When it comes to letting banks and mortgage servicers get away with far too much at the expense of consumers, investors and society as a whole, there’s plenty of blame to go around. Government officials at the state and federal level have almost universally dropped the ball, and with limited exceptions judges across the country have turned a blind eye to lack of standing, blatantly fraudulent documents and other gaping holes in the legal process.
It’s that environment that led Rolling Stone‘s Matt Taibbi to refer to federal judge Jed Rakoff as a “sort of legal hero of our time” after Rakoff had some sharp words for the SEC regarding its proposed settlement with Citigroup. With all due respect to Judge Rakoff, who is fighting the good fight here and in the minority as he does so, it says a lot about the current climate and the previous actions of judges and government agencies that a man can be fairly deemed a “hero of sorts” for asking questions like ““How can a securities fraud of this nature and magnitude be the result simply of negligence?”
and looking for assurances that we can’t expect yet another repeat of the same behavior post-settlement.
It’s encouraging, though, to see judges drawing the line, and Rakoff isn’t alone in that
Earlier this month, Judge Dennis Blackmon of the Superior Court of Carroll County, Georgia began an order denying U.S. Bank’s motion to dismiss a claim relating to the denial of a mortgage modification. Blackmon’s order included a mocking recitation of what a “cynical judge” might think about the real motivation behind the motion to dismiss, complete with a charming allusion to “Alice’s Restaurant“.
Max is quoted in the Huffington Post story about Judge Blackmon’s order.
Let’s hope that these high-profile decisions empower other judges to draw similar lines and call the banks and servicers to answer for their actions at long last.