Turn On The Lights, Watch The Roaches Scatter, Part 4

Things are moving fast on the Ally/JPMorgan mortgage fraud story now.  Sen. Al Franken has joined the fray, sending out a letter to among other people Helicopter Ben insisting that this issue needs to be investigated for possible criminal charges.  ZH:

The biggest financial story which continues to get absolutely no mention on CNBC just got its latest multi-step escalation: Senator Al Franken has just blasted a letter to Tim Geithner, Shaun Donovan, Secretary of Housing and Urban Development, Eric Holder, John Walsh, Controller of the Currency, Sheila Bair, and, drumroll, Ben Bernanke, telling the recipients that "each of your agencies has an important role to play in addressing this egregious situation and holding all appropriate actors fully accountable. As such, I respectfully request that you collaborate to conduct a thorough investigation into the alleged misconduct. As part of this investigation, it is crucial that Ally and its employees are held fully accountable for any criminal misconduct."

Since if this pervasive mortgage fraud is more than just alleged, the stink will reach to the very top of places like JP Morgan, Ally, and possibly every single bank that has been in the mortgage origination business, something tells us that Ben Bernanke, whose job is precisely to protect the banks' interests will not rush into any investigation for the duration of FASB's existence. It gets better: "Additionally, all homeowners who may have experienced illegitimate foreclosure sales, those who have been forced to defend against illegitimate foreclosure actions, and those who have been harmed must be identified. These individuals must received proper restitution and compensation, as provided for under the law." And the punchline: "It is critical to confirm that no loans provided through the FHA or in conjunction with the HAMP program were associated with Ally's misconduct." Yes, oddly enough the government is about to lose even more credibility once it is discovered that it worked in collaboration with the biggest mortgage fraud scheme in history.

Somebody in the Village may actually notice that underneath all this smoke there's actual flames, especially with Alan Grayson and Al Franken's names attached to the story.  This one is beginning to accelerate at a rapid pace, folks.

I'll keep an eye on it.