Eric Holder launched the DOJ’s investigation into massive document fraud performed by mortgage servicers when the stench could no longer be ignored in 2010.
It was dubbed robo-signing, but that term is too warm and cuddly for us.
It is document fraud. Suborning perjury. They are creating false evidence that results in the illegal seizure of private property.
We have also uncovered a massive number of fraudulent signatures of dubious origin on “Satisfaction of Mortgages” recorded at registries across the USA. Attorneys tell us that these documents could be deemed invalid. Meaning, the lien is still against the property – even though the mortgage has been paid off.
Back to Holder…
Reuters today breaks the news that Attorney General Eric Holder and his top lieutenants at DOJ have a conflict of interest. (Which will not be news at all to TBP readers)
What’s the conflict?
Eric Holder and his top DOJ lieutenants are all alumnae of Covington & Burling, the white shoe law firm that represents MERS. In 2004, while Holder and his pals were at the firm, Covington & Burling issued a legal opinion justifying the MERS business model to the lending and title industries.
This legal opinion is posted on the MERSCORP website. It is also trotted out at all of their conferences and appears in their marketing materials. It is, quite simply, MERS “Get out of jail free” card.
MERS, of course, is the energizer bunny for massive MBS fraud. The MERS electronic recording system (which it turns out did not record at all) was used to ramp up the number of mortgages which would create the MBS (only they didn’t).
MERS violates 400 years of settled property law. Judges across the USA are ruling MERS assignments are illegal and ruling against the banks in foreclosure and bankruptcy cases.
MERS was the brainchild of Anthony Mozila. Need I say more?
Our research uncovers banks resistance to signing onto the MERS system in 1997-2000. The GSE’s Fannie, Freddie and Ginnie, along with the title companies, made a major push for getting MERS adopted as the primary recording system.
That’s why the Covington & Burling legal opinion is so important. It justified MERS by-passing the land recording system which is paper-based and totally transparent, with an electronic system that is secret. It was and remains a very important document that is used by banks, financial institutions to by-pass 400 years of settled property law.
Holder and his top lieutenants should have recused themselves from the investigation.
But of course, they didn’t do that, did they?
Instead, Holder orchestrated a cover-up. He is the principal driver behind the push for 50 states Attorneys General to give lenders/servicers immunity in exchange for a reported $25 billion settlement.
A number of the Attorneys General are resisting (Massachusetts, NY, Illinois, California, Nevada, and Delaware).
Others states, like New Jersey, appear willing to settle.
The states, however, will settle at their peril. We calculated NJ taxpayers are owed $87 million in unpaid recording fees and $90 billion in transfer taxes.
New Jersey’s share of the $25 billion pales in comparison to the amount that is owed. We, the people want our money back. All of it. Our message to Governor Christie and the new Attorney General is, “do not think about settling, New Jersey.”
Question to the state Attorneys General: Did Eric Holder and his pals tell you about their association with MERS? Did they discuss how their Covington & Burling pensions are affected by the settlement? Clearly the revenue derived from MERS account affects their future compensation, does it not? What is Covington & Burling’s legal exposure to crafting the MERS legal opinion? Will the firm be sued by state Attorneys General? Will they be sued by homeowners? If so, how does that affect their pensions and future employment prospects?
It’s obvious that Holder and his DOJ lieutenants had a lot to lose if MERS and its charter members (which were all cited for massive document fraud by OCC, SEC, and Senate) were to be held criminally liable for their acts.
So, what did they do?
Well, the DOJ/FBI was directed to partner with the Mortgage Banking Association (MBA) on the 2010 mortgage fraud investigation. The MBA is the trade association for the banks that are under “investigation” for committing massive fraud.
So here’s where we move from “conflict of interest” to “obstruction of justice.”
The FBI and DOJ created a definition of mortgage fraud that does NOT include the bad acts of the banks. No Siree. The definition focuses on homeowners and flim-flam artists who commit fraud AGAINST THE BANKS.
This is the reason why not one single senior executive from the TBTF banks that have destroyed American property records, clouded title on 60-100 million properties and committed massive document fraud have not been investigated. Or subsequently tried and convicted of their crimes.
Many in law enforcement (retired FBI agents and Federal Prosecutors) have told us they believe Holder is running down the clock on the statute of limitations.
The window on charging top executives who have created, implemented and covered-up MBS and foreclosure fraud is almost closed. The people who stole $11 trillion from MBS investors and $6 trillion from homeowners are about to get away with the largest heist in world history.
Eric Holder must go.
Insight: Top Justice officials connected to mortgage banks
Wed, Jan 11 2012
By Scot J. Paltrow
Fri Jan 20, 2012 9:31am EST
(Reuters) – U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.
The firm, Covington & Burling, is one of Washington’s biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.
Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmaler said Holder and Breuer had complied fully with conflict of interest regulations, but she declined to say if they had recused themselves from any matters related to the former clients.
Reuters reported in December that under Holder and Breuer, the Justice Department hasn’t brought any criminal cases against big banks or other companies involved in mortgage servicing, even though copious evidence has surfaced of apparent criminal violations in foreclosure cases.
The evidence, including records from federal and state courts and local clerks’ offices around the country, shows widespread forgery, perjury, obstruction of justice, and illegal foreclosures on the homes of thousands of active-duty military personnel.
In recent weeks the Justice Department has come under renewed pressure from members of Congress, state and local officials and homeowners’ lawyers to open a wide-ranging criminal investigation of mortgage servicers, the biggest of which have been Covington clients. So far Justice officials haven’t responded publicly to any of the requests.
While Holder and Breuer were partners at Covington, the firm’s clients included the four largest U.S. banks – Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co – as well as at least one other bank that is among the 10 largest mortgage servicers.
DEFENDER OF FREDDIE
Servicers perform routine mortgage maintenance tasks, including filing foreclosures, on behalf of mortgage owners, usually groups of investors who bought mortgage-backed securities.
Covington represented Freddie Mac, one of the nation’s biggest issuers of mortgage backed securities, in enforcement investigations by federal financial regulators.
A particular concern by those pressing for an investigation is Covington’s involvement with Virginia-based MERS Corp, which runs a vast computerized registry of mortgages. Little known before the mortgage crisis hit, MERS, which stands for Mortgage Electronic Registration Systems, has been at the center of complaints about false or erroneous mortgage documents.
Court records show that Covington, in the late 1990s, provided legal opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac, Bank of America, JP Morgan Chase and several other large banks. It was meant to speed up registration and transfers of mortgages. By 2010, MERS claimed to own about half of all mortgages in the U.S. — roughly 60 million loans.
But evidence in numerous state and federal court cases around the country has shown that MERS authorized thousands of bank employees to sign their names as MERS officials. The banks allegedly drew up fake mortgage assignments, making it appear falsely that they had standing to file foreclosures, and then had their own employees sign the documents as MERS “vice presidents” or “assistant secretaries.”
Covington in 2004 also wrote a crucial opinion letter commissioned by MERS, providing legal justification for its electronic registry. MERS spokeswoman Karmela Lejarde declined to comment on Covington legal work done for MERS.
It isn’t known to what extent if any Covington has continued to represent the banks and other mortgage firms since Holder and Breuer left. Covington declined to respond to questions from Reuters. A Covington spokeswoman said the firm had no comment.
Several lawyers for homeowners have said that even if Holder and Breuer haven’t violated any ethics rules, their ties to Covington create an impression of bias toward the firms’ clients, especially in the absence of any prosecutions by the Justice Department.
O. Max Gardner III, a lawyer who trains other attorneys to represent homeowners in bankruptcy court foreclosure actions, said he attributes the Justice Department’s reluctance to prosecute the banks or their executives to the Obama White House’s view that it might harm the economy.
But he said that the background of Holder and Breuer at Covington — and their failure to act on foreclosure fraud or publicly recuse themselves — “doesn’t pass the smell test.”
Federal ethics regulations generally require new government officials to recuse themselves for one year from involvement in matters involving clients they personally had represented at their former law firms.
President Obama imposed additional restrictions on appointees that essentially extended the ban to two years. For Holder, that ban would have expired in February 2011, and in April for Breuer. Rules also require officials to avoid creating the appearance of a conflict.
Schmaler, the Justice Department spokeswoman, said in an e-mail that “The Attorney General and Assistant Attorney General Breuer have conformed with all financial, legal and ethical obligations under law as well as additional ethical standards set by the Obama Administration.”
She said they “routinely consult” the department’s ethics officials for guidance. Without offering specifics, Schmaler said they “have recused themselves from matters as required by the law.”
Senior government officials often move to big Washington law firms, and lawyers from those firms often move into government posts. But records show that in recent years the traffic between the Justice Department and Covington & Burling has been particularly heavy. In 2010, Holder’s deputy chief of staff, John Garland, returned to Covington, as did Steven Fagell, who was Breuer’s deputy chief of staff in the criminal division.
The firm has on its web site a page listing its attorneys who are former federal government officials. Covington lists 22 from the Justice Department, and 12 from U.S. Attorneys offices, the Justice Department’s local federal prosecutors’ offices around the country.
As Reuters reported in 2011, public records show large numbers of mortgage promissory notes with apparently forged endorsements that were submitted as evidence to courts.
There also is evidence of almost routine manufacturing of false mortgage assignments, documents that transfer ownership of mortgages between banks or to groups of investors. In foreclosure actions in courts mortgage assignments are required to show that a bank has the legal right to foreclose.
In an interview in late 2011, Raymond Brescia, a visiting professor at Yale Law School who has written about foreclosure practices said, “I think it’s difficult to find a fraud of this size on the U.S. court system in U.S. history.”
Holder has resisted calls for a criminal investigation since October 2010, when evidence of widespread “robo-signing” first surfaced. That involved mortgage servicer employees falsely signing and swearing to massive numbers of affidavits and other foreclosure documents that they had never read or checked for accuracy.
Recent calls for a wide-ranging criminal investigation of the mortgage servicing industry have come from members of Congress, including Senator Maria Cantwell, D-Wash., state officials, and county clerks. In recent months clerks from around the country have examined mortgage and foreclosure records filed with them and reported finding high percentages of apparently fraudulent documents.
On Wednesday, John O’Brien Jr., register of deeds in Salem, Mass., announced that he had sent 31,897 allegedly fraudulent foreclosure-related documents to Holder. O’Brien said he asked for a criminal investigation of servicers and their law firms that had filed the documents because they “show a pattern of fraud,” forgery and false notarizations.
(Reporting By Scot J. Paltrow, editing by Blake Morrison)