Pittsburgh Legal Back Talk

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Are Bank of America and J P Morgan Chase, et. al. Accounting to Anyone for How They Spend Billions Appropriated to Save Homeowners from Foreclosure?

Posted By Cliff Tuttle | August 30, 2009

Posted by Cliff Tuttle (c) 2009

Here’s an interesting story, courtesy of DSNews.com, a daily email newsletter about the business of servicing defaulted mortgages.

About twenty one of the top twenty five participants in the Home Affordable Mortgage Program were big-time subprime lenders who were the originators of about one trillion bucks worth of high interest loans that nearly caused the economies of the word to . . . well, you know. A few of them have been forced to settle large suits involving chicanery committed during the subprime heyday or were closed or merged by regulators in its aftermath. Now the feds are giving this gang $50 Billion or so to fix what they broke.

So, B of A gets $6.9 Billion of “incentives” to modify mortgages with J. P. Morgan Chase and Wells Fargo not far behind. Fascinating, but is anyone verifying on an adequate scale that these lending giants are doing what they say they are doing? That means a large number of qualified individuals must begin reviewing files — millions of files. That also means asking questions and getting answers from people who may have something to hide.

I am willing to bet a month of lunches that there is no plan for adequate oversight of this activity. How could there be? What army of auditors has been mustered to do it? Don’t say federal bank examiners can do it in their spare time. They don’t have any. Not on this monumental scale.

When Billions are thrown around without controls in place, it is only a matter of time before the “F” word will start to circulate. It is inevitable. You’ll hear it in Congressional investigations, on the news and all over the country. So, why wait — we’ll say it out loud right now.




CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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