Why the Foreclosure Deal May Not Be So Hot After All

[xchrom]

http://www.rollingstone.com/politics/blogs/taibblog/why-the-foreclosure-deal-may-not-be-so-hot-after-all-20120209

So the foreclosure settlement is through.

A few weeks back, I was optimistic about it – I had been worried that it was going to contain broad liability waivers for all sorts of activities, and I was pleasantly surprised when I heard that its scope had essentially been narrowed to robosigning offenses.

However, now that the settlement is finalized, and I've had time to think about it and talk to people who know far more than I do about this, I'm feeling pretty queasy.

It feels an awful lot like what happened here is the nation's criminal justice honchos collectively realized that a thorough investigation of the problem would require resources they simply do not have, or are reluctant to deploy, and decided to accept a superficially face-saving peace offer rather than fight it out.

So they settled the case in a way that reads in headlines like it's a bite out of the banks, but in fact is barely even that. There will be little in the way of real compensation for stuggling homeowners, and there are serious issues in the area of the deal's enforceability. In fact, about the only part of the deal we can be absolutely sure will be honored in full is the liability waiver for the robosigning offenses.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/why-the-foreclosure-deal-may-not-be-so-hot-after-all-20120209#ixzz1lz9DxsaS

[JDPriestly]

1. The robosigning offenses are the least interesting of the problems.

It is pretty obvious what happened there. What is more important is how much fraud was involved in getting people into these bad loans for amounts they could not afford in the first place. That is what needs to be investigated. The robosigning did not cause most of the damage. It was just the tip of the iceberg.

The real criminal fraud was in the submission of false financial information to federal authorities on many of the loans. Who was responsible for that? The banks seem to want us to believe that it was the homeowners who, en masse, lied in writing to the banks and federal agencies. That is unbelievable and at least in some cases quite untrue.

Another issue is why the assessments of the property values were so consistently incorrect. Was that just error or did banks cherry-pick assessors who would overvalue properties? And if they did cherry-pick, was that a crime? Was the intent fraudulent?

Those are just a couple of the big issues. So the most interesting and crucial issues are yet to be investigated. I wonder whether the robo-signing settlement also included the whole MERS scheme through which the mortgage companies to transfer titles without recording them properly? That is unclear to me.

It is important to take specific cases and review the internal documents of the mortgage companies that were selling some of these loans.

[izquierdista]

2. How do you figure that?

Because for every "submission of false financial information to federal authorities", there is a signature, in ink, of someone who signed as the responsible representative of the lender. The original intent of putting that signature blank there, when the document was drafted, was so that there could be someone identified if recourse required in the future.

Think of how payday loans, installment credit, rental agreements, child custody agreements, etc., are all upheld to what is specified in the contract, because after all, "this is your signature agreeing to the terms of the contract?" Strange that all of a sudden, when it is the bank's ass on the line that "signing offenses are the least interesting of the problems".

[JDPriestly]

5. It's not that the robosigning is a minor problem.

It's huge. It's fraud. If a welfare recipient did what the robosigners did, that welfare recipient would be in jail in no time.

No. It's just that, in my opinion, fraud was spread throughout the entire mortgage process, and fraud in the inducement may be found to have taken place in many cases.

http://legal-dictionary.thefreedictionary.com/fraud+in+the+inducement

There were other types of fraud involved in causing the mortgage crisis also in my opinion. I hope that the investigation is thorough. The robosigning fraud was pretty easy to discern. It didn't take a lot of sleuthing to find out more about it once the fact of the robosigning was discovered. I do not mean to belittle the work of the lawyers who discovered the robosigning. I'm just saying that it is fairly undeniable that robosigning was fraud. Some of the other fraud is more complicated and was perpetrated at some other level, perhaps systematically at a higher level. Just how systematic it might have been I do not know. It could have been just a coincidence that there was so much fraud in the documentation -- but because of numbers of cases of fraudulent or insufficient documentation, I doubt it.

[ProSense]

3. Everyone

should watch this interview.

Schneiderman: deal with banks a 'down payment'
http://www.msnbc.msn.com/id/26315908/ns/msnbc_tv-rachel_maddow_show/#46335427


Not only are the criminal investigations ongoing, but there is also a provision to provide lawyers to home owners.

During the interview, Rachel also mentioned this:

Company Faces Forgery Charges in Mo. Foreclosures
http://www.democraticunderground.com/1002279081

More information.

Fact Sheet: Mortgage Servicing Settlement
http://www.democraticunderground.com/1002289132

After mortgage settlement, MERS left out in the cold
http://www.democraticunderground.com/1002290415

[sabrina 1]

6. Schneiderman once again gives credit to the Occupy Movement for putting the pressure

on to get some accountability. He has consistently said that without this movement which was joined by others, the attitude that there was no need for accountability, would have prevailed.

Again, thank you Occupiers.

[sarcasmo]

7. +1

[ProSense]

8. Yes,

Schneiderman once again gives credit to the Occupy Movement for putting the pressure

on to get some accountability. He has consistently said that without this movement which was joined by others, the attitude that there was no need for accountability, would have prevailed.

Again, thank you Occupiers.

...he has been consistent: http://www.democraticunderground.com/1002245744

I also believe he's spot on about the nature of the settlement.

[sabrina 1]

9. Yes, he has always supported them, and his comment at the end of his interview

with Rachel last night, was very important, I am looking for the transcript or will try to transcribe when I have time. He gave a very important message to all of us regarding how the people can be heard..

I believe he knew a settlement would be reached, without him if necessary and had that happened, it might have been the one that was proposed last year, which would have been unacceptable, although once signed, not much could have been done about it.

I think, if he is correct, and the money allotted for legal fees for homeowners etc, actually gets to them, (do not know who is going to enforce all of this) that is important. That has been one of the most horrendous things about the fraudulent foreclosures, the lack of legal representation for homeowners which would be unheard of in other civilized countries. We do not have provisions for legal aid in civil matters here in the US. So, that is definitely a very good thing.

I still have questions I am having trouble getting the answers to, but he did answer a few of them in his interview with Rachel. Eg, banks can still be criminally charged for robo-signing.

I do however remember how encouraging the President's policy to provide money to help people stay in their homes was, when it was announced and the money provided. However, most of that money has not been allocated to homeowners and under questioning from Elizabeth Warren, Geithner refused to say why. Therefore it's best to wait and see if the same thing happens here. Hopefully it will not, but past experience doesn't make it a certainty.

[CanonRay]

4. I was never optimistic, I knew we'd get screwed, and we did

all is normal, nothing to see here folks.

[ldf]

10. i only heard the explanation once, but..

it sounded like some of it would go to those who had lost their homes.. they "could" get "up to" $2000. that certainly makes up for having your life completely destroyed.

but it was also explained that a lot of the 25 billion would go to lower the principle of the loans, thereby lowering payments. that sounds good.... maybe...

don't the banks hold the mortgages? would that not mean that to lower the principle, or pay down the principle, the money has to go to the banks to lower the principle, thereby lowering the payments?

AND they don't get investigated for outright fraud?

is this another bank bailout passing under the guise of giving pennies to foreclosed homeowners, and a free pass for blatant fraud?

am i completely off base here?

[badtoworse]

11. A question about responsibility

How do you differentiate between borrowers who either lied on their applications or didn't have the resources to survive the loss of a job, etc. and lenders who offered fraudulent loans? What responsibility does the borrower have to understand the terms of the loan and the risks he or she is taking on? I understand that many homeowners were caught in a terrible economy and found themselves unable to repay their loans, but why is that the bank's fault?

[RB TexLa]

12. Be careful, there are more than a few here you view people as having no responsibilty only

corporations should be held responsible for their actions.