In her original lawsuit, Regan alleged that a News Corp. executive had pressured her to lie to federal officials investigating then-New York City police commissioner Bernard Kerik. Kerik was a favorite of then-Mayor Rudolph Giuliani and had been nominated to the post of secretary at the U.S. Department of Homeland Security in 2004 at Giuliani’s recommendation. Kerik’s ascension to the position unraveled when it was revealed that he had hired an undocumented alien worker as a nanny; the federal probe News Corp. is alleged to have meddled in was (unrelated to the nanny) a tax fraud investigation that led to Kerik’s imprisonment (he’s now one year into a four-year sentence).

So how is Regan tied to this whole business? It gets even more sordid: the reason she knew Kerik well enough to be of interest in the federal investigation was because the two of them had an affair during the writing, publication and press tour of his 2001 memoir, Lost Son, which was published through an imprint of HarperCollins. Her suit claimed that close ties between higher-ups at News Corp. and then-presidential hopeful Giuliani were behind the push to have her lie to investigators. Because she reached a settlement with News Corp. and signed a non-disclosure agreement, Regan has never said who told her to lie, but the New York Times reports that a recent fee dispute filed by her former lawyers names Roger Ailes, chairman and CEO of Fox News.

It’s now up to the Department of Justice to decide whether to charge Ailes. This weekend, a post from financial writer Barry Ritholtz on his blog, The Big Picture, reported that the DOJ may do just that. Ritholtz said that he recently spoke with someone who was supposed to be hosting Ailes at a March event, but that the executive canceled, citing “legal reasons.” Ritholtz’s source told him that he believes Ailes will be indicted as early as today. Salon reports that Ritholtz’s insider is an “Upper East Side Democrat” whom Ritholtz met by chance at a Barbados airport. While the reliability of Ritholtz’s source cannot be independently verified, Ritholtz wasn’t quite as definitive in an interview with Salon’s Justin Elliott as he was when he put up the post with the title “Roger Ailes to be Indicted.” Ritholtz told Elliott, “If it’s true we’ll find out. If it’s not, no big deal.” Fox News, for one, isn’t speaking on the matter.

1. Notice of Delinquency is sent to a borrower who has fallen behind his payment schedule;
2. Notice of Default is sent to a delinquent borrower who has missed the requisite number of mortgage payments;
3. Notice of Foreclosure is sent to the defaulted borrower, and the process begins;
4. Affidavit by the bank’s representative are signed attesting to: Ownership of the note, who the borrower is, the property in question, the date of last mortgage payment, amount of delinquency, tax escrow owed, other payments (such as homeowners insurance);
5. Notarized documents: A Notary Public affirms that the affidavit was actually signed by the signatory, and this allows it to be entered into the court as documentary evidence;
6. Notice of Pendency (Lis Pendens) is filed with the County Clerk putting the world on notice as to the foreclosure action;
7. Summons and Complaint are prepared by bank attorneys, who further verify the specific information attested to by the bank executives. The attorneys then file the Complaint, commencing the Foreclosure Action;
8. Service of Process is filed, either hand delivered to the home owner, or nailed to the door of the home;
9. Referee is Appointed to review and process the case; calculate the amount owed, and report back to the Court; The Referees report is also notarized;
10. Judgment of Foreclosure is moved for by Note holder;
11. Court orders the property auctioned. The court specifies a notice of the auction, publicizing the property auction;
12. Bidders must Close on the auctioned house in 30-90 days; In the event of no sale, the bank takes possession (REO).

Fraud has happened — though nobody knows the extent yet — in steps four through seven. Banks did not have the proper legal documentation to move forward with the final foreclosure — meaning the foreclosure itself might be illegal. We know that’s a major problem for banks, which will, at the very least, have to spend some serious time answering various state courts about violating consumer-protection and banking laws. And Mike Konczal — in a great series of post called “foreclosure fraud for dummies — shows that there are serious repercussions for homeowners undergoing foreclosure as well:

[T]he process of trying to get people behind on their payments current instead of driving them into bankruptcy has broken down. But for now it’s clear that mortgage servicers don’t have great incentives to get distressed homeowner’s records correct.

There’s well-documented evidence that extra fees are tacked on to mortgages that have fallen behind, fees that aren’t following the terms of the note. This is usually only found out in bankruptcy where there is a lawyer (and multiple parties), not in foreclosure cases. But if homeowners wants to challenge whether what the servicers claim is the correct final due amount, the terms of the note are necessary for the court.

This will matter a great deal for many homeowners. Small, marginal differences in the total owed could allow for a short sale. It could determine if the homeowner has any equity in their home. And this can only be determined by producing the note.

The hope is that homeowners might be empowered to seek better terms and fewer fees from banks and servicers, now that everyone from local courts to the federal government is calling for major investigations of what has gone on.

I’ve run out of patience with tired memes and discredited claims by fools and partisans.

The rhetoric of those pushing nonsense on the public in an attempt to confuse rather than illuminate  — the phrase is “agnotology” –  only serves to aid the lobbyists working on behalf of the Banks and Investment houses to maintain the status quo.

All is well, nothing to see here, move along.

Well, its time to put up or shut up: I hereby challenge any of those who believe the CRA is at prime fault in the housing boom and collapse, and economic morass we are in to a debate. The question for debate: “Is the CRA significantly to blame for the credit crisis?”

A mutually agreed upon time and place, outcome determined by a fair jury, for any dollar amount between $10,000 up to $100,000 dollars (i.e., for more than just bragging rights).

I can’t help but applaud this. No matter how many times it has been shot down, the blame-the-CRA myth keeps coming back to life. As TWI has explained, the CRA, a 1977 anti-redlining law, didn’t even cover the unregulated lenders who made most of the subprime loans during the housing boom. There’s simply no evidence for this assertion.

The movement to blame the CRA started during the fall campaign season, seized by conservatives as a convenient scapegoat for the financial crisis. It  came back to life recently, when bloggers like The Atlantic’s Megan McArdle picked up on Clusterstock postings by John Carney, once again citing the CRA as regulation gone wrong.

As McArdle put it, the CRA’s role in the crisis is “understated by liberals who are unwilling to admit that regulation, too, can produce hideous unintended consequences.”

Felix Salmon at Reuters has knocked down most of this. But I’d like to add something that’s regularly missed in the CRA debate. What the anti-regulation types miss is that the CRA never was much of a regulation to begin with. As Guy Cecala, publisher of Inside Mortgage Finance, which covers the subprime industry, told TWI, lenders never took the CRA all that seriously to begin with. The lending industry viewed the CRA as an extremely loose regulation. Lenders joked about how you’d have to mug an elderly, disabled, minority woman in a wheelchair to lose your positive CRA rating.

How that got turned on its head so that the CRA has become a symbol of regulation gone wrong is an example of what happens when idealogues who don’t know how an industry really works take over the debate. If Ritholtz’s bold offer gets some of this out on the table — and then off the table for good — it’s all for the better.

Salmon reports that Carney may be willing to take up Ritholtz on the challenge. So let the games begin. And let them put an end to the blame-the-CRA movement for good.

We saw foreclosure sales drop in the second half of 2008 as banks employed all manners of accounting tricks to avoid actually reporting delinquencies. We’ve previously mentioned that the voluntary foreclosure abatements were merely kicking the can down the road. So to, were the bank gimmicks like extending the date of delinquencies from 60 to 120 to 180 days. As they run out of tricks, foreclosure-related filings increased in February 2009 almost 30% from February 2008, according to RealtyTrac.

And the backlog of “seriously delinquent loans” keeps growing . . .

It’s true that foreclosure freezes probably only delayed the inevitable for many homeowners. But I’m not so sure the idea wasn’t worth trying. Part of the motivation was to buy some time to see whether loans for troubled borrowers could be modified to keep them in their homes.

One of the problems was that not all lenders, or borrowers, were genuinely interested in loan modifications. The stays became mere publicity tools for some banks, as well as short-term solutions for borrowers who knew they could never afford their homes, regardless of how their loans were modified. Eventually reality catches up to both of them, and that seems to be exactly what is happening now.

The tale comes from Barry Ritholtz at The Big Picture, who had a contract with publisher McGraw Hill, which owns the Standard & Poor’s credit rating agency, for a book on the financial crisis to be called “Bailout Nation.” Ritholtz said he was well aware his publisher owned a ratings agency, but his contract also called for him to have final editing control. Still, things didn’t work out, once McGraw Hill got a look at his chapters detailing the failings of ratings agencies. They’ve been blamed for contributing to the financial crisis by giving high ratings to risky mortgage-backed securities, as they were collecting fees from the investment banks that issuing them.

From Ritholtz:

When it came to chapter 14 — Who is to Blame? – there were issues about the style of what I wrote about Moody’s, S&P and Fitch’s. I literally called the ratings agencies and investment bankers “Pimps and Whores;” I accused them of engaging in pay for play (buying ratings) payola, etc. Rather than describe it, I will simply post the original version here.

Ritholtz got some pushback from an editor, but still figured he could tell his story:

Now, before you assume I am an idiot for doing a book that was critical of the ratings agencies with a publisher that owns S&P, understand that I properly anticipated this. My contract gave me Final Edit. Not only that, I had previously discussed this issue months earlier with then publisher Herb Schaffner. (He was laid off in a big Q4 round of firings).

Sometime over the summer, Herb informed me that the ratings agencies discussions would have to be handled “delicately and diplomatically.”

I responded, “Sorry, Herb, but I don’t do diplomacy.” If they wanted someone who was subtle or diplomatic, boy did they have the wrong guy. I offered to return the advance check and we could all move on. He backed down, and I assumed — apparently quite wrongly — that this was the end of this issue. How can you write a book on this subject and not lambast the ratings agencies?

Well, apparently you can’t, at least not in this case. Editors wanted more changes in the ratings agency section, but Ritholtz said no way. He told them to cancel his contract, if they wanted to go that route. McGraw Hill did.

The publisher said in a statement the book was canceled because of conflicts over editing and sourcing, not because of criticism of the ratings agencies; Ritholtz denies that.

In the end, as the financial system continues to teeter on collapse, “Bailout Nation” and its story of the behavior of credit agencies during the subprime boom still awaits the light of day.