Part 3 of 4: Residential Mortgage-Backed Securities Working Group ...

... Is the Fix In?

This is the Third in a series of Four posts.  The series began on Insurance Claims and Issues Web Log on Monday, January 30, 2012 and continued on Insurance Issues and Bad Faith Law Blog on Tuesday, January 31, 2012.

   After HUD Secretary SHAUN DONOVAN had his meeting with Democratic Attorneys General in Chicago to try to convince them to settle with the Banks for their unknown liabilities from the Great Financial Fiasco (see post 1), the Illinois Attorney General joined the Residential Mortgage-Backed Securities Working Group.  However, she is not listed as one of the five (5) Co-Chairs appointed to run the Group, even in her own press release.  None of the press releases released to date clarify her participation.  See, e.g., Illinois Attorney General's Press Release, January 27, 2012, "Attorney General Madigan Joins National Mortgage-Backed Securities Working Group"; Jim Puzzanghera, "New Initiative Will Coordinate Probes of Mortgage Meltdown" (Los Angeles Times Online, January 27, 2012).

   The Attorney General of Delaware is the son of the Vice President of the United States.  However, Attorney General Biden has carefully crafted his statements about the Federal Residential Mortgage-Based Securities Working Group, and about the scope of the Great Financial Fraud settlement with the Banks that is so highly favored by the Administration of which his father is a member.

   Attorney General Biden has made it clear that he will support the Federal RMBS Working Group, and even participate in it, but his participation in the Working Group does not include participating in any settlement demanded by the Banks before the State investigations are concluded into what the Banks actually did, and for which they now demand immunity in a settlement.   See Interview of Delaware Attorney General Joseph "Beau" Biden, III with Dylan Rattigan, entitled, "DE AG Beau Biden:  Too Big to Fail Banks Believe The Enforcement Side is 'Scared'".

The "New Golden Rule":  "The One Who Has The Gold, Makes The Rules."

      Even if further staffing of the RMBS Working Group may include some State or other non-Federal employees, apparently the Federal Government will fund it.  See Edward Wyatt, "New Fraud Investigation Group Issues Subpoenas to Financial Companies" p. B3, col. 1 (New York Times Nat'l ed., "Business" Section, Saturday, January 28, 2012).

Not Participating, Yet, But Continuing to Pursue Investigations They Began Long Before the Federal Government's New Working Group.

   As of the beginning of this week, or as of Monday, January 30, 2012, there was no announcement, let alone a press release, about the Federal RMBS Working Group, on the websites of any of the three other State Attorneys General who have expressed reservations about, or withdrawn from the current Mortgage Servicer Fraud settlement talks with the Banks:

1. California;
2. Massachusetts; and
3. Nevada.

As noted, they filed lawsuits long before the Federal Government got around to releasing press releases about the new Federally headed Residential Mortgage-Backed Securities Working Group.

To be continued in the final installment of this series, on Insurance Claims and Bad Faith Law Blog.

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