COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary CLICK HERE TO GET COMBO TITLE AND SECURITIZATION REPORT

EDITOR’S COMMENT: Picking Cordray is like using pepper spray in the face of the Banks. Having him in as head of the agency will have long and rippling effects on the Banks as the extent of their fraud is revealed. Cordray was highly effective in Ohio as Attorney General long before the securitization scam was revealed to everyone. We can only hope that this is Obama’s first step at telling Congress that he is President and he will do everything in his power to allow investigations into past practices and to stop current fraudulent practices at the closing table, in court, and at auction of fraudulently foreclosed homes.

Defying Republicans, Obama to Name Cordray as Consumer Agency Chief



Doug Mills/The New York TimesPresident Obama will name Richard Cordray, center, director of the Consumer Financial Protection Bureau.

11:49 a.m. | Updated President Obama will challenge Republican foes of the newly created Consumer Financial Protection Bureau by naming Richard Cordray as its director while Congress is out of town.

Philip Scott Andrews/The New York TimesTestifying on Capital Hill in September, Mr. Cordray sought to reassure lawmakers that the bureau would be accountable to Congress, despite doubts expressed by Republicans that the bureau has too much unfettered power. .

That would allow the agency to establish new regulations over financial institutions, putting into effect elements of the financial regulatory overhaul that was one of the administration’s main achievements in Congress.

Mr. Obama’s exercise of constitutional powers to name top officials without Senate confirmation while Congress is in recess is a stiff challenge to Republicans, who have attempted to block the maneuver by holding “pro forma” sessions over the holidays.

Senator Mitch McConnell of Kentucky, the Republican leader, objected strenuously, saying Mr. Obama was overstepping the bounds of his executive power and leaving the agency open to legal challenges.

“Although the Senate is not in recess, President Obama, in an unprecedented move, has arrogantly circumvented the American people,” he said in a statement.

Mr. Cordray accompanied the president on Wednesday on a trip to Ohio, where the president is expected to deliver remarks on the economy at a high school in the Cleveland suburb of Shaker Heights. Cleveland is Mr. Cordray’s hometown.

Mr. Cordray looked a little shell-shocked when he got off Marine One to board Air Force One for the flight to Cleveland, clutching his brown folder to his chest as he walked to the plane.

But he sounded ready for battle once the plane landed in Cleveland and reporters cornered him under the wing, issuing a not-so-veiled warning to Wall Street.

“We’re going to begin working to expand our program to non-banks, which is an area we haven’t been able to touch before now,” he said.

The recess appointment represents a sharp departure from a long-standing precedent that has limited the president to recess appointments only when the Senate is in a recess of 10 days or longer. Breaking from this precedent lands this appointee in uncertain legal territory, threatens the confirmation process and fundamentally endangers the Congress’s role in providing a check on the excesses of the executive branch.

Jay Carney, the White House press secretary, called the recess appointment a “no-brainer,” and said that Mr. Obama would not be waiting around for Congress to act this year.

“He nominated Richard Cordray six months ago,” Mr. Carney said. “He won a majority of support in the Senate, yet Republicans refused to allow an up-or-down vote. This is a shame.”

He declined to speak about the legal and constitutional challenge which may be ahead, but said White House lawyers were confident. “When pro forma sessions are simply used as an attempt to stop the president from making an appointment,” then Mr. Obama was within his rights to move ahead.


32 Responses

  1. “I hope he spills the beans on some high-powered banksters ”
    Certainly would be a quick way to generate a list people—dates–places–conversations. If he is a contractor attorney firm, then the banksters as you put it would be able to invoke atty-client privilege –may have to take a convoluted route to get there? Maybe they need to start by denying he ran a lawful lawfirm for lawful purposes–and therefore was not acting as an attorney, since rules say attys cant do it— but as a mere agent-contractor with no privilege so he must sing

  2. I might suggest that you download the numbers —create sample accounts and run sensitivities—–somehow come to grips with the cash flow ——-past and projection——-may be falsly classed ending or any numbers————-infer by looking at them over time –what patterns emerge–can you condense it to a one page spreadsheet?

  3. Re: AG Cordray’s soundbite; “I will pursue these small non-lender banks who lead the race to the bottom”—a bit vague but I would like to interpret it that the inquiry will move beyond the huge banks regulated by OCC and Federal Reserve–the 14—-to the other even nastier sub-prime focused servicers. These are more inventive because they are not public and they dont have public investors looking over their shoulders–SEC filings and disclosures. This is a shadowy world where anything goes as long as cash comes in the door however. This is the type of corporate environment that fosters abuse of power, illegal practices and specific activity.

    This is indeed where he needs to focus to prevent the worst sorts of activities–with respect to entities that are generally otherwise unregulated. Some of the largest subprime servicers–non-lenders, owning only servicing rights–ie claims to proceeds of liquidation supposedly offset by fees. What happens if a servicer self-serves and errs in acctng —and gives cursory acctgs to a disinterested trustee. Naturally the servicer is going to maximize his up front cash out of the place–insurance claims, strip out fees/offsets, claim offsets and transfer the cash from trustee to servicer–conversion. This leads to the following sequence of events: servicer-preserver set up a “seize and freeze” plan; a house freezes and large claim made for destruction of the interior against the homeowners’ policy, then the servicer abandons if demolition cost exceeds the empty lot value

    The practice is effectively destroying low income housing–but the formula seize and freeze followed by dash with cash—works for any structure no matter how new and creates strong incentive to also destroy high value homes that saw big drops in value.

    These pattern facts need to be investigated, regulated, and adjudicated as to degree of predation–with referrals to criminal action in conjunction necessarily with DOJ. This is a huge undertaking needed in short order –worsened by the delays on the way. Lets hope the “inde” servicers get stiffer treatment than the big 14 under protection of OCC and Fed. Maybe the big ones decided to hang these small fry out to dry. make an example. They are unreguated.

  4. I am from Ohio, AG Dann preceeded AG Cordray. Dann initiated a program which resulted in complaints early on. It drew attention and was very nearly the earliest AG resistance to seizure operations in the most general sense. Cordray carried on after Dann. I think the best way to anticipate areas where you might see action–regulatory –but not enforcement, would be to look at what former AG Dann is doing in his private practice. Bottom line–these guys have been reviewing through staff thousands of cases–I think they can see patterns in those numbers. I think there are things done by inventive and predatory servicers [collection agencies], they have not yet discovered.

    The focus needs to be upon the damages incurred on the Accumulated predatory conduct from inception, predatory loan [ARM and other cliffs, illusory teaser rates, exagerated appraisals],

    The correlary impact on the [perhaps failed] trust’s MBS due to the misrepresentations in the SEC filings including significantly failure to file loan schedules. This converted the note pools into a MERS-like internal registry of ownership of notes–allowing for later double counting of notes, as between entities; trust vs servicer.

    If this is the case when looking at all sides of the homeowner-servicer-investor then obviously the servicer is “playing both ends against the middle”. The duplicated but unreconciled accts of a servicer vs the material apparently given to Moody’s for the trust MBS ratings seems an apparent misrepresentation, and proof of the distorted purposes of the servicer.

    subsequent unfair collection practices [eg induced defaults associated with mods and workouts, etc] ,

    unusual distribution of funds [servicer claims for fees vs net proceeds to passive trustee for investors], methods of liquidation of seized properties,

    On the servicer side again–Repetitive claims for default insurance/swaps on the same property? This sort of behavior indicates that it is the “handling” of default processes–even if for illicit purposes–that drives the behavior of the servicers. People are just “in the way” —

    The result is perhaps the purported trustee of entire trusts lack the authority to act on behalf of investors–and seize the investor interest in the proceeds at the same time as they seize and destroy homes–not just tossing out home-owners —but also intentionally destroying homes for casualty insurance proceeds and strip-the -house subplots by preservers.

    I think maybe Mr Dann is identifying specific trusts and servicers and is in some manner establishing a sort of co-op —I do not know exactly how, but i think it involves his entity taking an ownership interest in the seized or to be seized homes and leasing them to the homeowners—probably would be options to purchase–not simple because many need serious repairs [how to finance those and inject stimulus?]

    REO’s should be subject to attack, no title having invlved an unrelated party,
    Also subject to attack: 3rd party buyers with knowledge of defects in obtaining seized titles [no BFP because price was too good to be true]–

    The question is what to do with this shadow inventory–awaiting seizure to mitigate the continuing damage and interrupt it. Dry up the market for REO and former REO. Use Danns method to attack squatters’ possession where you have solid reason to believe that the seizure was unwarranted–later-acquired evidence–re-open facially flawed —already sold to flippers—-

    All the nasty acts through current should be weighted more than “did they have failed up front documentation” . The assignment forgeries were the tip of the iceberg on the downside of predatory lending–the aftershocks.

    Im a little fuzzy because its been a while, but I think that Mr Dann is attacking titles seized by a failed trust. I think the plan is to defend this class of

  5. iwantmynpv: Thanks for the tip-off on Cordray. Yves Smith had a comment from an insider on the scoop on Cordray in yesterday’s column: He’s a typical politician who will step on anyone to advance his own personal interests.

  6. Enraged: That is EXCELLENT news about David Sterns. Hope he goes to prison for a long time and loses his Bugattis and his “Su Casa es Mi Casa” (Your House is My House) yacht – yes, that is the actual name of ONE of his yachts. Corruption, gall, hubris and sociopathy; all traits of David J. Sterns.

    And I hope he spills the beans on some high-powered banksters and they get clawbacks of ill-gotten gains and take the perp walk. That’s probably too much to ask for, as this isn’t Iceland.

  7. @iwantmynpv- as a knowledgeable insider(former), could you please explain what the term “net overcollateralization proceeds” means, exactly. It is in the footnotes of a pool of mortgages,MBS,and the only info I found is in reference to CDOs. (fitch ratings prospectus) If this is a CDO pmt to the purported MBS/trust, what happens to the underlying collateral (notes,supposedly) following the receipt of payment? Do I just subtract the amt of the payment from the stated assets (notes) of the MBS, and then divide by the reported # of loans to see what remains. Or, what? Help!

  8. @leapfrog Cordray’s opening statements put him at odds with what what needs to be done. He said “I will pursue these small non-lender banks who lead the race to the bottom”

    The problem with his analogy is; the mortgage broker could only send paperwork down to the bottom to be met by a pool of money sitting there waiting for loans. The distributors underwrote the file and paid tremendous fess to their agents (mortgage brokers) to find unwary homeowners to fill the distribution void.

    Fixing the mortgage problem requires a complete change of the structure and conduit that allows many parties to feed off a loan prior to its final point of distribution.

    That is what causes american homeowners seeking credit to pay way up the ladder for mortgages.





  11. David Stern in much more hot water than originally thought. It may even become possible to hang a few bankers with what has been transpiring…


  12. Apparently, the OCC guidelines for “owners”, “servicers” and “trustees” are meaningless…


    We knew that.

  13. On Aug.5 2004 in Fountian Hills Az. This is the day my nightmare began.I went to Security Title in Fountian Hills to close on my first home with my wife .Life was realy different back then,we were happy as pigs in shitzoos. Not any more were not .You see New Centry Mortage lost our first mortage payment oh they chashed it but they failed to apply the funds to our account. Bla Bla Bla,First mortage payment default?????? Day one The saga of Hary Knutsack. anyone?What say you?

  14. Anonymous I agree. Ditch his Friends.
    I agree with Leapfrog’s first comment.


  15. Off-topic – sorry!

    Don’t know what happened to my other posts – but Nevada Supreme Court heard a MERS case today that will affect homeowners (one way or the other). Sure would like to know the outcome, but here is the scoop. Sincerely hope its score 1 for the homeowners and 0 for MERS.


  16. First Obama has to ditch his “friends.”

  17. davies910,
    Quote — “.e., where a mortgage servicer in the secondary mortgage market holds legal title to property that it is servicing on behalf of a purchaser of that property that does not publicly record its interest in the property.”

    Servicers do not hold legal title to anything. Unless, as a debt buyer, they acquire legal title. If they pass on payments, or property, they do not hold legal title. Already decided — by the Federal Reserve Opinion — now Rule to law. And, Congress voted the TILA Amendment to the law, by which the Fed Res Res Opinion is now law, in to law.

  18. Something is not right with this picture. Obama is a “good guy” from this move? But the behavior is possibly an illegal move. How can that Ever be good?

  19. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, CORDRAY, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

    January 4th, 2012 | Author: Matthew D. Weidner, Esq.
    This really is a MUST READ lawsuit. A MUST READ for every single judge, judicial assistant and court staff who has labored under the recklessness and lawlessness of the whole fraudclosure debacle. Law enforcement should read all these allegations. Regulators and Congress should read all these allegations.

    The allegations are not even close to anything like new information….down here in the trenches we’ve been screaming about them for quite literally years and years and years.

    And all we get is a shrug of the shoulders….ok so occasionally we get attacked, threatened….and always dismissed…..


    Well we should all care. We will all eventually. At some point in time there will indeed be a horrific day of reckoning for all of this……what side were you on?



  21. @Louise ,

    I think you are right ,, but we may not see any direct help before the next election ,, I think it’ll be held out like a carrot… I also think if we see anything it’ll come from the courts and not congress … hopefully Obama will set things in motion in the legal system to help the victims of Wall Street … which will probably mean the actual funders of the “banks” and we will be helped by having the true accounting information available. Obama has the banks under his thumb and can crush them at will with reserve requirements … simply adjusting the mark-to-fantasy accounting standards… My prediction is that the top execs retire to the Caymans with $BILLIONS ,, and the carcasses of the BofA’s and WF’s , BoNY’s and the rest are divided and sold off to the super regionals.

  22. Has anyone read this Summary Judgment Opinion. Adversary Re: Wells Fargo vs. Mortgage Lenders Network.

    The House and Senate committees issued a joint explanatory statement once they settled on language for § 541(d). The joint statement said:
    The seller of mortgages in the secondary mortgage market will often retain the original mortgage notes and related documents and the seller will not endorse the notes to reflect the sale to the purchaser. Similarly, the purchaser will. often not record the purchaser’s ownership of the mortgages or interests in mortgages under State recording statutes. These facts are irrelevant and the seller’s retention of the mortgage documents and the purchaser’s decision not to record do not change the [bankruptcy] trustee’s obligation to turn the mortgages or interests in mortgages over to the purchaser. . . . Under section 541(d), the trustee is required to recognize the purchaser’s title to the mortgages or interests in mortgages and to turn this property over to the purchaser. It makes no difference whether the servicer and the purchaser characterize their relationship as one of trust, agency, or independent contractor. The purpose of section 541(d) as applied to the secondary mortgage market is therefore to make certain that secondary mortgage market sales as they are currently structured are not subject to challenge by bankruptcy trustees. . . .
    COLLIER at 2559-60. (emphasis added). An ownership interest following a foreclosure is obviously the product of the mortgagee’s ownership interest in the mortgage. MLN’s position flies in the face of the Congressional intent embodied in § 541(d).
    Congress enacted § 541(d) to apply to this very type of case — i.e., where a mortgage servicer in the secondary mortgage market holds legal title to property that it is servicing on behalf of a purchaser of that property that does not publicly record its interest in the property. COLLIER at 2559-60. Under § 541(d) the bankruptcy trustee has an “obligation to turn the mortgages or interests in mortgages over to the purchaser” despite the purchaser’s failure to publicly record its interest in the property. Collier. at 2559-60. MLN’s position is quite simple: an owner’s failure to record an interest in property involved in a secondary mortgage market transaction, or a debtor/servicer’s recording of legal title to the property in its own name, allows a trustee or debtor in possession to avoid the owner’s equitable interest and bring the property into the estate for the benefit of the estate. That position is in flat contradiction to the intent of § 541(d). The following admonition of the Supreme Court seems appropriate here: “Statutory interpretations, which would produce absurd results are to be avoided, if alternative interpretations consistent with the legislative purpose are available.” Griffin v. Oceanic Contr…..



    380 B.R. 131 (2007)

    Mortgage Lenders Network USA, Inc., Plaintiff,
    Wells Fargo Bank, National Association, and Wells Fargo Home Mortgage, Inc., Defendants.
    Bankruptcy No. 07-10146 (PJW). Adversary No. 07-51683 (PJW).

    United States Bankruptcy Court, D. Delaware.

    December 11, 2007.

  23. That a boy!!!

    About time our Prez ignored our useless and paralyzing Congress. They’ve proved themselves. Now, let see if Obama will follow through with prosecutions of banks, with or without Congress!

  24. I would be remiss to not remind everyone that a couple of weeks ago the OBAMSTER was saying “what the Wall Street did may have been highly unethical, but not illegal”. This guy will continue to talk out of both sides of his mouth to satisfy whoever is listening at the time. Don’t make the mistake of looking to this guy to solve anybody’s problems. HE IS THE PROBLEM!

  25. Shelley, I absolutely hope you are right and I am wrong. But as the comedian Gallagher says, “I’ve played buffet before.”

  26. http://www.youtube.com/watch?v=o0RfW1lUudY

    This appointment is a smoke and mirrors move! This will prevent anyone from suing the BANKS! Hence foreclosure fiasco solved for the President and BANKS!!!

  27. I hope this new crew can have impact beyond carving out turf. Whenever I have analyzed, reviewed, investigated a situation—as often as not I have found more than one anomoly. Eg–you find your assignment was forged; well good chance something else is wrong too—–or three or four—ideed an entire course of conduct.

    The problem with federal agencies is that there would be several with an interest to enforce—and when the jurisdiction to enforce is chopped up—the current agency sees everything else with blinders on—you will spend more time talking with them about why they cannot do something because of jurisdictional matters.

    They dont talk—they dont share—they dont even use the same terms and codes. The ONLY way they can cut to the RICOs is a joint interagency tactical center—that consolidates all mortgage and related matters–if they are able to interract they will be effective–if they wont–they are just pr. it probably would require a presidential order—the jurisdictional agencies should give three year assignments to the joint crew –hosted by this consumer protection group–with a couple hundred million dollars plus penalties they can keep up to 10%–something like that can/might be done in a new agency

  28. LETS HOPE HE IS NOT NEUTERED! There is a God and I believe in miracles.

  29. Obama may be in a dead heat for the presidency. He is going to have to go after the banksters to “fix” the economy. It should be Jubilee Year and debts forgiven. No debts equals booming economy. Obama is not a shoe-in if he does not do something about the ripoff mega banks.

  30. It’s about time.!!!! let’s rumble in the financial jungle.

  31. “Although the Senate is not in recess, President Obama, in an unprecedented move, has arrogantly circumvented the American people,” he said in a statement.

    Let me fix that for you, Mitch ‘The Turtle’ McConnell: “…has arrogantly circumvented the Wall Street banksters.”

    and its a little too little too late for Obama to “come out of hiding”. This is some token nomination and my bet is that Cordray will be appropriately ‘neutered’ from causing any harm to the banksters.

Leave a Reply

%d bloggers like this: