AGs Target Trustees in Mortgage Bundling
June 13th, 2011
Even if the banks do reach a settlement on the foreclosure fiasco that rocked the lending industry last year as robo-signer processes came to light, their problems may not be over. Two state attorneys general have begun investigating how Wall Street bundled loans into securities, citing a concern that the bundles were not properly documented and valid[1]. Eric T. Schneiderman (NY) and Joseph R. Biden III (DE) are focusing on big bank trustees who oversee securities for investors and have requested information from two firms already, Bank of New York Mellon and Deutsche Bank. The AGs say that as administrators, the firms were “required to ensure that all documentation was proper and complete,” but question whether “all the necessary documents were delivered to the trusts and properly administered by them.” If the firms are found to be in error, they, like the lenders involved in the robo-signer fiasco, could be subject to costly litigation that would not be resolved with the bank settlement currently in the works as part of the 50-state AG foreclosure probe.
The investigation began with Schneiderman’s questioning of Bank of America’s mortgage securities and associated foreclosures[2]. Analysts call the investigation potentially “explosive” as entire bundles could be declared fraudulent and investors could force lenders and trustees to buy them back.
Do you think that the chain of corruption and these investigations and lawsuits will ever end? If justice is to be served, should they?
Thank you for reading REJournalOnline!
Let us know what you think about these myriad probes, investigations and settlements in the space below.
[1] http://www.nytimes.com/2011/06/13/business/13mortgage.html
[2] http://www.huffingtonpost.com/2011/06/13/bank-of-america-mortgage-investigation-schneiderman_n_875681.html
June 13th, 2011 at 8:59 AM
These investigations need to keep on until bankers and stock brokers are at least barred from any further employment in any fiduciary capacity and at best put to work delivering charitable contributions (other than money, e.g., used clothing, donated food, job skills) to unemployed persons until the U.S. economy has added 10 million jobs + 250,000 jobs/month for each month until the unemployment rate falls to 5%. (Yes, it would feel good to lock them up and throw away the key, but why should we continue to subsidize them? Let the punishment fit the crime.)
June 13th, 2011 at 9:39 AM
Why has no bank or Wall St exec been sent to jail? The evidence is pervasive that they have engaged in fraudulent procedures and have issued fraudulent mortgages. They have also knowingly sold securities that they knew would default. What if you or I had engaged in such behavior?, would we still be on the street?