SUBMITTED BY MARY MALONE

Reuters and all Americans need to know that the reason there have been no prosecutions is: Attorney General Eric Holder is implicated in the cover-up.

Before joining the Obama White House, Holder was a partner at the white shoe law firm, Covington & Burling, who represented MERSCORP.

In 2006 Covington & Burling wrote the legal opinion that justified MERS business model to the lending and title industries.(letter on scribd.com)

AG Holder effectively squashed all FBI investigations into actions of TBTF banks in 2008, when he arrived in office. No actions were initiated until the s#$% hit the fan in October 2010, when robo-signing scandal bubbled up in national media.

Then, Holder directed his top lieutenants, Covington & Burling alumnae all, to launch investigations into mortgage fraud. The FBI was told to partner with the Mortgage Banking Association, the trade group for TBTF banks.

The FBI, in partnership with MBA, created a definition of mortgage fraud which does not include banks. It narrowly focuses on consumers and flim-flam artists.

So, if the definition of mortgage fraud does not include banks, banks will not be investigated.

Instead, the Federal Government has partnered with the trade agency whose members committed $11 trillion heist to arrest the people who who defrauded by the banks.

Ain?t crony capitalism grand?

Posted on:
December 24, 2011

California Attorney General Kamala D. Harris filed suit against Fannie Mae and Freddie Mac on Tuesday, seeking to force the firms to answer a detailed list of questions after the firms’ federal regulator sought to block an open-ended inquiry by the state.

See the Lawsuits Against Fannie Mae and Freddie Mac

View Document

View Document

The lawsuits, filed in San Francisco County Superior Court, are the latest salvo by Ms. Harris against the mortgage-finance giants and their regulator, the Federal Housing Finance Agency.

Last month, the office issued subpoenas asking the firms to provide extensive answers to a range of questions about the mortgages they purchased and the foreclosed properties they own in California.

The FHFA earlier this month said it had directed Fannie and Freddie not to comply with the subpoenas, calling them “frequently vague and ambiguous,” and asked the attorney general to withdraw them, according to a letter included in Tuesday’s legal filings.

Among other things, the subpoenas asked for a record of every vacant home owned by the companies in the state and asked the firms whether they were aware of drug dealing, prostitution or the presence of explosives and radioactive material in those homes.

The FHFA said the state appeared to be “engaged in an open-ended exploratory investigation” that would undermine the FHFA’s authority while placing an extra burden on the operations of the firms. The effort required to collect the “voluminous amount of information” required to comply “would be nothing short of staggering,” the FHFA said in its letter.

Fannie and Freddie were taken over by the government through a legal process called conservatorship more than three years ago, and taxpayers are on the hook for at least $151 billion in losses.

Associated PressCalifornia Attorney General Kamala Harris’s action follows subpoenas.

The lawsuit sets up a battle over whether states can investigate the firms while they are under conservatorship by a federal regulator. In the lawsuit, the attorney general said the FHFA wasn’t within its rights to dismiss inquiries against private companies that operate in the state. Representatives for the companies and the FHFA declined to comment.

Ms. Harris has taken a leading role in pushing for greater scrutiny of the mortgage-market collapse. Many subprime-mortgage companies were headquartered in the state, and it has been among the hardest hit by the downturn.

Ms. Harris has also criticized Fannie and Freddie for resisting efforts to modify mortgages by reducing loan balances for borrowers who owe more than their homes are worth. Last month, she called on the FHFA’s acting director, Edward DeMarco, to “step aside” if he was unwilling to approve principal write-downs by the firms.

More

Developments: The lawsuits and mortgage-backed securities

Attorneys general have in the past succeeded in shaping policy by taking action against Fannie and Freddie, which guarantee more than half of all $10.3 trillion in outstanding U.S. home loans. New York Gov. Andrew Cuomo used his position as attorney general in 2007 to force the firms to overhaul certain appraisal guidelines that have since become the industry standard.

Ms. Harris remains a key figure in an effort by the Obama administration and state attorneys general to forge a $25 billion settlement with banks over foreclosure-processing abuses, but she has resisted the proposal, calling it “inadequate” for California homeowners.

Tuesday’s lawsuits also allege state agencies may have lost money as a result of misrepresentations by Fannie and Freddie over mortgage-backed securities they issue. The firms don’t make loans but instead bundle them into securities that are issued to investors, with guarantees to make investors whole if loans default. Fannie and Freddie’s huge taxpayer aid ensured that investors in those securities would be repaid.

Write to Nick Timiraos at [email protected] and Ruth Simon at [email protected]

Posted on:
December 24, 2011