Richard Shelby’s Selective Investigation

Let me make a rare statement: I agree with just about everything Richard Shelby said in his call for an investigation of mortgage servicers.

The Federal Banking Regulators should immediately review the mortgage servicing and foreclosure activities of Ally Financial, JP Morgan Chase and Bank of America. The regulators should determine exactly what occurred at these institutions and make those findings available to the Banking Committee without delay.

Furthermore, because it appears that the regulators have failed yet again to properly supervise the entities under their jurisdiction, the Committee should immediately commence a separate, independent investigation into these allegations. It is the Committee’s fundamental responsibility to conduct oversight of the banking regulatory agencies and the firms under their jurisdiction.

With the recent passage of the Dodd-Frank Act wherein the financial regulators were granted even broader powers, I am highly troubled that once again our federal regulators appear to be asleep at the switch.

But I am rather curious about one thing. Just days after Goldman Sachs announced that its servicing arm, Litton Loan Servicing, was suspending foreclosures in some states, why aren’t they–or the other big servicers, Citi and Wells Fargo, on Shelby’s list?

Mind you, given HUD Secretary Shaun Donovan’s announcement that the government has been investigating FHA servicers since May and had already identified problems from some servicers (but had apparently done nothing about those problems), maybe Shelby has reason to pick on just three of the servicers.

But Shelby’s choice of targets sure does bear watching.

  1. Citizen92 says:

    It is my understanding that all loan servicers are overseen by the Federal Trade Commission, and not any sort of banking regulator.

    • Peterr says:

      Lots of banks (including BofA, JP Morgan Chase, and Wells Fargo) are involved in servicing loans, and so they are subject to their banking regulator (FDIC, OCC, the Fed, etc.).

  2. BoxTurtle says:

    I did a quick search, expecting to find financial links from the from the ones he excluded that weren’t there on the ones he mentioned. Being the ranking GOPer, he gets money from all of them and it doesn’t look to me as though Citi gives any more or less than BofA.

    So we are faced with the possibility that we have a GOPer actually doing his job or the possiblity we’re missing something. I’ll go with “B”.

    Boxturtle (I find myself agreeing with Shelby here as well. I don’t think I like agreeing with Shelby)

    • bmaz says:

      Yeah, that’s tough. Every now and then I have to agree with Issa; I feel weird, but I do. Not very often understand you, and it will probably soon be a lot less.

  3. Rayne says:

    Interesting campaign finance history, bears closer scrutiny for recent transactions like donations from executives at specific firms.

    Top 5 Contributors, 1989 – 2010
    Contributor Total Indivs PACs
    Southern Co $148,491 $113,991 $34,500
    JPMorgan Chase & Co $136,271 $84,450 $51,821
    Drummond Co $125,800 $93,800 $32,000
    MBNA Corp $111,550 $98,550 $13,000
    Collazo Enterprises $110,100 $110,100 $0

    Top 5 Industries, 1989 – 2010
    Industry Total Indivs PACs
    Lawyers/Law Firms $2,365,801 $2,001,136 $364,665
    Securities & Investment $1,470,482 $986,071 $484,411
    Real Estate $1,154,653 $917,303 $237,350
    Commercial Banks $1,051,133 $457,887 $593,246
    Insurance $870,398 $287,400 $582,998

    (MBNA > Nations Bank > Bank of America.)

  4. BoxTurtle says:

    Possible theory: He didn’t mention the other banks because their balance sheets aren’t strong enough to withstand such scrutiny.

    Boxturtle (It’s easier to believe he’s sticking his head in the sand than he’s doing his job)

  5. goldstandard says:

    We can’t seem to get anything accomplished in the country these days other than printing more worthless dollars along with partisan bickering. While the country continues to go down in flames, talk about getting things done. Ever see a 15 story hotel go up in six days? Just ask the Chinese how to get the job done while back here in Amerika we sit back as our future is sold out from under us as the Fed reve’s up the printing presses. No doubt there will be plenty of happy faces come bonus time in the canyons of Wall Street.


    Ark Hotel Construction time lapse building 15 stories in 6 days.

    As the United States and China battle over the finer points of currency manipulation at the G-20 summit, American negotiators may want to take note of this startling testimonial to the productivity of Chinese workers: A construction crew in the south-central Chinese city of Changsha has completed a 15-story hotel in just six days. If nothing else, this remarkable achievement will stoke further complaints from American economic pundits that China’s economy is far more accomplished than ours in tending to such basics as construction.

    The work crew erected the hotel — a soundproofed, thermal-insulated structure reportedly built to withstand a magnitude 9 earthquake — with all prefabricated materials. In other words, a crew of off-site factory workers built the sections, and their on-site counterparts arranged them on the foundation for the Ark project.

    • Cujo359 says:

      Anyone in that time lapse checking to make sure the building was constructed per the drawings, and that the drawings followed the recommendations for the prefab units? If that didn’t happen, the building would be lucky to withstand a magnitude 6 quake, I suspect.

      China is desperate to create housing in some areas, particularly cities that are seeing lots of expansion due to industrialization. It’s not a big trick to build a building that size quickly (don’t forget, the Empire State Building was built in a year with much less modern techniques.) Building it right is another story.

      • Synoia says:

        The diagonal stay were clear.

        It was prefabricated. Which implies quality control at the factory.

        Also ti’s clear from the last shot of the hotel, where one can see through the hotel, this construction was structure and skin only. No finishing of rooms, no elevators, etc, which are 75% to 85% of the total effort in construction.

  6. Bobster33 says:

    It’s called a shakedown. Once Shelby collects his campaign contribution, the investigation will go nowhere.

  7. rapier51 says:

    Ally I get, it’s old GMAC and who likes them. BAC I get because they are the designated tar baby in this, has been given the short straw and will go down next time somebody has to go down. JPM has me stumped. Dimon must be shitting bricks. In many ways JPM is the most important one of all because of the 700 story derivatives tower. I think Shelby is telling Dimon that he better go full jihad against Democrats or watch out.

  8. Rayne says:

    Hey! What’s the chances two executives at Wells Fargo write Richard Shelby a campaign contribution check on EXACTLY the same day?

    Senate – AL
    SHELBY FOR U S SENATE – $2,400
    general 02/17/10

    Senate – AL
    SHELBY FOR U S SENATE – $2,400
    primary 02/17/10

    WELLS FARGO/EXECUTIVE Richard Shelby (R)
    Senate – AL
    SHELBY FOR U S SENATE – $2,400
    primary 02/17/10

    What was going on February 17th anyhow? Shelby had a fundraiser on the 10th and 24th that month that I can see, but I can’t see anything on the 17th.