IA AG’s Office Whining That They’re Not Getting Credit for Settlement Bank of America Violated

The folks desperately working to give the banks a Get Out of Jail Free card for their servicing abuses are trying hard to deny they’re not doing so.

Take this anonymous accusation from someone involved in the settlement talks claiming that opponents of the settlement are using innuendo to smear those participating in it.

Another person close to the talks, who like several others spoke on the condition of anonymity to discuss the situation more freely, said many in the group are “just exasperated. . . . This smear campaign of lies and innuendo, it’s uncalled for, it’s unprecedented, and it threatens substantial consumer harm.”

Aside from the fact that even if there were such a campaign it would not be unprecedented, since folks have tried to suggest Eric Schneiderman committed an impropriety by paying himself back for a campaign loan he made to his campaign.

But unless the WaPo left the material describing the substance of the “smear campaign of lies and innuendo” on the cutting room floor, then what we have here is a person anonymously making vague innuendos about a smear campaign of innuendos.

And then there’s the whining from IA Assistant Attorney General Patrick Madigan, who says it’s unfair to say he and Attorney General Tom Miller are in bed with the banks (in spite of Miller’s fundraising outreach to the banks) because of the great work they’ve done holding banks to account in the past.

“We’ve been accused of being in bed with the banks. To say that to a group of people who have spent the last seven to 10 years fighting mortgage abuses day in and day out is an insult of the highest order,” said Iowa Assistant Attorney General Patrick Madigan, a longtime Miller deputy, who has worked on major settlements with subprime lenders such as Countrywide and Ameriquest. “It’s just unreal.

You know, their work “fighting mortgage abuses”? As in the settlement they signed onto with Countrywide in 2008? The one that–according to NV Attorney General Catherine Cortez Masto–Bank of America has basically blown off?

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.

The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.

(See DDay for more on Masto’s complaint.)

Perhaps Madigan doesn’t understand this. But pointing to a settlement that, in retrospect, appears to have largely been a PR stunt as proof that you’re not in bed with the banks sort of proves the point that you are.

12 replies
  1. Bob Schacht says:

    Thanks for keeping your eye on the ball and keeping us up to date on these capers. It sounds like IA AG Miller is feeling the heat for his palsy-walsy proposed deal with the banks. Maybe this feedback will strengthen his backbone.

    Bob in AZ

  2. DWBartoo says:

    Thank you, EW.

    It would appear that many in the political class and more than a few in the legal profession, are banking on their belief that the people, mere hoi paloi, cannot figure the sum of one plus one.

    Matso’s filing, looks to be quite thorough and should serve as a model for other state’s attorneys general …

    Methinks that there are some who protesteth much too much, and that this is becoming more broadly and deeply understood by the day.


  3. klynn says:

    “Perhaps Madigan doesn’t understand this. But pointing to a settlement that, in retrospect, appears to have largely been a PR stunt as proof that you’re not in bed with the banks sort of proves the point that you are.”

    Love it.

    If I had a sister, I would have wanted her to think and express herself just like you. And, if you were my sister, you would be hugged for your keen ability to make THE point of the matter!

  4. klynn says:


    I left this comment/question at dday’s before this was up here. So, I’ll repost it here:

    So, as we’ve been pretty clear on understanding all along, we are looking at criminal behavior.

    Will not the AG’s trying to settle, while avoiding the facts laid out by Masto, end up accessories to the crimes in terms of those who have been harmed?

    So, could Miller be charged as an accessory? Does not Miller carry the liability as well now? IANAL.

  5. klynn says:

    “This smear campaign of lies and innuendo, it’s uncalled for, it’s unprecedented, and it threatens substantial consumer harm.”

  6. klynn says:


    Does not their lack of support to go against the banks cause consumer harm?

    (Goodness I need an edit button.)

    EW can this be added to my comment above?

  7. rugger9 says:

    @klynn: @klynn:
    I’m not a lawyer either, but in the military they’d be an accessory. As I understand it, simple negligence isn’t grounds to hang a government type, but malfeasance or gross negligence is. I’m sure that was part of the Bushie mantra: “No one could have foreseen…[fill in the blank]” since that phrase at first blush would make everything simple negligence. The shredding and deletion of the records, electronic or otherwise, means no inconvenient facts would rise up to spoil the narrative.

    In this case, I think it would be harder to hide the evidence, given how Miller and his flunkies are takin’ it to the streets with pressers.

  8. Katie Jensen says:

    For a while they had enough power to keep the lid on this stuff. When I think about how long it has continued to go on, my blood boils. GMAC is calling me every day because they want to refinance my loan…with a lower rating. But I can’t make myself do it…the new deal will say I can’t sue for past liabilities, and I don’t trust the amound of money they will ask me to refinance. I don’t trust them at all. I don’t even want to answer the phone to speak to them.

    You can’t imagine the horror, unless you have been there, of watching a bank change your bottom dollar, your payment, your fees, and then act as if you are the one in the wrong. YOu can’t imagine what it’s like to go to one lawywer after another, who just scratches his/her head and says, “yah, don’t know what to tell you, they’ve been doing this”. Or hear people say “well you got behind, that on you”. For literally 8 years. What blew my mind and still does…is “who has that kind of power” the power to make a whole nation ignore the law? Seriously…something is seriously wrong with the picture and it’s not just greed, it’s not just the banks have too much power, yes they do, but they have the kind of power that you have at the end of a gun, or a nuclear weapon, they have a kind of power to change our laws and our country…people need to understand this point. I knew then, and have been saying since then, that the meaning behind this…is even more important than the fact that millions lost their homes…there is a power out there, that can make millions lose their homes, make the USA not enforce it’s mortgage laws. Not enforce it laws or constitution. Who can do that to the US? Who?

  9. Linus Huber says:

    The rule of the law has been violated often and long enough. Anybody standing in the way of getting those bankers to face responsibility is part of the problem. As long as the bankers who lined their own pockets while extending credit without due diligence are still free, justice has not been served. We have to fight our way back to the rule of law, not matter how hard it is and how long it takes.

  10. S says:

    Just accusing you “being in bed with the banks” is like giving you an honorable Academy Award Oscar. In reality, all of you obedient settlement fanatics (including all the way to the top in the administration) are a bunch of low life crooks. You are like a condom for the banksters to be used and discarded.

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