Chris Dodd Uses Hearing to Call on Geithner to Do His Job

Chris Dodd didn’t have many questions in yesterday’s hearing on the foreclosure crisis. But he did use the opportunity to call on Tim Geithner to convene the Financial Stability Oversight Council to prevent this crisis from blowing up the economy.

Dodd: Attorney General Miller, at the outset of my opening comments I talked about the importance of getting the, this Financial Stability [Oversight] Council that we established in the Financial Reform Bill to anticipate systemic risk and to collectively work as a body chaired by the Secretary of the Treasury, along with the FDIC and the OCC–there are ten members of that, an independent member and five others that are part of it. This seems to me like a classic example–one that we did not anticipate necessarily when we drafted the legislation, but exactly, we are in a crisis with this. Now you can argue that it’s not yet a systemic crisis that poses the kind of risk we saw in the Fall of 08, but no one can argue that we’re not in the middle of a crisis. Now the idea of this, of course, was to minimize crises so they don’t grow into a large, systemic crisis. Have you had any contact with the Secretary of Treasury? Or is there any communication going on between the Attorney Generals and this Council or the Chairman of it, the Secretary of the Treasury, or their office, to begin to talk about what the role of the federal government might be in formulating an answer to all of this?

Miller: We haven’t had any contact with the Council. We have had repeated contact with the Department of the Treasury, with Assistant Secretary Michael Barr and his staff. We’ve developed a terrific ongoing relationship with them. We talk about these issues and try and help and support each other on these issues. So we’ve had a lot of discussions with Treasury but not with that particular Council.

Dodd: Again I saw [mumble] privately with Senator Warner and others may, Senator Merkley has a similar thought. I’m going to use this forum here, obviously in a very public setting, to urge the Secretary of Treasury and others to convene that Council to begin to work with you and others, so there is a role here to examine this question in seeking broad solutions. So my hope is they’ll hear that request to pick up that obligation that we laid out in that legislation.

You know, when the Chairman of the Senate Banking Community has to use a forum like this to try to remind the Secretary of Treasury of his obligation under Dodd-Frank, it does not inspire a lot of confidence.

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  1. parsnip says:

    Sen. Bennet pointed out that “it’s foolish public policy to prop up home values.” He had prefaced that statement by saying that it can’t be done. Then he pointed out that failure to modify loans leads to entire neighborhoods and the economy going downhill.

    The conclusion one draws from the inaction of the executive is that they are more focused on saving the banks than saving the economy, much less the citizens. Corporate personhood prevails.

    • kbc249 says:

      I have evidence that the banks are comitting fraud in the courts that goes way beyond robo-signing.

      They misrepresent documents alleged to be exhibited in their foreclosure complaints and 1000+ page Summery Judgement Motions. They refuse to provide the omitted imaginary documents after many months of demands for same. They withdraw their motions after continued demands for the imaginary documents which purport to prove standing.

      Entering into a modifacation ligitimazes an agreemant with an entity that does own the debt and does away with the underlying defences cocerning the original fraud by the broker and the loan originators.

      All demand for discovery including compliance withe Fair Debt Collection Practices Act are routinely ignored. In effect the new fraud in the litigation techniques of robo-signing and omitted nonexistant documents obfuscates the original fraud by the brokers and the loan originators which can only be proven through discovery. Discovery must be available as necessary prior to a modifiction or the banks will be allowed to succeed with fraud while the true party in interest privy to the original fraud is concealed. For unknown reasons which disfavor homeowners the banks want to hide the fact that the loans have been securitized. They cannot or will not varify and validate the debt by producing the endorsed promissory notes, assaignments of mortgages, payment histotries, escrow accounting, agreements between broker and loan originatores and copies of signed ducuments never providec at the closing.

      A simple investigation will probably disclose that the litigation practices extend far beyond the adimitted robo-signing by the banks.

  2. jdmckay0 says:

    We’ve developed a terrific ongoing relationship with them. We talk about these issues and try and help and support each other on these issues.

    Damn, sounds like some real hot tuna!!! Can’t say just how excited I am that these AG’s “talk about these issues”.

    I wonder how many of ’em attend FEDERALIST SOC. meetings? Or are “educated” by the various finance lobbyists? Or even have a modicum of understanding just what the bankers did to get us to this point?

    Somehow, getting my head around exactly what concrete action can be interpreted from these guys… “try and help and support each other on these issues”…

    Oh well…

  3. Fractal says:

    Marcy never sleeps! Rush transcripts less than 24 hours after the hearing! Yay.

    Sen. Dodd sees the systemic risk posed by the banks failure to control ownership of mortgage notes. Sen. Tester warned the servicers that their incompetence and/or violations of real property law pose severe financial risks for the servicers, and that there will be “no more bailouts.” If Geithner wakes up and activates the FSOC and/or if the new round of “stress tests” Marcy mentioned shows one or more TARP banks on the brink of insolvency, we might see a huge money-center bank get “resolved” under Dodd-Frank. Any guesses which one goes first?

    • Fractal says:

      Nobody asked me, but I would give Elizabeth Warren a huge amount of credit for this report, dated yesterday.

      Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation

      The Congressional Oversight Panel’s November oversight report, “Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation,” reviews allegations that companies servicing $6.4 trillion in American mortgages may in some cases have bypassed legally required steps to foreclose on a home. The implications of these irregularities remain unclear, but it is possible that “robo-signing” may have concealed deeper problems in the mortgage market that could potentially threaten financial stability and undermine foreclosure prevention efforts.

      In the best-case scenario, concerns about mortgage documentation irregularities may prove overblown. In this view, which has been embraced by the financial industry, a handful of employees failed to follow procedures in signing foreclosure-related affidavits, but the facts underlying the affidavits are demonstrably accurate. Foreclosures could proceed as soon as the invalid affidavits are replaced with properly executed paperwork.

      The worst-case scenario is considerably grimmer. In this view, which has been articulated by academics and homeowner advocates, the “robo-signing” of affidavits served to cover up the fact that loan servicers cannot demonstrate the facts required to conduct a lawful foreclosure. The risk stems from the possibility that the rapid growth of mortgage securitization in recent years may have outpaced the ability of the legal and financial system to track mortgage loan ownership. In essence, banks may be unable to prove that they own the mortgage loans they claim to own.

  4. asdf says:

    that’s funny coming from Dodd. i guess they drew his name out of the hat to play good guy for the cameras this week?

    • onitgoes says:

      heh… beat me to it. Agree. How very weird of Dodd, of all people, to allegedly “call out” his very good pal, Timmy the Geithner. They’re all crooks & liars & scratching each others backs real good. Guess it was Dodd’s “turn” to get up on his hind legs & perform like a show dog for the rubes out in audience. Feh…

  5. KrisAinCA says:

    and to collectively work as a body chaired by the Secretary of the Treasury, along with the FDIC and the OCC

    Shorter Dodd: “Hey, you know those guys that fired this weapon? Have ’em grab a tourniquet. We need to stop the bleeding.”

  6. Cujo359 says:

    When Geithner decides to do his job, things seem to generally get worse. I’m not sure it would be an improvement, but the effort would be nice.

  7. papau says:

    Media reports are that the Treasury Sec is listening to the Banks on how they want the new law watered down via “Consumer” regulations that they favor. This fits into the prior Sec of the Treasury statement to Congress that Warren would have no authority to issue regulations – she just advises as he waits for a permanent head to be nominated and confirmed by the now more conservative Senate – namely his choice of the bank friendly Mr. Barr.

    Other media reports say the Banks are saying thety have the ear of the Treasury Sec. – so all is normal for the relationship of Obama to principles. s

  8. frederic says:

    “Sen. Dodd Uses Foreclosure Fraud Hearing to Call on Geithner to Do His Job”…

    WOW!!.. WOW!!… the hypocrisy runs deep…

  9. Sabre-Toothed Critter says:

    Dodd’s statement indicates to me that he sees the other shoe is about to drop. The statement is Dodd’s way to: cover his butt; suck up to the coming conservative House; deflect blame away from his own bankster-friendly actions.

    And don’t forget that Dodd also has an interest in setting the stage for the “2011 Excuse”…coming soon to Democratic theater near you.

  10. jrubin998 says:

    As other have noted, Sen. Dodd who is leaving soon, is just kicking the can down to someone else. His bill co-authored with Cong. Franks is a very weak bill and they know it.

    So telling Geithner to do his job is meaningless.

  11. oldtree says:

    Put a camera on them and they purr. Dodd needs to show the people he has swindled for all these years that he is getting tough now when it doesn’t matter. He wants to limit the percentage of likely “wheelchair by” shootings he has set himself up for.
    What was saddest was watching Tester and Merkley ignore the basic problem of systematic fraud and divert attention to the little criminals, the servicers. The servicers make 25% foreclosing. They have no mandate nor interest in modification or anything except taking the house. Please make sure that if you consider a loan modification that you spend the money instead on a good psychologist or attorney to protect your rights.

    Remember, Max Gardner is still waiting for one legitimate foreclosure, where the documents are legitimate to payoff on a 10K bet that has been pending for 3 years with no takers. Still waiting. Another expert says 4% of the “loans” are legit, almost all of these are very new.
    We have criminal intent with 90% of all loans pending in our country, and I am being kind if it is truly 96% This is what you call organized crime. There is only one way to have organized crime this well organized.

  12. kbc249 says:

    The banks and their attorneys are committing fraud in the courts that goes way beyond robo-signing. They misrepresent & omit documents alleged to be exhibited in their foreclosure complaints and 1200+ page Summary Judgment Motions. They refused to provide the omitted imaginary documents after many months of demands for same. Their Motions are withdrawn after continued demands for the imaginary documents which purport to prove standing by an illegitimate successor.

    Entering into a modification legitimizes an agreement with an entity that does not own the debt and does away with the underlying defenses concerning the original fraud by the brokers and loan originators. All demands for discovery to prove defenses including compliance with the Fair Debt Collection Practices Act have been routinely ignored. In effect the new fraud in the litigation techniques of robo-signing and omitted nonexistent documents obfuscates the original fraud by the brokers and the loan originators which can only be proven through discovery. Discovery must be available as necessary prior to a modification or the banks will be allowed to succeed with fraud while the true party in interest privy to the original fraud is concealed. For unknown reasons which disfavor homeowners, the banks want to hide the fact that these loans have been securitized. They cannot or will not verify and validate the debt by producing endorsed promissory notes, assignments of mortgages, payment histories, escrow accounting, agreements between brokers and loan originators and copies of signed documents never provided at the closing, etc.

    A simple investigation will probably disclose that the fraudulent litigation practices extend far beyond the robo-signing by the banks.

    • wavpeac says:

      No doubt about this. Have witnessed it in my own loan, as have many others. They are working hard to keep this secret…but I have to say, little by little we are chipping away to the core of this. It will come out. I doubt however that there will be amends.

      Been sayin’ it for years now…and the macro level is about covered…we still have not gotten to the micro level of the individual and sheer numbers and intensity of the fraud. We are almost to the full disclosure…but not quite.