"I'd be very surprised if there were more than 1% of people who were actually kicked out of their homes who were actually current on their payments," he told us.
He explains Foreclosure-gate in one simple sentence.
"What has happened is, some percentage of foreclosures were probably legitimate foreclosures, but the letter of law was not followed because the system wasn't designed to handle the amount of volume of foreclosures that occurred, and banks, lawfirms, etc cut corners."
On Friday, Reuters reported that the SEC is expanding its investigation into the fraudclosure mess:
NEW YORK/WASHINGTON, Dec 17 (Reuters) - U.S. regulators have opened a new line of inquiry in their mortgage foreclosure probe and are asking big Wall Street banks about the beginning stages of mortgage securitization, two sources familiar with the probe said.
The Securities and Exchange Commission launched the new phase of its investigation by sending out a fresh round of subpoenas last week to big banks like Bank of America Corp (BAC.N), Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N), Goldman Sachs Group Inc (GS.N) and Wells Fargo & Co (WFC.N), the sources said.
The subpoenas focus on the earliest stage of the mortgage securitization process, said the sources, who requested anonymity because the probe is not public.
The sources said the SEC is asking for information about the role of so-called "master servicers" -- specialized firms that oversee the selection and maintenance of the large pool of home loans that go into every mortgage-backed bond.
In many cases, Wall Street banks that underwrite mortgage-backed securities either own their own master servicing firms or are closely aligned with one.
In the fall, the SEC began looking into the banks' foreclosure practices following allegations that mortgage servicers like Bank of America were using shoddy paperwork to evict delinquent borrowers from their homes.
The Justice Department, banking regulators and the attorneys general in all 50 U.S. states are also probing potential wrongdoing.
One of the sources said the SEC is seeking information about the role banks had in mortgage securitization. The regulator is also looking at the role trustees for the trusts that issued the mortgage-backed securities had in monitoring the performance of the underlying loans.
The SEC is looking at whether loans were properly transferred to the trusts that issued the securities, the source said.
The renewed look at the securitization process is an extension of the SEC's preliminary probe into the mortgage mess. The SEC's regional offices are all looking at some aspect of the foreclosure crisis.
In related news, both Nevada and Arizona are suing Bank of America for violating consumer protection laws in the loan modification process:
PHOENIX – Attorneys general in Arizona and Nevada filed civil lawsuits Friday against Bank of America Corp., alleging that the lender is misleading and deceiving homeowners who have tried to modify mortgages in two of the nation's most foreclosure-damaged states.
Bank of America violated Arizona's consumer fraud law by misleading consumers who tried to reduce their monthly payments to keep their homes, state Attorney General Terry Goddard said. The bank also violated the terms of a 2009 consent agreement requiring its Countrywide mortgage subsidiary to implement a loan modification program, the Arizona lawsuit alleges.
Hundreds of homeowners kept making their mortgage payments because Bank of America repeatedly assured them that their loans were being modified, Goddard said. Instead, many lost their homes anyway.
"Those people could have used that money for something else," Goddard told The Associated Press. "They were deceived into continuing to make mortgage payments when they had no hope of saving their homes."
Nevada Attorney General Catherine Cortez Masto told the AP that the Silver State's lawsuit was a last resort to try to get the bank to change its ways. It was filed after several discussions with bank managers led to assurances but little more.
"Clearly there is a disconnect between what Bank of America tells me at the management level and what's happening on the front line," Masto said.
Masto said separate lawsuits show the bank's problems with consumers are widespread.
"The only thing that I'm asking is that (Bank of America) give them a reasonable response in a timely manner," she said. "It is, in my perspective, a callous disregard for what we are telling them."
The SEC is expanding its investigation into fraudulent paperwork in the securitization process, Nevada and Arizona are suing BoA for massive fraud in the loan modification process, but Whitney Tilson thinks it's all good, the banks are just a little behind in the paperwork so they're speeding up the process by, you know, cutting some corners. But move along here, there's nothing to see, it's all fine and dandy, they're only breaking tiny little laws and most of these people are deadbeats anyway...
There are few people as despicable as hedge fund criminal Whitney Tilson.
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