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Open Letter to CA Attorney General on Two-Year Anniversary of Mortgage Fraud Strike Force

Dear Attorney General Kamala Harris,

Your state’s homeowners, who know first-hand the vast injustice of the mortgage/foreclosure crisis, are here today, the two-year anniversary of your Mortgage Fraud Strike Force, to demand that the Strike Force live up to its name and prosecute and bring to trial the big banks for their mortgage crimes.

Your office took close to $90 million of the $18 billion that came to CA from the 49-state mortgage settlement — five times the minuscule $18.4 million that reportedly went to homeowners. Yet we see zero important prosecutions of bankers at the helm of creating this crisis of mortgage fraud — a crisis of fraud you yourself said is directly linked to our state’s budget woes. We do not understand why the crimes behind the tanking of our entire state’s economy, the consequences of which have devastated entire neighborhoods and created extreme hardship for millions of Californians, are not important enough to prosecute and bring to trial.

You have just brought suit against JPMorgan Chase for fraudulent and unlawful debt-collection practices against credit card borrowers, but you know as we know this is a tiny tip of the iceberg. Chase and other big banks do identical unlawful debt-collection practices when collecting on the debt of a mortgage/deed of trust by foreclosing. Robosigning is at the heart of the credit card suit. Robosigning of fraudulent documents is at the heart of virtually all foreclosure cases in all courts.

Foreclosure mills have recreated deeds and mortgage documents out of thin air and used them to steal people’s homes. The San Francisco Assessor Recorder’s audit proved that 99% of foreclosures had questionable documents and 84% had clear violations of law. You have a letter from Los Angeles County Recorder Dean Logan saying he believes the illegal activities described in that audit are systemic and common throughout California, including Los Angeles County. That letter was delivered to you March 9, 2012, over a year ago. You received on your desk last month 18 cases from Home Owners for Justice of criminal acts committed by Recontrust Company of forged, altered and fraudulent documents proven to have been recorded into county records in violation of the Homeowners Bill of Rights. Where are the indictments?

Whatever your reasons are that no prosecutions have gone forward against the big banks for mortgage fraud, we are here today to say that those reasons are not good enough. Credit card debt-collection fraud did not tank our state’s economy. We call on you to within six months bring identical prosecutions against the big banks for the identical practices in mortgage and foreclosure crimes as you are prosecuting for credit card crimes. We demand you prosecute the foreclosure mills and third party debt collectors who are doing much of the dirty work for the banks.

We also expect you to issue a public call to judges to regard allegations of robosigning as a serious cause of action. We have seen judges repeatedly dismiss or ignore these egregious crimes in court. As chief law enforcement officer in the state, we insist you communicate that this dismissive bias ends today.

Investigations have also shown that the $18 billion settlement did not go into principle reductions or compensation for damages, as you have claimed. It was a bait and switch — the funds have been siphoned into CA’s general fund to blunt the hemorrhaging budget. We call on you to publicly address this giant misappropriation of funds.

Finally, we are here to point out the obvious. As Senator Elizabeth Warren said, when banks can break the law and take in billions and billions of profits, then turn around and settle using tiny sums of money out of those profits, they don’t have much incentive to follow the law. Trials give us days and days of testimony when bank employees are grilled to find out exactly what they’ve been up to. That information needs to be public record. The Homeowners Bill of Rights is not enough. We ask you what Sen. Warren asked regulators: how tough are you?”


Homeowners of California

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