Observer » attorneys general

Elizabeth Warren Rustles Up AGs for Dodd-Frank Posse

Mike Taylor — Thu, 02 Dec 2010 15:13:08 -0400

Consumer Financial Protection Bureau queen-designate Elizabeth Warren is turning to the 50 state attorneys general for help in her campaign to make financial services work for the little guy.

Bloomberg reports:

The attorneys general say they are now invited to the nation's capital and talk with Warren by telephone almost weekly as she sets up the Bureau of Consumer Financial Protection. On Nov. 30, Warren traveled to Fort Lauderdale, Florida, to plot strategy at the prosecutors' winter meeting.

Ever since the foreclosure crisis went nationwide and attorneys general from all 50 states have been treated by the press as a monolithic enformecment entity (probably partly because it's intellectually gratifying to show off that you know it's not "attorney generals"). It's been fun for us to think of them as this pack of trained animals that one can unleash on the financial service industry, and apparently Elizabeth Warren feels the same way.

mtaylor [at] observer.com | @mbrookstaylor

Here’s How Serious the Attorneys General Are About the Foreclosure Crisis

Mike Taylor — Mon, 01 Nov 2010 17:45:24 -0400

The Wall Street Journal today published a snapshot of what life is like for our nation's 50 attorneys general, who've now banded together to get to the bottom of apparent legal shenanegans by America's largest mortgage lenders. And this posse of skull-cracking legal enforcers -- a gang of hard-nosed and aggressive untouchables -- is, in the name of justice, making some very tough decisions:

Already, there are signs that state officials are working together closely to gain more leverage over companies such as Bank of America Corp., Wells Fargo & Co. and J.P. Morgan Chase & Co.

Yet there also was a squabble over what to call the investigation, with some state officials preferring "inquiry" and others the word "effort."

If the attorneys general continue to busy themselves by nitpicking over the proper label for what it is they're doing, perhaps a few years from now, the correct term will become obvious: "nothing." Meanwhile, a less-than-vengeful course of action appears to be in the works:

Some bankers, lawyers and other participants in early discussions related to the investigation say Mr. Miller's leadership role suggests that state attorney generals will push hard for a sweeping settlement. One potential scenario: mortgage modifications that allow homeowners to stay in their houses.

"One possibility is that instead of having the companies pay huge fines for what they did, they use the money to fully fund the modification process," Mr. Miller says. "They don't have enough resources in the modification process-people don't hear for months, documents get lost."

mtaylor [at] observer.com | @mbrookstaylor

Bank of America Gets Its Own Attorney General

Mike Taylor — Wed, 27 Oct 2010 21:06:45 -0400

Faced with a legal onslaught by a team of attorneys general hailing from every state in the nation, Bank of America is taking a cunning step.

The nation's heavyweight mortgage-servicing champ is bringing former Virginia attorney general Richard Cullen into its corner. Just when you thought there couldn't be any more attorneys general involved!

Is Cullen some kind of bank-defending turncoat -- a mole hand-picked by BofA for his attorney general-like attributes? Reuters reports:

Cullen has already been communicating with the offices of various state attorneys general, according to a source familiar with the investigation.

"Communicating," eh? Sounds fishy.

Whether or not Cullen is attending attorney general five-year reunions to get the latest AG dish on the joint investigation in to shady foreclosure practices, there's little doubt that he's a formidable legal mind. The man headed up George W. Bush's legal team during the 2000 Florida recount, and helped Tom DeLay duck federal charges.

Despite (or perhaps because of) his impressive resume, Bank of America ought to be careful. He could, after all, be a double agent -- revealing dramatically in court: "Fools! I was working for the attorneys general the whole time!"

mtaylor [at] observer.com | @mbrookstaylor

Wells Fargo Pays Big Money to Make Mortgage Investigation Go Away

Mike Taylor — Wed, 06 Oct 2010 21:01:42 -0400

Giant bank Wells Fargo announced today that it's paying $24 million "to eight states to enlist help in customer outreach, and to prevent or mitigate the impacts of foreclosures in these communities." It's doing this because the states in question -- Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington -- are investigating Pick-a-Payment mortgages originated by Wachovia and Golden before their merger with Wells Fargo in 2008.

The mortgages, also known as payment-options adjustable rate mortgages, allowed borrowers to choose their monthly payments. Some borrowers would make payments that were insufficient to cover the interest on the mortgages, allowing the overall loan to increase over time. Nevada has charged that Wachovia and Golden West's marketing of these loans was a breach of its Deceptive Trade Practices Act, because the lenders didn't make it clear that the minimum payment would leave borrowers even deeper in debt.

Dow Jones Newswires reports that the company will offer to modify loans for 8,715 borrowers, for a total of $772 million in mortgage relief.

mtaylor@observer.com

Twitter: @mbrookstaylor