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NEVADA ATTORNEY GENERAL (Catherine Cortez Masto) TO FILE CRIMINAL CHARGES AGAINST WELLS FARGO FOR FORGERY

“WE’VE GOT THEM COLD.”

EDITOR’S NOTE: We have all said what they did was criminal, now it is becoming official. And before you naysayers start complaining, let me point out that this has actually followed an orderly progression and you will see it many times over in the coming months.

• First we started with the deductive logic and investigation, and allegations by borrowers in court. They were not taken seriously until the number of such complaints reached a crescendo, but that is the way our system works.
• Then the regulators, who had turned a deaf ear to anyone writing a letter complaining about the servicing of their loan or the behavior of a pretender lender, turned themselves around and entered a slew of cease and desist, consent orders and those orders have teeth and can be used by borrowers in discovery and in their pleadings. The agency findings of misbehavior are presumptively correct.
• Now the justice system is getting involved, because building criminal cases takes a lot longer than civil cases or even administrative cases against the banks. Remember they have to prove the case beyond a reasonable doubt — not merely on innuendo or they “must have done it” or anything but that they did do it, they knew they did it and they did it with criminal intent.

Well now Moody’s has gone and done it.

They just hit BAC, C and WFC with downgrades, saying that the government is “more likely” to allow a large bank to fail if they get in trouble.

This belies the truth, which is that the government doesn’t have the capacity to bail out a trillion-dollar boondoggle any more.  There’s no way to get another TARP through Congress and there’s no back-door way to fund it either.

So Moody’s is correct, in a round-about sort of fashion.  Let’s not conflate desire with capacity, eh?

The entire banking sector took an instant dive on that, with BAC now down more than 5% and Wells, which was up, back to even.

Bank of America’s insular, CEO-blowing board needs to do some firing in the executive suite.  May I suggest a Howitzer for the means of that “firing”?

Frankly I’m not sure it matters at this point.  Countrywide was a monstrous mistake, and a very expensive one on top of it. Tangelo should have been peeled in 2008 if not before rather than riding off into the sunset with a civil penalty that Bank of America paid a huge chunk of. Nobody seems to care much about the fact that all of these banks have been implicated in various schemes and frauds related to foreclosures – not that this is new, of course, in that they did the same thing on the way up with appraisals and similar, blacklisting honest appraisers and essentially demanding overvaluations to “support” their reckless lending.

Now let’s add to that: Nevada is apparently preparing to criminally charge some of these institutions.  That’s not sue, it’s prosecute.  We don’t yet know who the targets are but this will mark the first actual criminal indictments of note should they actually appear.  For my part I’m not going to believe it until I see it, considering how overdue such an action is in the context of anything even lightly-related to the concept of ”justice.”

Are we finally going to “Stop the looting and start prosecuting”?  Hope springs eternal.

Here’s the rub, when you get down to it:  Every one of these institutions should have been a zero in 2008 and the executives should have been brought up on indictments.  As such the alleged “value” in these firms is nothing more than government support for the same sort of business model as Full Tilt Poker is accused of – that is, claiming value in assets that does not in fact exist, relying on the belief that everyone will not show up and demand their money at the same time.  Proof of this is readily available every day in the market in that these firms are selling at a fraction of their claimed book value; if there was anyone who believed that the accounting was honest they’d instantly buy the firm in question as that would be fastest and most-certain money ever made in M&A.

That it hasn’t happened is all the proof you need that the accounting is absolute and utter crap.

Oh Mr. Buffett?  How’s your position in BAC working out?

So Where Are The Cops Again?

Gee, what have I been talking about for a couple of years now?

WASHINGTON — A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.

No, really?

And if you remember, I and others have talked about FHA guaranteed loan performance not being exactly honestly reported either…..

The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as leverage in their ongoing talks with mortgage companies aimed at forcing the firms to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures.

Oh yeah, fines.  Rip people off, pay a fine.  We’re just going to continue what we’ve been doing, right?  Make it perfectly ok – a business practice.  Commit 100 felonies, get caught committing 10 of them and say “Oh gee, I’m sorry, here have that back.”

But you get to keep the fruits of the other ninety!

Justice officials will soon meet with the largest servicers and walk them through the allegations and potential liability each of them face, the sources said.

I’ll believe it when I see filed charges.

Rather than punishing banks for misdeeds, the administration is now focused on helping troubled borrowers in the hope that it will stanch the flood of foreclosures and increase consumer confidence, officials involved in the negotiations said.

Right – breaking the law is just fine if you’re a bankster.

You know damn well the government isn’t going to do jack about this, and you also know damn well that the State AGs will kneel before the banskters rather than sue or prosecute as well.

It’s all they’d done thus far.

We’re all rendered nothing more than maids servicing these jackasses – by force – in their expensive hotel suites.

The Market-Ticker