Timmeh Geithner to House of Representatives: Fuck Off And Die

A month ago, Brad Miller and a dozen other Congressmen — including House Financial Services Committee Chair Barney Frank — wrote the Financial Stability Oversight Council to ask that they look into the systemic dangers of foreclosure fraud. The letter requested that three very specific things be included in upcoming stress tests and overall consideration of the systemic threat this represents to the economy:

  1. Examine random collateral loan files to see if they include all required documents, notably the note, the mortgage, and documents recording the assignment of the mortgage
  2. “Examine the servicing of first mortgages by servicers that hold second liens … [as some people contend] there is an indefensible conflict of interest for servicers of securitized first mortgages to hold second liens on the same property”
  3. Consider using the authority of Dodd-Frank to “require that financial companies divest affiliates or other holdings involved in servicing securitized mortgages”

Timmeh Geithner just responded to that letter. His response makes it clear he actually read Miller’s letter — because he references the first item I’ve laid out above, though rather than actually respond to that request, he describes what the FSOC is actually doing instead of examining collateral loan files. His response to the second and third requests is even more insolent; he refuses to even repeat the second one, and rather than consider either one seriously, he just says FSOC will take action “if abuses are found.”

Here is Timmeh’s response to Miller’s request that the Council examine random collateral files:

With regard to your suggestion of examinations of financial institutions by FSOC member agencies, these reviews are currently ongoing as part of a foreclosure task force formed by the Administration in early September.

[snip]

The main objectives of the task force are to determine the scope of the foreclosure problems, hold banks accountable for fixing these problems, protect the homeowners, and mitigate any long-term effects this misconduct could have on the housing market.

Note that even though Timmeh admits the banksters have engaged in “misconduct,” he makes no mention of holding them legally accountable. Instead, he simply repeats the Administration line that banks will “fix[] these problems.”

But rather than address Miller’s specific request — that investigators look at random collateral files — Timmeh describes how the investigators will examine other things, and then boasts of the (inadequate) number of investigators on the job.

Regulators are conducting onsite investigations to assess each servicer’s foreclosure policies and procedures, organization structure and staffing, vendor management, quality control and audit, loan documentation including custodial management, and foreclosure prevention processes. The task force is also closely reviewing related issues that include loss mitigation, origination put-backs, securitization trusts, and disclosure put-backs.

These examinations are extensive and resource intensive. For example, the Office of Thrift Supervision has approximately 80 examiners on-site at their four servicers, and the Office of the Comptroller of the Currency has 100 examiners at the top eight national bank servicers.

Now granted, some of the things the FSOC is investigating might cover Miller’s request. “Loan documentation including custodial management” might get at the issues Miller specifically requested FSOC examine. But Timmeh makes absolutely no promise that these 20 examiners per non-bank servicer or 8 examiners per bank servicer (Really, Timmeh!?!?! You think 8 people can investigate Bank of America’s morass?!?!) will actually look in detail at the actual loan files, much less a randomly selected collection of loan files.

That’s enough of a non-answer.

But here’s how Timmeh summarizes Miller’s two other requests.

You also suggest that the FSOC consider the potential risk associated with the role of large financial institutions in the servicing of mortgages and to consider requiring these firms to divest of their servicing affiliates.

Note what phrase Timmeh doesn’t utter there?

“Second lien.”

That little matter of the half a trillion dollars in conflicted exposure these banks have, which goes to the heart of the reason this is systemic issue.

In fact, Timmeh doesn’t utter the phrase “second lien” anywhere in his letter. It is, apparently, the elephant in the bank vault that shall not be named, for fear Timmeh would have to acknowledge the magnitude of the problem. Timmeh apparently wants to spin the problem of second liens as nothing more than part of the size of the institutions in question, and not the very real conflict of interest that provides motivation for all the foreclosure fraud Timmeh doesn’t want to criminally prosecute.

And while Timmeh does use the word “divest,” here’s his actual response to Miller’s description of the very real and very avoidable problem of having the banksters service the loans that threaten to expose their insolvency.

As you suggest, the Dodd-Frank Act also provides the FSOC, and its member agencies, with a variety of tools to recommend heightened prudential standards and take other remedial actions when necessary for financial stability. With that in mind, the FSOC and its member agencies will remain critically focused on working with the foreclosure task force, and will use all appropriate authorities available to them if abuses are found.

So while Timmeh can manage to at least utter “divest” (unlike his apparent allergy to “second lien”), when push comes to shove, he won’t admit that FSOC has the ability to force bankster to divest of a part of their business. More importantly, he envisions using the power granted him under Dodd-Frank (and remember, Frank is one of the recipients of this letter) only “if abuses are found.”

Because it would be too much to ask for Timmeh actually take an obvious proactive move to fix one of the problems weighing down our housing market and with it our entire economy. I guess if he did, he might actually have to think about those second liens he’s refusing to acknowledge.

image_print
38 replies
  1. willaimbennet says:

    If he gets tired of writing “wouldn’t be prudent- not at this juncture” letters I’m sure orzag can find him something to do in the real government.

  2. BoxTurtle says:

    It’s time for congress to subpoena his butt, question him directly under oath, and follow up the questions he obfuscats upon.

    THEN we can write him a Sternly Worded Letter. That’ll teach him!

    Boxturtle (Willing to bet that the House chooses to accept his reply as fulfilling their requests)

      • BoxTurtle says:

        I think he clutched his pearls and nearly fainted when he read the phrase “under oath” in relation to Geltner.

        Either that, or he’s STILL laughing.

        He knows the new committee won’t press him on this issue at all. They’ll be much more interested in Obama’s connections to bailed out banks.

        BoxTurtle (Frankly, I’m expecting the new congress to ask ObamaLLP a number of interesting questions)

    • Larue says:

      GOOD on ya . .

      Hmm . . . there’s another thought . . .

      OT: Can someone compile a list of email contacts for folks who might read a proggy email?

      Then, it’s only a click or 10 away to send a thought like yers to LOTS of sources.

      I, as an FDL supporter, could put them linkys into my email bookmarks folder . .

      N just click or two, to send to many folks, when and if, I have a thought as good as yers.

      N yers is a good thought.

      I’d be more active if I had that tool . . . anyone?

      Heh, I’d want White House emails and dim and gop emails in that list, too.

      House AND Senate . . .

      Imagine if, all of a sudden, all them entities were getting oh, a few hundred emails daily?

      About our discontent?

      I dunnah, I’m just thinking, I’d really want to use that tool . . .

      Pups? FDL?

      • bobschacht says:

        Can someone compile a list of email contacts for folks who might read a proggy email?

        You could start by using the “Spotlight” feature at the end of the top post.

        Bob in AZ

  3. readerOfTeaLeaves says:

    Well, if

    As you suggest, the Dodd-Frank Act also provides the FSOC, and its member agencies, with a variety of tools to recommend heightened prudential standards and take other remedial actions when necessary for financial stability. With that in mind, the FSOC and its member agencies will remain critically focused on working with the foreclosure task force, and will use all appropriate authorities available to them if abuses are found.

    became

    As you suggest, the Dodd-Frank Act also provides the FSOC, and its member agencies, with a variety of tools to recommend heightened prudential standards and take other remedial actions when necessary forin order to restore financial stability. With that in mind, the FSOC and its member agencies will remain critically focused on working with the foreclosure task force, and will use all appropriate authorities available to them, including federal law enforcement, each time if abuses are found.

    then I might believe there was a glimmer of light in a very dark tunnel.

    • jdmckay0 says:

      B of A responds by trashing his credit reports

      Strikes me as appropriate that “Bank of America” is so named… that this type of stuff is more or less precisely their methods and mission.

      BANK OF AMERICA: the new reality.

      Also strikes me the absurdity of judge what’s his name, at even dumber repub “lawmakers” (and law “enforcers”) shooting down Obama care on “constitutional over reach” grounds related to “freedom” from mandated HC insurance, while same crew unashamedly legalizes cover for the bank’sters holding American by the balls and twisting as needed.

      Absurdity is in good abundance here these days.

    • Larue says:

      Fully agreed.

      I’d add judges and politicians, lobbyists, political staffers, lobbyist staffers. Corporate employed folks with malfeasance in their work.

      Dang, my list will ensure that the amount of those who are white and incarcerated in our prisons would IMMEDIATELY outnumber all them other non honky folks we presently incarcerate for weed, dissent, stealing food for family or self . . . petty crimes.

      Time for a largesse of early release of petty crimes.

  4. 4cdave says:

    They’re still trying to pass this off as a few, isolated paperwork issues that need to be cleared up, but the banks really do own all those mortgages and can really foreclose and the system is fundamentally sound it just needs a little tweaking by well-intentioned businesses. They will not publicly admit that the system is borked and that if you bought a home in the last decade you probably don’t have clear title.

    • Larue says:

      That last line in yer comment, and the last half of that line should scare the BeeHeysoos outta millions of ‘mericans . . . not to mention, be the key (along with second liens) to anyone interested in really investigating this mess.

      GREAT catch . . . along with the collapse of the housing bubble (till they mark to market and eliminate derivatives debt from compiled useless bundles and force bank closures and breakups) and the upcoming commercial real estate bubble collapse (same as housing, crooked dealings and paper who OWNS those strip malls and office clomplexes?), 2011 is gonna get real ugly.

      Course, I’m channelling Hugh on this . . . bless him.

      Havent heard from him here at The Lake for a while, hope he’s ok.

  5. ducktree says:

    the Office of Thrift Supervision has approximately 80 examiners on-site at their four servicers, and the Office of the Comptroller of the Currency has 100 examiners

    Aren’t these the same folks who just got their payrolls frozen for the next couple years by President Zero Sum? Or could they be private contractors from Xe perhaps? (:>

  6. OldFatGuy says:

    the FSOC and its member agencies will remain critically focused on working with the foreclosure task force, and will use all appropriate authorities available to them if abuses are found.

    IF abuses are found? The only way abuses won’t be found is if you’re not looking.

  7. onitgoes says:

    Great post. Nothing will change; the banksters won, won big time, and Timmeh continues to carry water for them. it’s Timmeh’s job that Obama & the Oligarchs hired him (and pay him handsomely) to do.

    And so: on it goes…

    • Cynthia says:

      Between the war profiteers draining us of blood and treasure, and the FIRE economy parasites driving us into indentured servitude, our chances of dodging the shock-doctrine bullet are next to nil, I’m afraid.

  8. alan1tx says:

    In summer, 2010, Geithner “is President Obama’s point man in opposing the extension of the Bush tax cuts for the wealthy after their Dec. 31 expiration. … [Geithner] has cited the projected $700 billion, 10-year cost of the tax cuts, and nonpartisan analyses that they do not stimulate the economy because the wealthy tend to save the additional money rather than spend it. ‘I believe there is no credible argument to be made that the purpose of government is to borrow from future generations of Americans to finance an extension of tax cuts for the top 2 percent,’ [he] said in a recent speech.”

    I’m not familair with “Timmeh”. Is that FDL baby talk like “banksters” or did that come from some other pop culture reference I don’t get?

  9. mlmc says:

    The Obama administration is consistent. They really do think they are smarter than other Democrats. In this they act like undiluted Republicans.

  10. Larue says:

    Marcy Wheeler Rocks!

    Thanks, ma’am, for this one and digging deep and then ‘splainin it to us layfolks.

    Now that I get it . . . I got one short thought.

    Them effing bastids.

    [email protected] . . . yer KILLIN me!!!

    *G*

  11. jpe12 says:

    meh. If Congress wanted those specific things addressed, they could’ve put in Dodd-Frank. They didn’t, so Timmy has discretion over how the investigations proceed.

  12. bobschacht says:

    Willing to bet that the House chooses to accept his reply as fulfilling their requests

    The Democratic House, maybe. But do you think in January the Republicans will accept his reply with the same equanimity?

    It’s a tough call, though. By being tough on Geithner, Republicans would risk being tough on their financial bosses.

    Bob in AZ

  13. jdmckay0 says:

    And tangentially (parallel) related: dissenting repubs on the (cough) “Financial Crisis Inquiry Commission” have been busy scrubbing their online bios.

    Here and here.

    From latter link (Riholtz):

    Peter Wallison, currently a member of the Financial Crisis Inquiry Commission, was also the co-director of AEI’s Financial Deregulation Project, along with his co-director, Columbia professor Charles Calomoris.

    Over at Calomoris’s bio, his status as co-director of AEI’s Financial Deregulation Project is the first sentence;

    Not so on for his co-director Wallison. Indeed, any reference to his participation on the Financial Deregulation Project is gone from Wallison’s AEI bio. Instead, the language has been replaced with the more benign “codirector of AEI’s program on financial policy studies.”

    and Colomoris’ bio seems a bit “proofed” by the AEI liar detection editors:

    Calomiris and several family members owned a substantial chunk of Greater Atlantic, a savings and loan founded in 1997 that grew to five branches. So why doesn’t AEI want the public to know that the co-head of its Financial Deregulation Project was the chairman of the board and part-owner of a publicly held bank? That would seem like the type of solid, real-world credential that would lend real legitimacy to a think tank’s policy efforts. Could it be because Greater Atlantic failed on December 4, 2009, costing the Federal Deposit Insurance Fund $35 million?

    Would be fun to assemble video of all Delay’s K-St guys’ speaches at AEI over the years, as that was maybe the most visible ass kissing venue for the whole corrupt crew tripping over themselves to appease this AEI “Financial Deregulation Project”.

Comments are closed.