Holder, Breuer connected to players in foreclosure fraud?

posted at 10:25 am on January 20, 2012 by Ed Morrissey

For years, the Left has asked why the Obama administration hasn’t pursued prosecutions against lenders who arguably engaged in fraud when foreclosing on mortgages in the wake of the housing-bubble collapse.  It turns out that these lenders had friends in high places in the Department of Justice.  Reuters reports that both Attorney General Eric Holder and his lieutenant Lanny Breuer, who ran the DoJ’s criminal division, were partners in a law firm that worked on behalf of those very same firms (via JWF’s Just A Grunt):

U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.

The firm, Covington & Burling, is one of Washington’s biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.

Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmaler said Holder and Breuer had complied fully with conflict of interest regulations, but she declined to say if they had recused themselves from any matters related to the former clients.

Holder and Breuer aren’t alone.  Reuters lists a couple more former Covingtom & Burling associates at the DoJ that have since returned to their law practice, including Holder’s deputy chief of staff John Garland and Breuer’s deputy chief of staff Steven Fagell.  The law firm itself lists almost two dozen former attorneys now working in the DoJ and another dozen in US Attorney offices around the country.  That’s quite an impressive footprint of influence for Covington & Burling, and a valuable one for its clientele.

It’s not as if the fraud was particularly esoteric, either.  Reuters began its own reporting on massive numbers of forged endorsements, part of the robo-signing scandal that halted foreclosure processing for more than a year.  Those forgeries got submitted to courts on many occasions as part of the foreclosure process.  Despite this, Holder has done nothing — at least publicly — to press an investigation into these forgeries, and as Reuters reports today, more are on their way:

Recent calls for a wide-ranging criminal investigation of the mortgage servicing industry have come from members of Congress, including Senator Maria Cantwell, D-Wash., state officials, and county clerks. In recent months clerks from around the country have examined mortgage and foreclosure records filed with them and reported finding high percentages of apparently fraudulent documents.

On Wednesday, John O’Brien Jr., register of deeds in Salem, Mass., announced that he had sent 31,897 allegedly fraudulent foreclosure-related documents to Holder. O’Brien said he asked for a criminal investigation of servicers and their law firms that had filed the documents because they “show a pattern of fraud,” forgery and false notarizations.

I suspect this information will animate the Left against Holder much more than Operation Fast & Furious, but both need extensive investigation.  Perhaps this will be the straw that broke the camel’s back and convinces Barack Obama to get a new Attorney General.  If not, Republicans and Democrats alike will have plenty of opportunity to ask Obama why his Department of Justice seems more interested in cover-ups and political machinations than in law enforcement.


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Comment pages: 1 2

I can’t get too worked up about these “fraudulent” robosigned documents until it is shown that large numbers of them were inaccurate or were otherwise improper. Did they result in large numbers of foreclosures that were not legitimate? If so, then there’s a real problem. If not, it’s a technicality.

JayDick on January 20, 2012 at 11:57 AM

There is no such thing as a ” technicality”, that wouldn’t have attached to that technicality, some legal effect, particularly to a Judge who can rule on process, what’s allowable evidence and what is legitimate evidence and or proof/testimony/documentation. In law, perfection relates to the additional steps required to be taken in relation to a security interest in order to make it effective against third parties and/or to retain its effectiveness in the event of default by the grantor of the security interest.

This is NO small matter or mere ” technicality”.

The real fraud was in the mortgage applications where people knowingly entered all kinds of false information and in rating these mortgages and the bonds based on them as AAA.

JayDick on January 20, 2012 at 11:57 AM

No, you have missed the point. You have presumed that all lenders were NOT greedy. There were many and many of them are out of business.( Think Angelo Mozillo) There were many types of mortgages , specifically ARM mortgages which allowed buyers to finance properties that would, under conventional mortgage guidelines be outside of income,current liabilities ( aka ability to pay )guidelines. The problem was that the banks never checked the information in application documents for legitimacy. This however , is the fallacy of our financial and banking system. Banks ,like WaMu, were actually selling tranches from those mortgage pools as investments, rated AAA, with 13 % delinquencies, knowingly. This was rampant and the government denied it was happening. It happened because Fannie Mae and Freddie Mac were “allowed” by politicians who feed their campaigns, to be lenders of first resort instead of GUARANTEEING the banks their money. This was AND IS a risk free proposition for banks because the government backstopped these activities with taxpayer guarantees.

Thus, taxpayers were placed on the hook for these problems. And in the process, lost property value as well.

DevilsPrinciple on January 20, 2012 at 1:01 PM

And both sides are complicit…a lot of Republicans were for this, which is why no one has been brought to any justice, let alone even been investigated.

right2bright on January 20, 2012 at 12:44 PM

Yep. Although, full credit where due – something a lot of people still don’t do – there were PLENTY of people in the Bush admin that were sounding alarm bells and everyone ignored them.

I don’t like standing up for the Bush admin any more than most of us here – but when it comes to this stuff – they were right all along and still catch all of the blame in the MSM.

CycloneCDB on January 20, 2012 at 1:08 PM

There should be so many indictments in this administration, they should be robo-signed.

/

Christien on January 20, 2012 at 1:09 PM

Yeah right, the Dept of Justice serving themselves indictments!?! For a very long time now DoJ just serves themselves and the Jack@$$-In-Chief’s adninistration. So screw the folks.

Colatteral Damage on January 20, 2012 at 1:18 PM

So first he actively protects those under investigation/prosecution for election fraud, then he illegally exports firearms to international criminals and now he’s tied to massive foreclosure fraud? If he was white I’d say it was time for somebody to get a rope.

Browncoatone on January 20, 2012 at 1:29 PM

Most corrupt administration, evah!

GarandFan on January 20, 2012 at 1:41 PM

herm2416 on January 20, 2012 at 11:24 AM

Maybe but then the media would be going harder at it. If Republicans are involved with wrong doing, they must go.

Cindy Munford on January 20, 2012 at 11:28 AM

Yes, the media would go after Reps guns blazing….but, if that were to take out a few major Dems, is it still a desirable situation to go after the Reps? I agree, if people from both parties are complicit they should be forced to go, but the MSM doesn’t think that way–they protect Dems at all costs.

herm2416 on January 20, 2012 at 1:46 PM

There should be so many indictments in this administration, they should be robo-signed.

/

Christien on January 20, 2012 at 1:09 PM

Heh.

Nom de Boom on January 20, 2012 at 1:53 PM

Perhaps this will be the straw that broke the camel’s back and convinces Barack Obama to get a new Attorney General.

More likely he will double down on Holder. People with his personality profile are never wrong you know.

FireBlogger on January 20, 2012 at 3:44 PM

I suspect this information will animate the Left against Holder much more than Operation Fast & Furious, but both need extensive investigation

I guess a .001 is more than a .000 on the scale from 0 – 10; and an infinite increase (depending on how you divide by zero) could be considered “much more” … but it doesn’t really move the needle off “no action will be taken”.

I’ll be pleasantly surprised if the Left makes any mention of this at all, and prepare my “told you so” comment for what I consider the likelihood that they do nothing.

I’m not feeling like I’m going to be pleasantly surprised… but I’ll grant it is mathematically possible.

gekkobear on January 20, 2012 at 11:48 PM

Comment pages: 1 2