Take a Look at the Settlement

16 Comments

1. 

   TarheelDem on February 9, 2012 at 2:12 pm

   The deal for the moment does not treat robosigning as fraud and does not delegitimize MERS.  In the latter case, we have privatized every register of deeds office in the country without any checks on the process.

2. 

   Oui on February 9, 2012 at 2:38 pm

   .

   Settlement Breakdown by State Plus Other Official Propaganda

   BANKS ARE STILL ACCOUNTABLE FOR OTHER CLAIMS

   State cases against the rating agencies and bid-rigging in the municipal bond market, for example, continue.  Claims and investigations against MERS and how Wall Street packaged mortgages into securities also continue.

   On January 27 U.S. Attorney General Eric Holder along with Housing and Urban Development (HUD) Secretary Shaun Donovan, Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami and New York Attorney General Eric Schneiderman announced the formation of the Residential Mortgage-Backed Securities Working Group.  The working group will investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities.

   "But I will not let myself be reduced to silence."

3. 

   Brendan Skwire on February 9, 2012 at 3:07 pm

   pat murphy in PA says it’s a about $2,000/homeowner and he opposes it.

   “While I recognize progress was made during negotiations and appreciate the work done to reach this mortgage settlement, I believe it fails to get justice for the millions of homeowners who fell victim to one of the most severe and widespread cases of fraud in American history. This settlement was our single best opportunity to recover what was stolen from the American public. Mortgage lenders stole money, stole homes and, like any other criminals, they must be held fully accountable and make their victims whole. This deal falls short of that threshold, and therefore, I cannot support it,” Murphy said.

   “When I was serving in the 82nd Airborne in Fort Bragg, NC, I prosecuted a Staff Sergeant for theft and fraud. He was convicted, and sentenced to jail time. He also had to pay back the money he had stolen. That’s the way the justice system should work. When a thief is caught stealing, that thief must make his victims whole again,” Murphy said. “The same should be true for mortgage lenders. But $25 billion is not enough. It’s possibly less than a penny for every dollar lost by American homeowners. The $2,000 some homeowners are set to receive does little to help or comfort the Pennsylvania families who lost their homes. Also, one out of every four mortgages is underwater but only a small fraction of those homeowners may get help. “

   “The banks need to be held to the same standard as everyone else. As Attorney General, I will aggressively investigate mortgage fraud in Pennsylvania and work with law enforcement across the country to ensure that homeowners get justice for the crimes committed against them,” Murphy added.

   (posted on FB)

   Guess he didn’t get the note about most progressive president evah.  

   • 

     BooMan on February 9, 2012 at 3:18 pm

     Smart politics by Murphy.  And probably right on the merits, too.

     As I said, the monetary value of the settlement is questionable, but the consumer protections are excellent and unprecedented.  

     • 

       Brendan Skwire on February 9, 2012 at 3:29 pm

       I’m not gonna be happy until people go to jail.

       • 

         IL JimP on February 9, 2012 at 8:39 pm

         then you’ll never be happy

         • 

           Brendan Skwire on February 11, 2012 at 1:13 pm

           as they say, no on eis free when others are oppressed.

           Why should I be happy in the face of injustice?

4. 

   WaterGirl on February 9, 2012 at 3:42 pm

   I went to the link, but i didn’t see anything about the new consumer protections.  Are there new consumer protections as part of this settlement?  Or are you just referring to new consumer protections in a general sense?

   • 

     BooMan on February 9, 2012 at 4:00 pm

     Sorry.  I thought the link had the following (via email):

     The joint federal-state agreement requires the mortgage servicers to implement unprecedented changes in how they service mortgage loans, handle foreclosures, and ensure the accuracy of information provided in federal bankruptcy court.  The agreement requires new servicing standards which will prevent foreclosure abuses of the past, such as robo-signing, improper documentation and lost paperwork, and create dozens of new consumer protections.  The new standards provide for strict oversight of foreclosure processing, including third-party vendors, and new requirements to undertake pre-filing reviews of certain documents filed in bankruptcy court.

     The new servicing standards make foreclosure a last resort by requiring servicers to evaluate homeowners for other loss mitigation options first.  In addition, banks will be restricted from foreclosing while the homeowner is being considered for a loan modification.  The new standards also include procedures and timelines for reviewing loan modification applications and give homeowners the right to appeal denials.  Servicers will also be required to create a single point of contact for borrowers seeking information about their loans and maintain adequate staff to handle calls.

     The agreement will also provide enhanced protections for service members that go beyond those required by the Servicemembers Civil Relief Act (SCRA).  In addition, the four servicers that had not previously resolved certain portions of potential SCRA liability have agreed to conduct a full review, overseen by the Justice Department’s Civil Rights Division, to determine whether any servicemembers were foreclosed on in violation of SCRA since Jan. 1, 2006.  The servicers have also agreed to conduct a thorough review, overseen by the Civil Rights Division, to determine whether any servicemember, from Jan. 1, 2008, to the present, was charged interest in excess of 6% on their mortgage, after a valid request to lower the interest rate, in violation of the SCRA.  Servicers will be required to make payments to any servicemember who was a victim of a wrongful foreclosure or who was wrongfully charged a higher interest rate.  This compensation for servicemembers is in addition to the $25 billion settlement amount.

     • 

       WaterGirl on February 9, 2012 at 5:36 pm

       Thanks, Booman!

5. 

   seabe on February 9, 2012 at 3:54 pm

   This is by far the most unambiguously progressive element of his presidency.

   I agree, and I thought that when Dodd-Frank passed. And unlike most of my liberal/leftist/progressive friends, they’ve all argued that the health care bill was better. Totally disagree. It’s not even close. Maybe the culture and anger and simply lack of “customers” has reduced hedge funds more than Dodd-Frank, but I don’t care. People say we still have TBTF, but how do we know that? Has the new resolution authority even been tested yet?

   The new resolution authority makes is easier for large financial institutions (known as SIFIs) to fail, which is the exact opposite of “acting as if these institutions are still too big to fail.”

6. 

   DaveW on February 9, 2012 at 4:09 pm

   Seems to me the best thing about the settlement is that it doesn’t absolve the banks of guilt like almost all settlements do, and doesn’t preclude private/class action suits in the future. The amount isn’t enough, but the rest of it is better than I expected.

   • 

     joe from Lowell on February 9, 2012 at 4:15 pm

     “The amount isn’t enough”

     Keep in mind what this amount is for.  This isn’t a comprehensive “everything the banks did wrong to homeowners” bill.

     Somone at the GOS compared the size of the award to the total amount of negative net equity of American homeowners, about $700 billion.  Well, ok, that’s a big number, but what does it have to do with the right number for this lawsuit?

     • 

       DaveW on February 9, 2012 at 5:17 pm

       Good point. It’s too tempting to want this settlement to be the Big Fix to the mortgage crimes, when in fact it only covers a small facet of it. And doesn’t preclude further action even on that facet. I think the fear is that it WILL be used as an excuse to “put this all behind us”, as the pols love to say.

       • 

         Phil Perspective on February 9, 2012 at 7:32 pm

         I think the fear is that it WILL be used as an excuse to “put this all behind us”, as the pols love to say.

         And who is big on that?!?  Because that’s exactly what this does.  Larry and Joe Schmoe can’t afford to sue the banks.  And how many states are going to bother now?

         • 

           priscianus jr on February 9, 2012 at 9:59 pm

           Well New York sure is.
           http://www.huffingtonpost.com/2012/02/03/mortgage-fraud-new-york-ag-schneiderman-sues-banks-electron
           ic_n_1252793.html

           Actually the suits are going full steam ahead:
           http://newsandinsight.thomsonreuters.com/Legal/News/ViewNews.aspx?id=39047&terms=%40ReutersTopic
           Codes+CONTAINS+%27ANV%27

           And a federal suit is also planned.
           http://online.wsj.com/article/SB10001424052970203315804577211470167644182.html

           And by the way, MERS’s legal argument is total malarkey.