordpress.com/2010/11/18/levitin-addresses-elephant-in-the-room-regulators-don%e2%80%99t-want-to-fix-the-foreclosure-crisis/

Georgetown U.’s Adam Levitin has become something of a rock star during the foreclosure fraud crisis. He had some of the best and most biting commentary in the Senate Banking Committee hearings on the issue, and he also appeared today at the House Financial Services Committee hearings. And under questioning from Rep. Brad Miller (D-NC), he let loose, and said what everyone has been thinking about the foreclosure crisis.

First off, he lamented the fact that we have been holding hearings like this since 2007. “Every year we have another set of hearings, and you can add 2 million foreclosures” to the bottom line. Nothing gets fixed, despite all kinds of documented evidence that the banks and servicers have committed fraud. Levitin’s position is that the servicers should be banned from the loan modification business entirely, because they don’t have any interest in it except as a profit-maximization scheme, and they have massive conflicts of interest that cut against doing right by the borrowers (and even the investors for whom they work).

But this was the key moment. Levitin said that we don’t have the full data sets from the servicers, or any comprehensive data to see whether there is a full-on crisis of unclear title and improper mortgage assignment. In other words, we don’t quite know the full extent of the problem. Levitin said, essentially, “The federal regulators don’t want to get info from servicers, because then they’d have to do something about it.” They don’t want to recognize the scope of the problem because it would require them to act.

And Levitin in particular singled out the Treasury Department. “The prime directive coming out of Treasury is ‘protect the banks’ and don’t force them to recognize their losses.” That says it in a nutshell, and it was said in open testimony in Congress.

Congressional Hearing on Robo-Signing, Chain of Title, Loss Mitigation and Other Issues in Mortgage Servicing

C-SPAN3 temporarily cut away from the hearing to go to Rangel’s sanctions but the hearing is still on here.

The participants (R.K. Arnold of MERS and Professor Adam Levitin have been busy this week):

Robo-Signing, Chain of Title, Loss Mitigation and Other Issues in Mortgage Servicing

Date: November 18, 2010

Time: 10:00AM

Location: 2128 Rayburn House Office Building

Witness List & Prepared Testimony:

Panel One:

Panel Two:

Panel Three:

WSJ Reports that FDIC Will Conduct Approximately 50 Criminal Investigations of Failed Bank CEOs, Directors, Employees

 

BUSINESS

 

 

NOVEMBER 17, 2010, 7:54 A.M. ET 

U.S. Sets 50 Bank Probes

FDIC Steps Up Investigations at Failed Lenders; ‘These NumbersWill Increase’

By JEAN EAGLESHAM

 

  

 

The Federal Deposit Insurance Corp. is conducting about 50 criminal investigations of former executives, directors and employees at U.S. banks that have failed since the start of the financial crisis.The agency responsible for dealing with bank failures is stepping up its effort to punish alleged recklessness, fraud and other criminal behavior, as U.S. officials did in the wake of the savings-and-loan crisis a generation ago. More than 300 banks and savings institutions have failed since the start of 2008, but just a fewhave led to criminal charges being filed against bank officials. In an interview, Fred W. Gibson, deputy inspector general at the FDIC, which works with the Federal Bureau of Investigation to investigate crime at financial institutions, said the probes involve failed banks of all sizes in cities across the U.S. The FDIC is also ramping up civil claims to recover money from former bankers at busted lenders. He declined to identify any of the people or banks under investigation.