More on Rocket Docket Scam

I blogged about the "rocket docket" foreclosure courts in Florida. There is good indication that the David J. Stern law firm forged foreclosure documents. Judges in Florida foreclosure courts have been known not to review foreclosure documentation before evicting a homeowner. The problem became public thanks to Matt Taibbi's reporting in Rolling Stone.

Apparently, the problem has garnered the attention of the Treasury Department. Phyllis Caldwell, Chief of Homeownership Preservation Office, testified before the Senate Finance Committee.

The reports of "robo-signing", faulty documentation and other improper foreclosure practices by mortgage servicers are unacceptable. If servicers have failed to comply with the law, they should be held accountable. The Administration is leading a coordinated interagency effort to investigate misconduct, protect homeowners and mitigate any long-term effects on the housing market. While Treasury does not have the authority to regulate the foreclosure practices of financial institutions, nor to ensure that those practices conform to the law, it is working closely with agencies that do have such authority.

The Financial Fraud Enforcement Task Force, a broad coalition of law enforcement, investigatory, and regulatory agencies that brings together more than 20 federal agencies, 94 U.S. Attorneys Offices, and dozens of state and local partners, is working to ensure that foreclosure practices are thoroughly investigated and any criminal behavior is prosecuted. The Federal Housing Administration (FHA) has been reviewing servicers of loans it insures for compliance with loss mitigation requirements. Additionally, the Office of the Comptroller of the Currency has directed all large national bank servicers to review their foreclosure management processes – including file reviews, affidavit processing, and signatures – to ensure that the processes are fully compliant with all applicable state laws. The other independent banking regulatory agencies are doing similar reviews of institutions under their jurisdiction. Attached to my testimony is a fact sheet providing more detail concerning the activities of the coordinated interagency effort.

I hope Caldwell cracks down on these bogus foreclosures. We could be talking about millions who were thrown out of their homes because of shady legal practices.

Sen. Shelby Wants to Gut Financial Reform

Richard Shelby would most likely become chairman of the Senate Committee on Finance if Republicans take over the Senate. Shelby made it clear to ABC News that he plans to gut the Financial Reform bill.

"The bill is so sweeping and such a game changer in many ways that it's incumbent upon us to revisit it," Shelby said at the Reuters Washington Summit.

Yes, things were working so well before. That is why taxpayers were left paying for the bank bailout. Financial institutions were taking huge risks with naked credit default swaps. AIG sold too many naked CDS. AIG was unable to pay all the financial institutions that bought CDS. AIG nearly went under and other troubled financial institutions could not get the CDS revenue owed to them.

Federal Reserve Chairman Ben Bernake and Tresury Sec. had this revealing conversation about AIG.

On Wednesday, September 17th, a day after the Fed agreed to inject eighty-five billion dollars of taxpayers’ money into A.I.G., Bernanke asked Paulson to accompany him to Capitol Hill and make the case for a congressional bailout of the entire banking industry. “We can’t keep doing this,” Bernanke told Paulson. “Both because we at the Fed don’t have the necessary resources and for reasons of democratic legitimacy, it’s important that the Congress come in and take control of the situation.”

Shelby wants to maintain the status quo.

"I don't believe it's good for business, it's not good for the financial sector and ultimately I don't believe it's going to be good for credit for a lot of people who need it. It's gonna cost," Shelby said.

I have no problem with the free market and people making money. My concern is systemic risk that could cause a depression. There is a difference between encouraging free market growth and reckless financial practices. Shelby would be encouraging the latter.

Shelby has set his sights on the newly created Consumer Financial Protection Bureau.

"The consumer agency bothers me the most," said Shelby, who failed to reach a compromise with Democrats and voted against the bill. "I thought the creation of it and the way it was created was a mistake," he said.

Notice Shelby didn't offer an alternative to make sure that consumers aren't vulnerable to shady financial practices. It is absolute insanity for Republicans to think different results will be achieved using the same faulty financial practices.

Shelby saves his most wingnuttery attack for Elizabeth Warren.

"I believe she's got a big ax to grind and she's sharpening that ax," said Shelby. "I don't think that you need somebody in a position like that with all these preconceived ideas and I believe she has a lot of them."

Warren is serving the American people and not special interests. Warren hasn't been afraid to put Treasury Sec. Tim Geithner in the hot seat. Sen. Chris Dodd has been against Warren's nomination. Warren is scaring members of both political parties. She must be doing something right.

Tom Harkin on the Public Option

The Senate Finance Committee killed the public option. Tom Harkin tells Ed Schultz the final bill will have the public option.

HARKIN: I believe that when we merge these two bills, we will have a public option in there that we will take to the floor of the Senate and we're going to pass it.

SCHULTZ: Well, okay, so despite what happened in the Senate Finance Committee today, you think you've got the votes to get a public option coming out of the Senate? Cause I'm not so worried about the House anymore and I think the American people, I mean, this is gonna be reported, all the talking heads are gonna say, "Hey, public option is dead." I need to have some confidence tonight with you, Senator Harkin, that you think you can get these votes out of the Senate.

HARKIN: Well here's one thing I will guarantee you, Ed, and I will tell you again as I've told you before -- we will have a bill on the President's desk before Christmas and it will have a public option.

SCHULTZ: Well that's what the American people want to hear. Now ...

HARKIN: I know it and most of the doctors want it, 73% of the doctors polled want a public option, uh, sixty-some percent of the American people want a public option and the vast majority of Democrats, over fifty in the United States Senate, also want a public option.

SCHULTZ: Okay now, are you going to have to go reconciliation? You're not going to get sixty at this point are you?

HARKIN: Well, I wouldn't give up on that yet. I still think that we can get sixty votes to bring the bill on the floor of the Senate. And then we'll have amendments and then we'll have, probably have to have a cloture on the bill to bring it to a close. Now that will be the tough vote. I still believe that we can get the sixty votes for that.

SCHULTZ: Okay, what about ...

HARKIN: But if we don't, Ed, if we don't, we're going to go to reconciliation. As I said to you, and as I say to the American people, we will have this bill on the President's desk by Christmas, one way or the other.

Reconciliation is only used on bills that involve the federal budget. Health care definately falls into that category. The question is will Harry Reid push for reconciliation? President Bill Clinton attempted to use reconciliation to pass health care reform. Sen. Robert Byrd stopped Clinton. The Byrd Rule was created to limit reconciliation only to deficit reduction.

* a provision that mitigates direct effects attributable to a second provision which changes outlays or revenue when the provisions together produce a net reduction in outlays;

* the provision will result in a substantial reduction in outlays or a substantial increase in revenues during fiscal years after the fiscal years covered by the reconciliation bill;

* the provision will likely reduce outlays or increase revenues based on actions that are not currently projected by CBO for scorekeeping purposes; or

* such provision will likely produce significant reduction in outlays or increase in revenues, but due to insufficient data such reduction or increase cannot be reliably estimated.

Republicans will be looking for potential ways a public option bill would violate the Byrd rule. If a violation is found then 60 votes will be needed to a filibuster.

Without Walls Under Investigation

The Senate Committee on Finance has launched an investigation into the finances of Without Walls leader Randy and (soon to be divorced) wife Paula White. I'm wondering what the hell took so long.

Paula White owns a $3.5 million condo in Trump Tower. The Whites have spent money on plastic surgey and bought a Bentley convertible using their tax exempt status. The worst offense is selling $871,000 worth of merchandise from their businesses to Without Walls. That is extremely fishy.

This should be interesting. I never had a personal grievance against Without Walls. They do good work for the homeless and are tolerant enough to have Joe Redner speak at the church. I was just wondering if the Whites were going to get busted for their lavish lifestyle. It's hard for them to say they are doing God's work when they live $2.1 million on Bayshore Boulevard home.