The New York Times reported a multi-state agreement has been made between states’ attorneys general to investigate foreclosure fraud . The original agreement was between 49 of the 50 states; the lone exception, Alabama, indicated later on Wednesday the state would participate.

The White House said yesterday that it supported such investigations; at the time there were 40 unidentified states in agreement about investigating foreclosure fraud. It wasn’t clear which ten states were abstaining and why. It wouldn’t have been a surprise if Michigan had abstained since a spokesperson for the office of its state attorney general Mike Cox had previously appeared reluctant endorse any investigation, saying a call for an investigation was "politicizing the struggles of Michigan families."

No, Michiganders would not be shocked; there’s an extremely close relationship between the Michigan Republican Party and the largest foreclosure servicer in the state, Trott & Trott. The firm’s owner, David Trott, was a Bush bundler and was John McCain’s landlord during the 2008 presidential campaign.

In late 2008, it was estimated that this particular "foreclosure mill" handled roughly 70 to 80 percent of all foreclosures in the state, much of which stemmed from their status as a preferred foreclosure service provider for Fannie Mae.

Trott also owned a portion of the largest legal newspaper in the state in which foreclosure notices were published.

David Trott made campaign contributions totaling $15,000 to Mike Cox’s committee or PAC between 2003-2006; there may have been more donations since then, subject to verification, given that Cox ran for governor in the Republican primary this year. According to MichiganMessenger.com, Cox has "taken at least $125,000 from political action committees and individuals with ties to the mortgage and foreclosure industry since 2002," including Trott-related donations.

Trott & Trott’s owner and employees have also made substantive donations to Republican Rep. Thad McCotter (MI-11), who sits on the House Financial Services Committee. McCotter failed to attend any of that committee’s meetings for the two key years immediately preceding the market crash of Sep. 2008.

Is this the kind of performance key donors anticipated?

In late 2008 to early 2009, Michigan’s state legislature pursued a bill which would establish a 90-day moratorium on foreclosures and offer refinancing with in-state banks. Michigan’s Democratic-majority state house passed a bill, while the Republican-majority state senate fought against passing such a bill. Sources close to the legislature said the same foreclosure services firm Trott & Trott actually wrote the legislation presented in the alternate by the state senate, killing the entire effort. The state senator who offered the alternate bill, Sen. Randy Richardville, was a recipient of campaign contributions from the same foreclosure mill.

It’s a convoluted and sordid situation, in which a single foreclosure services firm has managed to lock in a revenue stream based on foreclosures while preventing opportunities to reduce the number of foreclosures in the state. The stranglehold goes in both directions; as an appointed foreclosure services firm, Trott & Trott decides which mortgages will go into foreclosure, which will be redeemed, and rarely if ever allows homeowners to attempt to renegotiate the terms of their loan with the originator.

One might wonder whether other states have similar situations, where the foreclosure services firms are tightly entwined with the state’s Republican Party while preventing all efforts to change the number of foreclosures.

Hold that thought – because there’s more layers to this onion.