Thursday, April 26, 2012

Robo-signing settlement and FSGO Sec. 8B2.1(b)(6)

Sent: 4/26/2012 8:18:32 A.M. Central Daylight Time
Subj: Robo-signing settlement and FSGO Sec. 8B2.1(b)(6)

To the addressees:

I wish to ask some things of the state attorneys general, the Department of Justice, the Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators, and the Mortgage Bankers Association. My questions concern Sec. 8B2.1(b)(6) of the Federal Sentencing Guidelines for Organizations, as it relates to, and as it may be affected by, the $25 billion settlement that has been made by Ally Financial, JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America regarding the alleged mortgage-servicing and home-foreclosure abuses stemming from the so-called "robo-signing" practices. The questions are, in part, prompted by the recent HUD report about the pressures that were put on bank foreclosure workers (as reported in this Wall Street Journal article).

Sec. 8B2.1(b)(6) of the Federal Sentencing Guidelines for Organizations provides that:
The organization 's compliance and ethics program shall be promoted and enforced consistently throughout the organization through (A) appropriate incentives to perform in accordance with the compliance and ethics program; and (B) appropriate disciplinary measures for engaging in criminal conduct and for failing to take reasonable steps to prevent or detect criminal conduct.
My questions are these: Is there, or should there be, any connection between, on the one hand, the prosecution of the governmental "robo-signing" complaint, and its settlement, and, on the other hand, the defendant banks, under their compliance and ethics programs, undertaking disciplinary measures against culpable officers and employees? In answering the question, please address the extent to which it is expected that Federal and state authorities will undertake criminal or civil actions against individual bank officers and employees, and also the actual or expected interface, be it facilitative or otherwise, between governmental authorities and the banks related to undertaking disciplinary measures against officers and employees (including whether and how the "robo-signing" settlement affects, or will affect, the same, be it positively or negatively).

The addressees are parties who had involvement with, or who have or should have special knowledge about what went on in connection with, the "robo-signing" settlement. I appreciate that the addressees are not the most primary sources of information for obtaining answers to my questions, and, if the addressees don't feel they are in a position to answer my questions, in whole or in part, I will understand.

Thank you.
Rob Shattuck

From: jmcpherson@NAAG.ORG
Sent: 4/30/2012 8:19:09 A.M. Central Daylight Time
Subj: RE: Robo-signing settlement and FSGO Sec. 8B2.1(b)(6)
Good Morning Mr. Shattuck,
Please forgive my tardy response. I was out of the office last week and received your note this morning.
The National Association of Attorneys General (NAAG) was not involved in negotiations or settlement involving the state Attorneys General and the major mortgage processing companies. NAAG is also not involved in the execution or enforcement of that agreement. I recommend you correspond directly with the Attorneys General who were involved in the effort. Their e-mail and surface mail address can be found on our web site at
Thank you,

Sent: 5/1/2012 4:50:42 P.M. Central Daylight Time
Subj: Re: Robo-signing settlement and FSGO Sec. 8B2.1(b)(6)
Dear Mr. Shattuck:

Relative to your questions please refer to:

Best Regards,

David Saunders
Executive Director
American Association of Residential Mortgage Regulators
1025 Thomas Jefferson St., NW
Suite 500 East
Washington, D.C. 20007

Sent: 5/2/2012 4:51:07 P.M. Central Daylight Time
Subj: RE: Robo-signing settlement and FSGO Sec. 8B2.1(b)(6)

Mr. Shatt, You ask questions relating to the AG settlement that I lack the ability to answer, based on the limited public availability of the terms of the settlement and the special expertise needed to assess in the current context the relationship between criminal sentencing guidelines and the settlement of a civil action. I second the recommendation of another recipient of your email that you submit your questions to the AGs’ umbrella organization or to individual AGs.
Phyllis K. Slesinger
Senior Vice President & General Counsel, Human Resources and Legal Affairs
Mortgage Bankers Association
Phone: (202) 557-2869 begin_of_the_skype_highlighting            (202) 557-2869      end_of_the_skype_highlighting
Fax: (202) 621-1469

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