Firm commentary:  The Obama administration is pushing hard to ensure that banks get a sweet heart deal from state attorney generals in the robosigner investigation.  New York, Delaware and Nevada Attorney Generals are pushing back...and catching grief.  New York Attorney General Eric Schneiderman  was removed from the lead committee by Iowa AG and bank industry supporter Tom Miller.

California AG Harris needs to get in line with New York Attorney General Schneiderman and investigate and prosecute the robosigner industry.  The scope of the fraud is vast...especially in California.  Theses practices are an assault on the state property rights and damage the integrity of our legal system. 

To allow theses practices to go unpunished, given the suffering and losses caused by these lenders...would be a breach of duty.  The People of California deserve a full investigation.

http://www.huffingtonpost.com/2011/08/23/new-york-attorney-general-eric-schneide\
rman_n_934517.html

WASHINGTON -- New York Attorney General Eric Schneiderman on Tuesday was kicked
off the committee leading the 50-state task force charged with probing
foreclosure abuses and negotiating a possible settlement agreement with the
nation's five largest mortgage firms, according to an email reviewed by The
Huffington Post.

Schneiderman was one of roughly a dozen state attorneys general leading the
talks with the five companies, alongside representatives of the U.S. Department
of Justice, the Department of Housing and Urban Development and other federal
agencies. The government launched the negotiations in the spring after
widespread reports of foreclosure irregularities, such as so-called
"robo-signing" and illegal home seizures, emerged.

But state prosecutors and federal officials are pressing to complete a proposed
settlement with the five companies even though they've initiated only a limited
investigation that hasn't examined the full extent of the alleged wrongdoing,
The Huffington Post reported last month. Elizabeth Warren, who until recently
was a senior adviser to President Barack Obama and Treasury Secretary Timothy
Geithner, told a congressional panel last month that government agencies may not
have sufficiently investigated claims that borrowers' homes were illegally
seized.

Schneiderman, a Democrat who's in his first term as New York's top law enforcer,
has been among a group of state legal officers who has also questioned the
desire for a speedy resolution. He's leading his own investigation into mortgage
improprieties, subpoenaing documents from the nation's largest financial
institutions and reviewing court records for possible illegal home
repossessions.

The Obama administration officials -- in particular, Treasury Secretary Timothy
Geithner and HUD Secretary Shaun Donovan -- have publicly stated on numerous
occasions that they want a quick resolution to the 50-state mortgage probe.

Sources said attorneys general like Schneiderman, along with the top legal
officers from Massachusetts, Delaware and Nevada, among others, were
complicating that goal by questioning the plan to scuttle the state and federal
investigations in exchange for a settlement.

These attorneys general have said they're reluctant to sign on to an agreement
that effectively kills their ongoing investigations or prevents new ones from
being launched. Beau Biden, Delaware's top law enforcer, remains on the states'
executive committee.

In a statement of support for Schneiderman, Biden said that the "events leading
up to the mortgage crisis must be fully investigated, including origination and
securitization practices, before any broad immunity is granted."

"The American people deserve an investigation," he added.

Top Obama administration officials recently reached out to Schneiderman and his
allies, effectively requesting he get in line, people familiar with the
discussions said. The New York Times editorial board on Tuesday declared that
Schneiderman "should stand his ground in not supporting the deal."

"The administration says that a settlement would quickly deliver much needed
relief to hard-pressed borrowers, but it's doubtful it would provide redress on
a par with the banks' wrongdoing or borrowers' needs," the board wrote.

The email announcing Schneiderman's dismissal from the states' executive
committee was sent just after noon to more than 50 people by Patrick Madigan, a
top lawyer in the Iowa Attorney General's Office. It read: "Effective
immediately, the New York Attorney General's Office has been removed from the
Executive Committee of the Robosigning multistate."

This month, Schneiderman accused Bank of New York Mellon, the 11th-largest U.S.
bank by assets, of "repeated fraud and illegality" when it came to its actions
as a trustee for various mortgage securities, and he accused Bank of America of
fabricating missing documents when foreclosing on some homeowners who defaulted
on their mortgages.

Bank of America's stock price is down more than 55 percent over the past six
months. Investors haven't seen a closing price as low as Tuesday's -- $6.30 per
share -- since March 2009.

The state and federal discussions with the targeted banks -- JPMorgan Chase,
Bank of America, Wells Fargo, Citigroup and Ally Financial -- center on the
banks providing distressed homeowners with reduced monthly payments, lower
mortgage principal amounts or other relief in exchange for a release from
liability for past illegal actions. An agreement could yield up to $30 billion
to be used to allow troubled borrowers to remain in their homes or to help
others move into rentals, according to people involved in the talks and
documents reviewed by HuffPost.

The bigger the effective grant of immunity from potential government civil
lawsuits, the more cash the companies are willing to pay to settle the
accusations, these people have said.

The Obama administration, along with the top legal officers from other states
leading the talks, including officials from Iowa and Illinois, has said the
deteriorating state of the housing market should be a priority. By their
reckoning, a resolution to these outstanding issues needs to be quickly achieved
in order to save potentially hundreds of thousands of homeowners from
foreclosure and to allow proper home repossessions to fully resume. Many
companies halted home seizures last autumn after news reports of widespread
robo-signing.

Foreclosures have since crawled to a halt, even though the number of homeowners
delinquent on their mortgages remains sky-high, according to data compiled by
Lender Processing Services and RealtyTrac. New delinquencies have ticked up,
according to the Mortgage Bankers Association. Home prices continue to drop and
are not expected to resume climbing until 2013, experts forecast.

Schneiderman is "committed to a comprehensive resolution," his spokesman, Danny
Kanner, said in an emailed statement. "While we will continue to work with
Delaware, Nevada, Massachusetts, and our other federal and state counterparts to
achieve those goals, ongoing investigations by attorneys general cannot be shut
down by efforts to settle quickly and those responsible must be held
accountable."

Kanner said Schneiderman was removed at Iowa Attorney General Tom Miller's
"prerogative."

Miller, through a spokesman, said that Schneiderman was "intimately involved in
every aspect of this investigation and possible settlement" from the launch of
the probe last October to this past June. Schneiderman was "on every internal
[executive committee] conference call and participated in all conference calls
and meetings with the top five mortgage servicers. As such, New York had a large
influence on the actions and decisions of the multistate."

But in June, after The Huffington Post reported on a confidential conference
call between state and federal officials, the executive committee was reduced to
a smaller group of states that would directly negotiate with the five banks.
Schneiderman was invited to join this smaller group, but declined, Miller said.

"Since that time, New York has actively worked to undermine the very same
multistate group that it had spent the previous nine months working very closely
with," Miller continued. "While we certainly respect the right of any state to
choose to no longer participate in a multistate and to pursue another path,
working to actively undermine a multistate while still a member of the Executive
Committee simply doesn't make sense, is unprecedented and is unacceptable.
Accordingly, today I informed New York that it is no longer a member of the
Executive Committee."

Schneiderman's removal will likely make it easier for state and federal
officials to reach an accord with the five banks. However, the potential amount
of money they'll be able to extract will likely decrease.

Schneiderman, armed with New York state's Martin Act, can bring suit against
alleged fraudsters without having to prove that they intended to commit fraud, a
much more lenient standard than available to federal securities regulators. New
York's top legal officer is investigating whether banks followed the state's
laws when bundling mortgages into securities.

That probe could prove explosive.

"If mortgages were not properly transferred in the securitization process, then
mortgage-backed securities would in fact not be backed by any mortgages
whatsoever," Adam J. Levitin, a bankruptcy expert and professor at Georgetown
University Law Center, told a congressional panel last November. Levitin said
the problem could "cloud title to nearly every property in the United States"
and could lead to trillions of dollars in losses.

The banks targeted by state prosecutors and federal officials would rather
settle claims that they improperly bundled home loans into securities than allow
those probes to continue. In exchange, they'd shell out more cash to help
homeowners and help the Obama administration avert foreclosures.

With a settlement into those investigations seemingly off the table, the banks
would likely be willing to pay less in penalties.

--

Law Offices of J. Arthur Roberts
Joseph Arthur Roberts, Attorney at Law 
Newport Beach Office
Main:   (949) 675-9900
3345 Newport Blvd., Suite 213
Newport Beach, CA 92663
Fax:     (888) 989-9309
 joe@jarlegal.com