Foreclosure Settlement Lets Robo-Signing Crooks Go Free

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foreclosure crisisLast week, the attorneys general of all 50 states, together with federal regulators, proposed a 27-page settlement to the robo-signing scandal that triggered the foreclosure crisis. Predictably, the lending community responded with a distinct lack of enthusiasm to the terms. On top of that, on Wednesday, congressional Republicans sent a letter to Treasury Secretary Timothy Geithner raising "numerous objections" to the proposed settlement.

It appears that what congressional Republicans dislike about the settlement is that the settlement essentially amounts to a gigantic set of regulations for the mortgage-servicing industry. In the letter, the Congress-critters write, "The settlement would transform the mortgage-servicing industry and fundamentally change the rules that have historically governed relationships among borrowers, servicers and investors... The breadth and scope of the draft settlement proposal raise significant concerns about its effect on the financial system."

Speaking as a conservative Republican myself (it was obvious from my previous posts, right?), I can agree to these reservations. As it happens, I like quite a few of the reforms contained in the settlement, such as elimination of the "dual-track" problem. But if we want such reforms, they should be proposed, debated, passed by a frickin' vote of the legislators (what the heck do we elect you and pay you for?), signed into law by the President, and be the law of the land.

This back-door regulation-by-voluntary-settlement smells unto the high heavens.


But that isn't what has me outraged. No, what has me outraged is that the settlement does not deal with the criminal actions of those involved in the robo-signing scandal.

Let's be perfectly plain about what happened here. A bunch of people signed tens of thousands
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of affidavits alleging knowledge they did not have, could not have had, and never intended to get. Affidavits are not just some little email you send to a buddy. It is the equivalent of sworn testimony before a court of law. Knowingly filing a false affidavit is perjury, a serious felony, punishable by up to five years in prison.

Suborning perjury, getting someone else to commit perjury, is also a felony, also punishable by up to five years in prison. Some of these fake affiants, the robo-signers, had full-time jobs in which they blindly signed tens of thousands of false affidavits. Indeed, in some cases, companies had entire departments with multiple people who would sign off on false affidavits, even signing other people's names to them. You're telling me the bosses who hired these people and managed these departments were not suborning perjury?

And not one person is going to be prosecuted for these tens of thousands of felony crimes?

Republicans make an enormous stink about enforcing the nation's immigration laws, and claim they're not motivated by some sort of ethnic bias, but because they are about law and order. Lack of enforcement leads to disrespect for our laws and loss of sovereignty. Fine, I buy all that. So dear congressional Republicans, if you're going to oppose the settlement, let's see some consistency. Let's have it be because of the settlement's "effect on the legal system", instead of simply because of its "effect on the financial system".

If I, an average individual citizen, brazenly lie to the court in an affidavit, I go to jail or pay a huge fine or both. The prosecutor may be free to settle with me and not prosecute in exchange for community service or whatever. But judges, whose courtrooms have been violated by lies, tend not to look kindly on such things. Without truth to the best of one's knowledge, our entire legal system collapses.

Here we have a situation in which literally tens of thousands of felony perjury crimes, along with dozens if not hundreds of cases of suborning perjury, have completely hijacked our legal system to deprive people of their homes. But because the liars and perjurers work for giant banks and servicing companies, they're going to go scot-free in exchange for a few billion dollars of principal reductions and payment to some government fund to help deal with foreclosures?

Laws that are selectively enforced based on whether one has money or not are not laws at all. Stand up for our legal system, and demand that any settlement include guilty pleas for those responsible for thousands upon thousands of cases of perjury and suborning perjury. Without criminal prosecution, this settlement is a fraud upon our nation.

This is something that should outrage all Americans, of both parties, and of whatever belief you have about foreclosures, borrower responsibility vs. lender responsibility, or whatever.

Crimes have been committed; prosecute the criminals. Regulate the industry later through legislation by all means, but if the laws mean anything at all, prosecute the robo-signers. Fix the broken system, by all means, but prosecute the criminals.


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