CalPERS and Other Large Players Settle Suit Against Countrywide and Bank of America

Angelo Mozilo

Remember Countrywide Financial? If you suffered through the prospect or reality of a foreclosed home, the words are chilling ones. Since the collapse of the corrupt housing market in 2008, Countrywide (now called Countrywide Mortgage) and its current owner, Bank of America, have tried to get out from key lawsuits against them.

They appear to have succeeded recently against a well-funded, determined adversary. The LA Times reported today that CalPERS, the Golden State's powerful pension arm, along with other large institutional investors, quietly settled their litigation against Countrywide and BofA. The confidential nature of the settlement means the public has no idea how much the defendants ponied up to satisfy CalPERS and the other litigants. BofA's 4th quarter SEC filing might offer a hint; then again, maybe not.

What is clear is that Countrywide's former chief executive and the face of the foreclosure scandal, Angelo Mozilo, walks free to this day. Meanwhile, those who are financially chained or ruined by the foreclosure disaster do not.

Meanwhile, The New York Times published an interesting look at the interplay of a federal bank regulator and IndyMac, one of the financial firms that formed the housing debacle's Ground Zero. The excellent story was co-authored by Gretchen Morgenson. She is of the few mainstream reporters willing to take on complex financial topics and the combined muscle of Major League Finance and the Feds.

MERS' Role in Nation's Foreclosure Scandal

The latest salvo in the scandal that won't go away appears courtesy of Wall Street scourge Gretchen Morgenson and her New York Times colleague Michael Powell (presumably no relation to the former FCC chairman).

A piece in today's Times discusses MERS, an acronym for Mortgage Electronic Registration Systems. The firm's principal significance is that, according to the Times article, its "private mortgage registry has all but replaced the nation's public land ownership records." Most major real estate loan servicers and providers used MERS for record keeping, on the theory that "efficient" electronic, privately-managed "data" would prove superior to the old-fashioned paper documentation county bureaucracies provided.

How did that proposition shake out? Click on the Times story here for the details. I'll give you a hint: how many vice presidents does it take to operate MERS? If you guessed "thousands," you're on the right track.

Hats off to Morgenson and Powell for attempting to shed light on this issue. It's essential reading in any attempt to understand the American housing catastrophe, and the exponential growth of corruption in our society.