The Cost Of Attorney General Silence: How Bank Of America Made Sure There Would Be No Surprises In The Robosigning Settlement

Tyler Durden's picture

For those needing yet another reminder of how in America the incestuous conflicts of interest between the various branches of government and Wall Street run to the very top, here is Time with an article highlighting yet another example of impropriety. Today's case focuses on Iowa’s Democratic Attorney General Tom Miller, who at least superficially took the noble lead on the investigation by all 50 state attorneys general into the “robo-signing” foreclosure scandal. Alas, one look below the surface reveals that we may be days away from a very ignoble and very BAC-friendly settlement, courtesy of a few backroom "arrangements" brought to you by none other than Bank of America's petty cash account.

From Time:

Last fall, just after he made the announcement that he would look into the foreclosure mess, contributions to Miller’s campaign coffers for November’s election soared, thanks in large part to out-of-state lawyers who make a living representing big banks, a new report from the National Institute for Money in State Politics finds. “Nearly half of the money Miller raised in 2010,” NIMSP reports, “was donated after the October 13 announcement that he would be coordinating the 50-state attorneys general investigation.”

Two Miller contributors have become directly involved in defending the banks in the probe. One, Meyer Koplow of Wachtell Lipton in New York, gave Miller $5,000 and is representing Bank of America in direct negotiations with Miller, the attorney general tells TIME. Another, Elizabeth McCaul of Promontory Financial Group, gave Miller $10,000 and is consulting Bank of America in the negotiations, Miller says. Bank of America was one of the first and most prominent institutions accused in the foreclosure investigation. It gave more than $80,000 to the Democratic Attorney Generals Association, which spent more than $200,000 on Miller’s campaign, Miller says.

That this "revalation" comes at such a time is unpleasant for a process that is now sure to be mired in shades of political corruption and backroom dealing, especially if the settlement outcome is one that will be seen as favorable toward Bank of America.

The NIMSP report and revelations of campaign contributions by those working for Bank of America come at a sensitive moment, as Miller is in the thick of far-reaching negotiations with the banks. Though the case started as an investigation into robo-signing, it has broadened. The talks are aimed at a settlement that could set the terms by which banks service current and future home loans, and determine how they foreclose on properties. That could complement, or supercede, a settlement between banks and federal regulators reached earlier this year.

Talks over monetary aspects of a potential settlement between the AGs and the banks are just getting under way. New rules for banks writing down mortgage principal and the establishment of a bank-paid fund to help with loan modification are on the table. Some reports have potential bank payments reaching $20 billion but sources on both sides suggest that number is high. The breadth of the negotiations has caused seven Republican attorneys general to split with the 43 other AGs.

Of course, there always is another side to the story:

In early March, American Banker published a 27-page term sheet
that Miller and the other attorneys general had presented to the banks
in the talks. “We’ve had negotiations and have agreement on some of the
terms but no overall agreement,” Miller says.

Miller objects strongly to the NIMSP report. “It is extremely false
and misleading,” Miller says. He disputes the report’s assertion that
many of his campaign contributors have a “vested interest in the final
terms of the settlement.” Other than Koplow and McCaul, none of the
other lawyers named as campaign contributors in the report are involved
in the case and none has an interest in the settlement, Miller says.

Well as long as it is just two...Alas the ongoing "emergence" of these kinds of allegations will only further solidify the general public's perception that there are two sets of rules in America: one for those who can bribe the judicial branch to get the desired outcome, and one for everyone else. By now, hopefully, this should not be news to anyone.

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traderjoe's picture

Banana Republic, Bitchez!*

* for thatthingcanfly

Careless Whisper's picture

not yet traderjoe. i smell a rat with this story. the first red flag is that it appears in time magazine, which you all know is controlled media. so i followed the link to the actual report they were talking about and found this:

This publication was made possible by grants from:

Ford Foundation
Foundation to Promote Open Society
The Pew Charitable Trusts
Rockefeller Brothers Fund
Sunlight Foundation

My take on this story? The Iowa Attorney General isn't giving the Banks enough and they're throwing him under the bus. He wanted debt forgiveness included the in plan and that was the deal breaker so now they're screwing him over.

This is an assault on states rights, in disguise.

chunga's picture

There will be no sweeping fixes. Each and every individual case needs to be litigated on it's own merits with expertise.

Moll vs. MERS, et al

We need Fight Club Lawyers who possess the skill and are not afraid to battle TBTF.

MachoMan's picture

I'm not afraid to...  the problem is most of the people who default on mortgages are broke and can't afford an attorney...  despite not having to pay for a home.  The first person that walks in the door with a retainer is getting represented... 

I also perform quite a few foreclosures, but those are typically only on local bank owned properties and, further, even though I'm in a non-judicial state, they're all in front of the court.  In other words, you can also help the process by ensuring that the law is complied with on the foreclosing side.  In the end, the market needs to clear...  and there is a mechanism to do so, presuming the paperwork is in order.  It doesn't help anyone to have a foreclosure decree set aside...  do it right the first time and sleep easy.

The foreclosure mills have long been the scourge of the legal community...  but now I think it's finally appropriate to bar the doors on many of them.  Too bad AGs (and often times ethics committees) have no balls.

chunga's picture

"I'm not afraid to..."

To be a Fight Club Lawyer you must be fearless. Your foes will be the TBTF crowd. I've linked the Moll case enough to be accused of trolling. The reason for that is I believe it will go beyond Ibanez/Larace. In Moll only one court remains. I'll go out on a limb and predict a settlement will take place that will include a 50,000 page non-disclosure agreement before  being presented to The Nine Judges.

Altruism is great and all but does not keep the lights on and the point of having a client base without much money is well taken. Inching out a little further on that limb I suggest that there is a dynamic in play that is the inverse of that which created the bubble. TPTB see it. Foreclosure defense is a very technical and nuanced area of practice. I actually hate the term "foreclosure defense" and prefer "foreclosure offense".

Moll is the tip of the iceberg and will set precedent. As long as I'm allowed I will continue to provide updates on Moll and other similarly effective litigation. To win, it must be proved that someones property rights have been violated. A violation can not exist without a violator. The violator should keep the lights on.

A poster below mentioned Dylan Ratigan as one of the few in the media who have taken this head on. I'm in the process now of arranging an interview with the architect of Moll. All I can say is it's about to get exciting.

I'm not one bit ashamed to say I am the volunteer administrator at the Foreclosure Hamlet in fact quite the opposite. It's theme is warm and friendly and it's goal is "Supporting, Informing & Connecting People in Foreclosure".

Due to time constraints we've yet to really build out the site below but once we do we're going to get rowdy. Not with rhetoric or moral/social imperatives. There is only one way to prove fraud...and that is to prove fraud. At this moment industrial Unix boxes, bolted firmly to court record servers are eating data and they never got tired.

If you are committed to becoming a Fight Club Lawyer join us. Just remember what you said: "I'm not afraid to..". It is a very unfriendly, hostile environment. A lot of money will be made at the expense of the above mentioned "violators". Funny thing is...we don't give a fuck about the money.

Foreclosure Fraud – Economic Injustice Examined No, you're not losing your mind, they're stealing your money…

Happy Easter to All.

chumbawamba's picture

Well, I hope you guys are successful in this pursuit and I am certainly rooting for you, but quite frankly I'm not stockpiling all these rounds for target shooting.  I'm waiting to see how this all shakes out and if the people who started this mess are still standing at the end then they will make ideal lead catchers.

It is obvious to me that this is where we're heading.  None of these motherfuckers wants to take the hit, so just like in school when teacher tells the offending student to come to the front of the class and admit their guilt or else the whole class will suffer, I think the whole of the bankster class is going to suffer the consequences.

There was an article on Zero Hedge where some writer put out a warning to the putrid banksters: come forward and admit your guilt now, before it comes to violence.  That was about a year and a half back, and so far not only have none of them come forward but they've simply resumed the party like the cops never showed to break it up.

And they were able to get away with it because of the government that shielded them, and the lawyers that perfected the crime by putting some legal disclaimers on the whole activity.

Lots and lots and lots of lead catchers.

ALL of you sons of bitches--bankers, lawyers and politicians--had better fess up, now.  Anyone who still hasn't confessed to their sins after this jump will be valid targets for elimination.  It is time to cull the herd.

I am Chumbawamba.

chumbawamba's picture

I just had to try to skip through all the bullshit previews and other crap the studios try to make you watch on a DVD before you are allowed to view what you paid for in the first place.  It reminded me that the current Hollywood establishment and American media in general is also complicit.

So all of you fuckers better start pleading for mercy as well, because I'm counting your sins by the seconds of useless crap you barrage me with when all I want to do is watch a fucking movie.

I am Chumbawamba.

chunga's picture

I'm hopeful it won't come down to that. Moll is like a blueprint. It's elements need to be super-imposed over the governing laws in all 50 states and adapted. It is hard work but can be done. Here is another one that is all jammed. With so much at stake defendants counsel will not be cream-puffs.

They will have deep pockets.

In the ruling I link below the JPMorgue counsel knew he was toast on about page two of the eight page transcript. The judge dared him to go Federal.

Diana vs. WAMU

This is the current state of the Law in RI as of right now. JP Morgan cannot foreclose in RI without a written assignment from FDIC. Was appealed to Supreme Court a month ago. Appeal dismissed. Filed Motion to Reconsider, Motion for Relief Denied based on Law of the Case. Take your medicine banksters....

MachoMan's picture

In the end, the cause is noble, but the result will be the same.  So long as the note exists, the debtor(s) are subject to judgments (recourse) and, thus, foreclosure.  Essentially, fighting the issue is just going to make foreclosure that much more expensive for the parties attempting to foreclose.  I see only two probable outcomes: (a) the system fails, property ownership becomes property ownershipish, and we end up living in whatever home is closest to our food source...  regardless of whether or not we have the previous owner(s)' permission and, eventually, some form of adverse possession takes hold and clears the title (whether practical or court imposed); or (b) the system continues, the note remains a liability, and the homes are eventually returned to the true holder, who will have an agreement with the entire chain of assignment as to how to split any proceeds.

In the end, a defaulting debtor does not make a good sob story...  no sympathy will come from the court...  the only hope defaulting homeowners have is for the foreclosing party to piss off the court so much (fraud), the court throws out their foreclosure decree and issues slaps on their wrists...  which leaves the real holder in limbo...  potentially in perpetuity (more free living).  But a judge of general jurisdiction is not going to lose an instant of sleep over taking a home from someone who did not make their payments for a few years while still getting to live in the home.  This is why defaulting debtors do not make good plaintiffs...  all of the issues out there are to either prevent a foreclosure or to overturn a foreclosure decree...  Prospectively, all the foreclosure plaintiffs will need to be CERTAIN they're the real holders...  and there is no way to fix the problem without creating another... 

I personally think the fairest thing to do is require someone in the chain of assignment to initiate a declaratory action to determine the real holder...  this will require all the chain of assignment to come to the table...  the court decides who the real holder is and that sets up binding precedent to initiate foreclosure that the defaulting debtor cannot attack...  the foreclosure occurs and the proceeds are split as to how the court decides or the chain of assignment agrees among themselves...  the property clears, someone takes a haircut that should take a haircut (putbacks + agreement), and prospective home purchasers/savers prevail. 

chunga's picture

This thread may have died on the vine but you bring up a good point quoted below:

"I personally think the fairest thing to do is require someone in the chain of assignment to initiate a declaratory action to determine the real holder... this will require all the chain of assignment to come to the table... the court decides who the real holder is and that sets up binding precedent to initiate foreclosure that the defaulting debtor cannot attack..."

As I will illustrate in a motion that is in draft form right now the Defendants cannot (or refuse to) agree amongst themselves which party is the true holder -- it is hoped that the court will act as trier of fact. This reduces the defendants exposure to counter claims and is done deliberately for that very same reason.

Once filed I'll throw it out will detail the very real and compensable exposure I mention above in intricate detail.

It's not called "Fight Club" for nothing...

MachoMan's picture

Right.  If determining the true holder also means admitting to securities violations or, at the very least, subjecting yourself (and/or successors) to "putbacks", then the best course of action is probably to kick the can.  In a scenario where putbacks are available and the securities/assets are worthless/significantly devalued, then the buyer will always seek to exercise the right of putback/recission/whatever.  What stands a significant probability of happening is that if the mortgages are putback to their originators, the subsequent chain of assignment will be tasked with trying to get blood from a turnip.  As a result, the likely bagholder (see only entity with any money) is going to be the TBTF, et al.

In the end, someone needs to be given the legal right to foreclose...  and, in all likelihood, that same person/entity will be subject to liability from putbacks...  the difference between the sale price of the properties and the cost of the putbacks will be the haircut...  as it should be.

The biggest impediment to settlement is that a particular tranche of securities might have mortgages originated by dozens (hundreds?) of originators...  getting everyone to the table is like herding cats.  Someone needs to step in and require a determination of the real holder...  and, if need be, the judiciary can make a decision as to who gets what with the proceeds...  I presume it would be preferable to the parties to agree amongst themselves who'll take the haircuts, but if a court does, so be it...  I would just think they would want to avoid the "all or nothing" proposition the court will impose...  If everyone takes a 5% haircut before getting to the TBTF, the pole might not be as hard to chin...  Of course, if you're the victim of fraud, then you really don't have much incentive to take a haircut...  decisions decisions...

But yes, the first time a yokel wants to walk through the door and pony up a retainer (or, if they've been enterprising and have documentation to prove their case, then I'd probably take it on contingency), then I'm headed to SOP, which = demand letter>demand letter w/ complaint attached>filing complaint.  I strongly suspect a settlement is in order, but if they settle with every foreclosed party, then they're sunk...  I can't fathom these cases would settle for any less than $.50/$1.00.  And, as many foreclosures as have happened, that's gonna be a really big number.  In the end, foreclosed parties can simply invalidate decrees and return everything prior to foreclosure...  the foreclosing party is responsible for the tab and it's a dead ass loss.  On houses that are <$200k, it's cost prohibitive in all likelihood. 

For prospective foreclosures, I strongly encourage any party purporting to be the holder to do a significant evaluation into the validity of the assignments in its chain or enter into an agreement among the entire chain to foreclose as plaintiffs and pray for the court to distribute the proceeds...  once a couple precedents get thrown down, the settlement/agreement among the chian of assignment should be a lot easier...

chunga's picture

"For prospective foreclosures, I strongly encourage any party purporting to be the holder to do a significant evaluation into the validity of the assignments in its chain..."

There lies the problem and where reverse engineering comes into play. If a close examination of the (dare I say dubious) assignments also comes into play, and the foreclosure continues despite the reverse engineering -- that takes away the "oooops" card. The crafty lawyer will then prove intent by potentially every player in the game.

As an aside...who wants to be left holding the REMIC bag of tricks?

MachoMan's picture

No choice...  There was a bagholder for certain...  what happened was, seeing this, they decided to throw the liabilities on the government (you and I) and start disembowling their organizations via withdrawals...  e.g. the completely necessary "bonuses".  In the end, there will be a shell left while the principal actors get away and set up shop in the next country to emerge as world superpower and also dumb enough to go along with the scheme.

If someone (attorneys included) is stupid enough to continue a foreclosure after being presented evidence of forged/incomplete/unenforceable documents, then they get what they deserve...  I'm not sure where I stand on the degree of diligence required by attorneys reviewing documents, but at the very least your professional reputation is at stake when you foreclose without being certain...  obviously, there are practical considerations...  which often times means the party representing the foreclosing party cannot waste time trying to determine the real holder...  but, once some reasonable information has come to the attorney's attention or the attorney should have reasonably determined the lack of authenticity/validity of the documents, then it's time to punt/cease.

I would think that but for a very small percentage of foreclosures, the issues with MERS, fraudclosuregate, et al, would stop foreclosures...  until the chain of assignment can be better determined.  Apparently attorneys are desperate for fees... 

bigelkhorn's picture

Hey I like that how you said FIGHT CLUB LAWYERS. not sure if it will happen.

the whole system is rigged against us. Even teh stock market.


The dollar looks horrible here. Those FFT guys have been crushing the market latetly. I am a VIP member and love their technical analysis, but they just uploaded a FREE video of what they think is going to happen in the next few weeks to the S&P 500. Its well worth a watch!



bruiserND's picture

Isn't that interesting; The Trial Lawyers Assn., champions of Freedom Liberty The American Way and protector of the little guy haven't found a way to protect over 2 million home owners but they can align with unions, shake down insurance companies and bankrupt thousands of companies sending hundreds of thousands of jobs overseas with false asbestos claims.


Note to Democrat Presidential Candidate,John Edwards...go ahead and kill your self , Freddie Baron is waiting for you in Hell. 

Extremist Tan's picture

That's tricky because you can go bankrupt.  But every ZH member should become a FINRA arbitrator to bring balance to the industry-controlled judiciary that brought us the tech wreck, auction-rate securities, equity-indexed and variable annuities, etc.

Tommie-ZeGermansAreComing's picture

Your internet detective skills are outstanding Watson!

tradewithdave's picture

Careless, if what you're suggesting is indeed true, then it would seem to be quite logical considering the article's attempt to stretch the value of $15,000 in contributions across the scope of such a high profile and scrutinized settlement.  Doesn't your statement, if factual, reflect quite poorly on ZeroHedge and its house alias Tyler Durden.

Dave Harrison

Brother can you spare a dime's picture

+1    It's just BAC and their minions trying to muddy the waters. You have to spend way more than 15K to get a state AG. I'll decide after I see what the terms are.

grekko's picture

I totally agree Careless.  now we are left with only one question: Who is John Galt?

cossack55's picture

Wonderful Bitchez! post. Nice addendum. 


FaithEqualsZero's picture

The only way this gets fixed is by complete collapse. Just hit the red scram button. Pull the plug. Fuck it!

SteveNYC's picture

This is America, this sort of "behavior" does not happen here...... I'm told on Good Morning America, Regis & Kelly, The View, and by the President.......right?

Moe Howard's picture

It has never been a suprise to me that lawyers and polititians are corrupt, the surprise is how cheaply they are bought.

Antarctico's picture

Reading about the amounts of the campaign contributions, I was thinking pretty much the same thing.  By the standards of big corporate graft, this is $50 curbside blow-and-go -- quick and cheap.

uno's picture

have to figure the real payoff is in the Caymens or somewhere offshore; maybe hire a son or daughter at BofA mid-manger level

johnnynaps's picture

Cheap?! The printing press is running $75 Billion a month......not cheap. But, will be soon when gas is $50 a gallon!

StychoKiller's picture

"The Falcon and the Snowman" -- entire countries betrayed dirt cheap!  Even Jesus of Nazareth, for 30 pieces of silver.

thames222's picture

Honestly, they make so much damn money in their regular jobs, do they need to be so shady as well?  I feel like I should start trying to bribe my local police or law enforcement for protection, lol.

asdasmos's picture

They don't even make pains to attempt to hide it anymore.......

unwashedmass's picture

yeah, that's what's so pathetic about all of this....

and ...even more disheartening, the mainstream press won't touch this story with a ten foot pole.

cossack55's picture

Maybe the O'Really/Dubbs team will cover it.

Bob's picture

What is it about the Corporate Press, anyway?

thames222's picture

As powerful as the Internet is to us, the mainstream cats you're talking about do unfortunately control it--it's only through legitimate, ethos-filled word of mouth that people will actually realize what's going on and how they can stop it.  get the word out to your neighbors

MSimon's picture

As powerful as the Internet is to us, the mainstream cats you're talking about do unfortunately control it

And how do I know you are not some super secret shill for the aforementioned powers?


WonderDawg's picture

Well, the Supreme Court removed the limit that corporations can spend on political campaigns, which basically makes it legal to buy politicians. Here's what Hopey the Clown said in January 2010 after the Supreme Court's decision:

"This is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.”

From the guy who's going to raise a billion dollars for his re-election campaign. Sounds like a big ol' For Sale sign to me.

LostWages's picture

Good to see we still have the best politicians money can buy.

Unfucking believable!  Tar & feathers!!

I am Jobe's picture

How many folks in the USA is even aware of this kind of crap. Hang the bitchezz and their families. Don't spare the MOFO's and don;t stop until this is cleaned up period. If Americans have no balls call the Chinese, they will do it gladly.

johnnynaps's picture

how awesome of a kung-fu series? I would pay an extra $30 a month to watch one member of Congress fight a ninja once a week! Could you imagine Pelosi fighting that girl in Rush Hour 2?! Barney Frank verse Jet Li?!

Quixotic_Not's picture

Same shit, different decade...

A lot of Democrats & Republicans in the USofA, not many Americans.

Welcome to the Free Shit Empire

Teamtc321's picture

Hope, Hope and Change!!  We can take the future.......

Teamtc321's picture

Hope, Hope and Change!!  We can take the future.......