You’ve built the biggest news organization in the business press.
You have a wire service with hundreds of thousands of subscribers, a Web site with million of visitors a month, a magazine you created that has 355,000 subscribers, and a magazine you bought—one of the Big Three businesss rags—with a circulation of nearly a million.
So what do you do when you really want to get your message out?
Take to the opinion pages of one of your primary competitors, naturally.
Matt Winkler does that today, bypassing his own media empire (Bloomberg News, Bloomberg.com, Bloomberg Markets, Bloomberg BusinessWeek) to write an op-ed for The Wall Street Journal on his company’s fight to force the Federal Reserve’s hand on its trillion-dollar bailouts.
— The press continues to push back on the spin from the banks—and their apologists in the media—that the foreclosure fraud scandal is much ado about nothing.
Today The New York Times has a good story with examples of major screwups in the foreclosure process. Here’s the lede. Commence blood boiling:
Ricky Rought paid cash to the Deutsche Bank National Trust Company for a four-room cabin in Michigan with the intention of fixing it up for his daughter. Instead, the bank tried to foreclose on the property and the locks were changed, court records show.
Sonya Robison is facing a foreclosure suit in Colorado after the company handling her mortgage encouraged her to skip a payment, she says, to square up for mistakenly changing the locks on her home, too.
Thomas and Charlotte Sexton, of Kentucky, were successfully foreclosed upon by a mortgage trust that, according to court records, does not exist.
Barry Ritholtz put it nicely two weeks ago:
It is a legal impossibility for someone without a mortgage to be foreclosed upon. It is a legal impossibility for the wrong house to be foreclosed upon, It is a legal impossibility for the wrong bank to sue for foreclosure.
And yet, all of those things have occurred. The only way these errors could have occurred is if several people involved in the process committed criminal fraud. This is not a case of “Well, something slipped through the cracks.” In order for the process to fail, many people along the chain must commit fraud.
— Meantime, Jonathan Weil scorches the Federal Reserve in his Bloomberg column today.
Here’s the lede:
So now we know what it takes for the Federal Reserve to show an interest in rooting out fraud at a too-big-to-fail bank. The Fed must decide that the Fed itself has been defrauded.
Borrowers? Depositors? They can protect themselves. Heaven help a bailed-out bank unlucky enough to be discovered servicing some of the Fed’s junky mortgage bonds, though. Good cops know a victim when they see one. The Fed knows a victim when it is one.
The New York Fed is threatening to sue Bank of America for fraudulent underwriting of toxic securities it now holds and for a “fraudulent, unauthorized and deceptive effort to supplement its servicing income.”
So, Weil, naturally wonders, “where are the police?”
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.If those allegations are true, it can’t be just this one group of bondholders getting fleeced. The fraud would have to be endemic, and probably industry-wide. The Justice Department should be locking up bankers. The Securities and Exchange Commission should be filing lawsuits for ripping off investors. The various banking regulators’ enforcement divisions should be cracking skulls. None of that is happening, of course. And there’s no sign yet that it will.
The Fed isn’t acting in its capacity as a regulator. It’s exercising its rights as an investor protecting its own pecuniary interests and, by extension, those of taxpayers. The two roles don’t mix well.
