California calls for federal probe of mortgage industry threats

Gavin Newsom. Credit: Thomas Hawk.

California Lt. Gov. Gavin Newsom has asked the Department of Justice to investigate alleged collusion and mortgage industry threats against California municipalities. Several California cities are considering using eminent domain to seize mortgages and restructure terms to aid struggling homeowners. Newsom says the mortgage industry may be colluding in restraint of trade to stop this as well as making threats and calling for illegal boycotts against those involved.

Newsom details his concerns in a bluntly-worded letter to Attorney General Eric Holder. The real smoking gun, which Newsom quotes from, is a private report from industry analysys Laurie Goodman in which she details “non-legal channels” and using boycotts against those thinking of using eminent domain seizure of mortgages. Newsom says “this is a boycott and it is a per se violation of the Sherman, Clayton, and Robinson-Patman Antitrust Acts.”

He quotes other names and sources, all of whom seem remarkably quiet this morning, since they’re probably rather busy consulting with lawyers. Newsom should be congratulated for his actions, which no doubt are making quite a few mortgage industry parasites quite nervous.