Bank of America, to its credit, was the only bank to freeze foreclosures in all 50 states as a result of revelations regarding the “robo-signers”: bank employees who were approving thousands of foreclosure without verifying basic information. However, BofA restarted its foreclosure machine just ten days later, saying that it had examined more than 100,000 foreclosure cases and found no problems.

Shortly thereafter, BofA backtracked and said that it had actually found some problems, but tried to downplay them as simple paperwork errors — like misspelling names — rather than a systemic effort to rush foreclosures through the pipeline with almost complete disregard for the legal process. But a former BofA robo-signer told his story to CNN Money and painted a very different picture:

[Former BofA employee Tam Doan] didn’t have time to actually read the paperwork he was signing, he said, and in some cases, he didn’t even know what documents he was putting his pen to. “I had no idea what I was signing,” said Doan. “Either you were in or you were out.” [...]

The paperwork he robo-signed most often were the notices to delinquent borrowers that the servicer was proceeding to foreclosure. By signing that document, he was affirming that the bank had reviewed the loan and it didn’t qualify for a modification. But, he said, the reality was he had no idea whether Bank of America had really tried to save the borrower’s home. “We had no knowledge of whether the foreclosure could proceed or couldn’t, but regardless, we signed the documents to get these foreclosures out of the way,” he said, noting that he assumed another department had checked that the review was done.

Doan’s description of BofA neglecting to verify whether or not borrowers qualified for a loan modifications fits in with our previous reporting. We found that the bank was siphoning borrowers into its own private loan modification program without checking whether they qualified for federal modification programs, in clear violation of the bank’s contract with the Treasury Department.

But more importantly, Doan’s story strikes right at the heart of the image the banks want to convey regarding foreclosure-gate. They want to make it a story about careless mistakes and sloppy paperwork, when it’s really one about a system explicitly designed to cut corners, even if that meant violating due process and the legal requirements for foreclosing on a home.

Even if there were no homeowners who were improperly foreclosed upon (and we know there were, including some who literally didn’t have a mortgage), the banks’ blatant disregard for process should be enough to warrant slamming the brakes on their foreclosure factories, especially considering that the extent of the problem is still unclear. One investor told CNBC today that he estimates that the mortgage mess could cost the banks $97 billion in losses.

Earlier this week, Rep. Spencer Bachus (R-AL), who is in line to become chairman of the House Financial Services Committee if Republicans gain control of the lower chamber, was caught soliciting donations from the banking industry by promising to be easier on the banks than Democrats have been. In return, Bachus is taking aim at some of the crucial reform measures in the Dodd-Frank financial reform law that are supposed to rein in some of the risky practices of Wall Street’s financial behemoths.

First, via Salon’s Andrew Leonard, we have Bachus saying that he would repeal the provision giving the federal government authority to dismantle large failing financial firms:

Republicans would try to repeal the government’s new authority to seize and liquidate large troubled financial firms should they take control of the U.S. House of Representatives next year, a key lawmaker said on Thursday. Representative Spencer Bachus, who is in line to be chairman of the House Financial Services Committee under Republican control, said that section of the new Dodd-Frank financial law institutionalizes government bailouts of “too-big-to fail” institutions and puts taxpayers at risk.

And then MarketWatch reported today that Bachus may also have it in for the Volcker rule, which is meant to prevent banks from trading for their own account with federally insured funds:

Crowley [of the law firm K&L Gates] predicts that Republican leadership in the House Financial Services Committee, the legislative panel responsible for overseeing the implementation of the Dodd-Frank Act, will hold hearings on the Volcker Rule and press regulators to limit costs to the industry as the agencies write the new rules…[Rep. Spencer] Bachus (R-AL), in July, unsuccessfully sought to amend the bank reform legislation with a provision that would have prohibited the Volcker Rule’s implementation unless other countries adopted similar measures.

These are provisions that give federal regulators key tools to both rein in the riskiness of the biggest banks and then liquidate those banks if they still get themselves into significant trouble (without relying on taxpayer dollars).

If Bachus does intend to bog down the implementation of Dodd-Frank, it seems like he’s going to have a receptive crowd of counterparts to work with. For instance, Rep. Jeb Hensarling (R-TX) has expressed a desire to defund the new Consumer Financial Protection Bureau and Rep. Scott Garrett (R-NJ) has said that he would limit funding for regulatory agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission in order to undermine Dodd-Frank.

This week, after it comically claimed to have plowed through more than 100,000 reviews of foreclosure documents in 10 days, Bank of America finally admitted that it had initiated improper foreclosures, with documents that were either incomplete or included errors. However, BofA attempted to play the whole thing off as simply a spate of unfortunate typos, rather than a systematic disregard for due process that has resulted in improper foreclosures (and the theft of at least one pet parrot).

But Bank of America has looked like the model of forthrightness compared to Wells Fargo, which has steadfastly refused to freeze foreclosures, despite the revelations regarding the “robo-signers” — bank employees who approved thousands of foreclosure without verifying basic information. In fact, Wells was on Capitol Hill insisting that its foreclosure process was sound and that it never employed robo-signers just one day before the Financial Times broke a story about Wells using robo-signers.

Now, Wells has finally admitted that it had some problems with foreclosure documents, but like BofA, it’s trying to play them off as no big deal:

The San Francisco-based bank said on Wednesday it planned to submit additional paperwork on 55,000 foreclosures before the courts in the 23 US states that require a judge’s approval before houses can be reclaimed. Wells said it expected to complete the additional filings by the middle of November…“The issues the company has identified do not relate in any way to the quality of the customer and loan data; nor does the company believe that any of these instances led to foreclosures which should not have otherwise occurred,” Wells said. Wells said it had identified instances where foreclosure procedures “did not strictly adhere to the required procedures”.

So, for Wells, not adhering “to the required procedures” means they simply get to go back and do it over. But as Yves Smith wrote, “by definition, a replacement of a robo signed affidavit is an admission the earlier submission was improper, hence a fraud on the court.”

And that’s what the banks keep trying to play down: they’re committing fraud by circumventing the legal process in place for initiating and completing a foreclosure. According to the FT, some of Wells’ documents involved possibly fraudulent notarizations, which is a problem that is more significant than a simple spelling error, and merits a real investigation.