You probably recall last September's news that the nation's largest mortgage lenders faked documents, forged signatures, and took shortcuts in the process of approving thousands of foreclosures.
Since then, the Federal Reserve Board sanctioned 10 banks for their actions, and the attorneys general of all 50 states as well as federal officials have been negotiating a monetary settlement with the banks over the shoddy practices.
Today, Karl Rove used his Wall Street Journal column to passionately defend the banks, calling a proposed $20 billion settlement that would be used to help homeowners a “stick-up,” and baselessly claiming that the money would be used for “election year bribe[s].” Moreover, he claimed that this “bank heist is merely the latest example” of President Obama “being fully versed in the Chicago Way.”
Rove further stated that the Justice Department and state attorneys general “are demanding $20 billion for sloppiness, which they will then be able to hand out to voters -- and potential supporters.”
“Sloppiness?” While Rove does note that banks were “accused of 'robo-signing,' in which foreclosure documents were signed by bank employees or agents without properly certifying all the papers,” he glosses over the systemic problems in these banks' foreclosure systems. The Washington Post reported last September:
The nation's overburdened foreclosure system is riddled with faked documents, forged signatures and lenders who take shortcuts reviewing borrower's files, according to court documents and interviews with attorneys, housing advocates and company officials.
Ally Financial is now double-checking to make sure all documents are in order after lawsuits uncovered that a single employee of the company's GMAC mortgage unit, a 41-year-old named Jeffrey Stephan, signed off on 10,000 foreclosure papers a month without checking whether the information justified an eviction.
Beth Ann Cottrell said in a sworn deposition in May that she signed off on thousands of foreclosures a month for JPMorgan Chase even though she did not verify the accuracy of the information.
In Georgia, an employee of a document processing company, Linda Green, for years claimed to be executives of Bank of America, Wells Fargo, U.S. Bank and dozens of other lenders while signing off on tens of thousands of foreclosure affidavits. In many cases, her signature appeared to be forged by different employees.
Rove can disagree with this proposed settlement plan all he likes, but defending the banks while glossing over their actions and then baselessly characterizing the whole thing as a vote-buying scheme while smearing Obama is outrageous.
From Rove's column:
Mr. Obama has decided that taxpayers have no appetite for bailing out homeowners who don't make their payments, or for rescuing those whose homes are worth less than their mortgages. Instead, he's backing a proposal by his Department of Justice and state attorneys general to force major banks to cough up the dough.
The money would come from a settlement with JP Morgan Chase, Citibank, Bank of America, Wells Fargo and other banks accused of “robo-signing,” in which foreclosure documents were signed by bank employees or agents without properly certifying all the papers. The attorneys general admit that virtually no one was erroneously foreclosed upon because of robo-signing. The banks foreclosed on people who were on average 18 months delinquent, and after multiple attempts to modify the loan had been tried and failed.
But Justice and the state attorneys general are demanding $20 billion for sloppiness, which they will then be able to hand out to voters--and potential supporters. The money won't come from the banks; it will come from their customers, millions of whom will pay more in fees and interest and will, in some cases, be denied credit.
The proposed settlement is a money grab in search of a crime. A fairer way to punish banks would be to have them generously compensate the handful of people wrongly evicted because of a “robo-signing” abuse, after providing them with an expedited way to have their claims heard. And, of course, to return their homes.
It is fundamentally unfair, even devious, to fleece banks out of billions, ignore victims of “robo-signing” who were wrongly evicted, and then hand out cash to cronies. The $20 billion bank stick-up is a transparent attempt to pay some voters a thinly disguised election year bribe, while pretending the money didn't come from millions of middle-class families with a checking account, loan or credit card at an affected bank.
This is not the behavior of a transparent, honest and accountable leader, which Mr. Obama held himself out to be in 2008. The real Obama turns out to be fully versed in the Chicago Way. The bank heist is merely the latest example.