After joining Covington's biggest competitor the SEC's new legal chief moved on to another law firm, still defending banks and bankers from the agency he now represents. He had one last high-profile case before rejoining the government: MF Global. That's the firm that stole its investors' money instead of investing it. He defended one of its executives.
One of this weekend's settlements with Bank of America addressed the fraudulent sale of mortgages to Fannie Mae. (Fannie Mae: That's the government agency that was "privatized," ruined by privatized greed, and then rescued by the taxpayers who now own it.) The agreement was undoubtedly hammered out between Bank of America and Fannie Mae's CEO, who represented the people's interests in this case.
Fannie Mae's CEO hasn't been there long. His last job was as General Counsel for ... Bank of America. In fact, he was BofA's top attorney in 2008, at the height of its foreclosure misdeeds. Now he's settling those misdeeds as part of a wave of deals that will allow the bank's executives to escape criminal prosecution. So he had a seat at both sides of the table.
That happens a lot in these deals. Get used to it.
Bank of America's agreed-upon payment to Fannie Mae sounds big -- $3.6 billion. But that comes to exactly one percent of the outstanding debt on those loans -- debt that's still owed by the occupant of that empty chair. The bank's total settlement costs are roughly 0.75 percent of the total loan value.
BofA also agreed to sell the servicing rights to these mortgages ... undoubtedly to another one of the banks sitting around that frequently-used table. The buyer will need to recoup their investment, of course -- and loan servicers boost their income by overcharging the occupant of that empty chair.
So whose chair is it? You already know. That chair belongs to the borrower whose home value was artificially inflated by a bank-hired appraiser. It belongs to the homeowner who paid her mortgage on time every month, but was still hit with unjustified 'servicing charges' that caused her to fall behind ... and lose her home.
That empty chair belongs to the minority communities targeted for predatory lending, then left to wither and die. It belongs to the bedroom communities whose residents invested their life's savings in real estate whose value had been artificially pumped up by by bank speculation. It belongs to millions of families -- in Hendersonville, in West Garfield Park, in Baltimore and Jacksonville and Bakersfield and thousands of other communities across the country.
That chair belongs to the family who lost $50,000 or $75,000 or $100,000 when they lost their homes, and then got $1,200 back in that "big" $25 billion deal -- and only then if they were "lucky." It belongs to all the Americans who lost trillions of dollars in housing value when the bank-created bubble finally burst, and who were then left holding the debt.
That chair belongs to all the people who can't find work because nobody's hiring. Nobody's hiring because nobody's buying. And nobody's buying because so many people are struggling to pay their overpriced loans.
That chair belongs to you, and it belongs to me. And as long as it's empty these deals will all turn out the same. A small circle of friends will keep cutting the same cushy deals over and over again until we go to Washington and demand a change, this change:
No more deals. No more negotiations. Not until we're in the room. Not until we're seated in the chair, at the table, in the chambers of justice, that have always rightfully belonged to us -- and only us.
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
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