National Mortgage Settlement All But Inevitable As California, New York Join Deal

[cal04]

Last edited Thu Feb 9, 2012, 02:47 PM - Edit history (1)

http://www.huffingtonpost.com/2012/02/08/national-mortgage-settlement_n_1264012.html

New York Attorney General Eric Schneiderman and California Attorney General Kamala Harris are joining the national mortgage servicing settlement, making a deal that includes all 50 states all but inevitable, according to a source who spoke Wednesday evening on condition of anonymity.

"It's hard to see any state staying out of the deal if California is in," said the source.

The settlement resolves allegations that five of the nation's largest banks forged documents and wrongfully foreclosed on borrowers in what has come to be known as the "robo-signing" scandal. Schneiderman and Harris have been outspoken in urging the Obama administration to hold the nation's biggest banks accountable for their role in the housing crisis and have resisted signing on to the settlement until now over concerns that it would go too easy on the banks and provide too little homeowner relief. The two states' participation had widely been seen as necessary to a successful deal.

California has been one of the hardest hit states during the foreclosure crisis, and because of this was considered a key state when it came to securing a deal. The five banks participating in the settlement -- Ally Financial, Citigroup, Bank of America, Wells Fargo and JP Morgan Chase -- agreed to contribute a total of $25 billion to help struggling homeowners if California joined the deal. Without California, that figure would drop to $19 billion. The deal is being negotiated between the state attorneys general, the Obama administration and the banks.


Just posted to the NY Times
http://www.nytimes.com/2012/02/09/business/states-negotiate-25-billion-deal-for-homeowners.html
States Negotiate $25 Billion Deal for Homeowners

(snip)
The final details of the pact were still being negotiated Wednesday night, including how many states would participate and when the formal announcement would be made in Washington. The two biggest holdouts, California and New York, now plan to sign on, according to the officials with knowledge of the matter who did not want to be identified because the negotiations were not completed.


State attorneys general closer to foreclosure settlement
http://www.latimes.com/business/money/la-mortgage-settlement-20120208,0,1968517.story

Attorneys general appeared close to reaching a massive multistate settlement over faulty foreclosure proceedings Wednesday night, though California and New York remained in negotiations, a person not authorized to speak publicly on the matter said.

Think Progress:The Foreclosure Fraud Settlement, By The Numbers
http://thinkprogress.org/economy/2012/02/09/421865/foreclosure-fraud-settlement-numbers/

(snip)
The deal protects banks from state and federal lawsuits pertaining to some foreclosure fraud abuses, including robo-signing. However, Schneidermann’s lawsuit against three big banks for allegedly fraudulent use of a mortgage database will go forward. In addition, “individual homeowners retain private rights of action to sue over foreclosure fraud and other abuses.”

[msongs]

1. who says crime doesn't pay? anybody who broke the law in all this is gonna skate home free nt

[bhikkhu]

20. This is a civil penalty, not criminal

...and all avenues for criminal prosecution are still open.

[nineteen50]

2. I hope this is not another case

where fraud is made profitable.

[fasttense]

36. Well of course it is.

"Even if the final settlement number is $25 billion, it pales in comparison to the scope of the problem," said Margery Golant, a Florida-based attorney who represents homeowners and formerly served as assistant general counsel at subprime mortgage giant Ocwen Financial. "If you do the math, that's a few hundred million per state. That's not enough to change anything."

The big banks pay a few hundred million to each state and get away with fraud.

Do you really think a state AG that has agreed to this, will prosecute the criminals who did it? This settlement will ensure no criminal prosecution for fraud or make it very, very, unlikly.

[Citizen Worker]

3. Schneiderman and Harris caved to White House pressure. If this doesn't prove to everyone that the

vaunted principle called the rule of law is nothing more than a hollow platitude we need to talk about a bridge I have for sale.

[banned from Kos]

4. The State AG's had a couple of years to pursue damages on their own and they failed.

This is a case where the sum is greater than the parts.

[hay rick]

5. Wonder if Schneiderman put some teeth in the deal.

I have been skeptical of Obama's SOTU Financial Crimes Unit, given his ties to Wall Street and AG Holder's history of determined inaction. Concerning Holder-from an article at OpEd:http://www.opednews.com/articles/Obama-to-Grant-Banks-Robos-by-Gustav-Wynn-120121-502.html

"As it happens, four of the five banks involved in the settlement were clients of the DC law firm where both Attorney General Eric Holder and Lanny Breuer, the current head of the DOJ's criminal division, were partners. Reuters and Huffington Post report here that Holder opposed investigations into robosigning despite receiving ample evidence of forged or suspect documents going back to 2010, the same year deputies under both Holder and Breuer went back to work for to the same law firm."

Robert Kuttner speculates on "the deal" here:http://www.huffingtonpost.com/robert-kuttner/eric-schneiderman_b_1240453.html

[jannyk]

6. That's fucking disappointing. nt

[EFerrari]

12. It is but also, predictable I guess.

NY and CA probably don't want to be on the hook for this agreement failing.

Obama ducked out on us when this was shipped out to the 50 states. And i question Elizabeth Warren's signing off on the idea at the time.

[DJ13]

7. The people have been sold out once again

Sadly this is becoming a normal routine no matter which party is in charge.

[riderinthestorm]

8. Kicking and reccing only because the story is too damned important to drop nt

[JDPriestly]

9. I'm going to hold on my reaction until I find out whether this is a

comprehensive settlement or whether it permits criminal prosecutions in addition to its terms.

[Ruby the Liberal]

11. The last one gave them immunity. Write a check and walk.

Highly doubtful the other 47 AG got on board with leaving that door open (and without any fanfare about it), and on that, if it DID allow for civil action (or independent criminal pursuit), wouldn't they be screaming about that from the top of their lungs?

You will know by noon tomorrow either way. Just watch the bank stock prices in the AM.

[bhikkhu]

22. Civil, not criminal, and only for certain activity

...so (as far as I have been able to tell) there are no barriers to criminal prosecution. But, then again, there weren't any barriers to criminal prosecution. I think there are individuals who would be happier if barriers were put up, then they could continue to prosecute no one, but they would have a solid excuse for it.

[Ruby the Liberal]

10. Just what we have been saying since the SOTU.

They neutered him for expediency. Gave him the new commission seat so that he would back off and agree to this settlement.

Highly disappointed but not surprised.

[arendt]

17. That's my guess. Another good guy bought off. n/t

[elleng]

13. Waiting to see final agreement, and what Delaware's Beau Biden does.

'Final details' important.

[SoapBox]

21. ...ditto to what you said!

[arendt]

14. All this PP/contraception smoke to distract from this GIANT SELLOUT.

This is just more proof we live in an oligarchy.

The crooks at the top have a completely different set of laws. They can rob and cheat and steal, and they will get a slap on the wrist.

They stole the middle class, and now we get this shitty, shitty, pennies on the dollar sellout; and they get to go free instead of going to jail.

And this stinking, crooked MERS system gets to continue to feed the derivatives monster.

We are fucked.

There is no democracy left.

BOTH parties have just sold us all out.

[lefairhill06]

15. This May Not Be All There Is

As I understand it, this deal is completely separate from the recent investigation initiated by the President at the State of the Union speech -- that is, it covers only the robo-signing aspect; this action has been pending for some time. Now if it can be out of the way, at least some people will be helped, and the next phase of actual criminal activities may come under greater scrutiny (it might even be possible that some banks involved in more than one questionable activity may, having seen that fines are finally being assessed somewhere in coming months be more willing to work with homeowners rather than face even greater penalties. This is a very plausible explanation for Mr. Schneiderman joining forces with the Justice Department -- they have not been involved in the current action).

[arendt]

16. You are saying this is NOT the $25 B chump change settlement of ALL mortgage fraud?

You are saying that, after opposing the settlement for years, the state AGs have NOT agreed to settle trillions of dollars of fraud claims?

It would be nice to see a few executives get prosecuted; but not if 99% of the money they stole by fraud stays in corporate coffers. By your own logic, the DoJ investigation of MERS is completely separate. So, the deal is that the crooks get to keep the money, and we get to prosecute a few designated scapegoats.

I do not see anyway this settlement can be a good thing.

[Ruby the Liberal]

19. No - this is the $25b settlement.

They changed their minds and are now signing on.

The commission Schneiderman is on is dealing with a different issue/aspect of the industry.

[Ruby the Liberal]

18. They are separate, but until Schneiderman was hand picked for the new commission

(which is largely unrelated to this issue, but still mortgages), he was one of a handful that refused to sign off on this $25b gift with immunity to the banks.

Now, he has magically changed his mind.

[lefairhill06]

25. Not Such Small Stuff

From all the reporting over the past 2-3 years, seems there are still a number of issues with which the big banks will have to contend under the Justice Department investigation: bundling and re-sale violations, foreclosing on thousands(?)/millions(?) with improper or no documentation, and so forth. The Justice Department will still have access to information already gathered by the States' Attorneys General (their activity heretofore, including the robo-signing, has been at the State level) -- you know, jurisdictional issues and the like. On their own, $25B may be all the SAGs could accomplish (still, for victims, not small change); now, there can be another crack coordinated at the Federal level. Not saying it is fast, and probably will never be enough, but sitting around doing nothing or worse, waiting for the "market" to hit bottom -- over 50 different States that could take some time -- wasn't doing much to solve the problem either.

[arendt]

31. Translation: crooks keep money, promise to obey new rules (hahahaha)

$25B is nothing. It is a small fraction of one year of Wall St. bonuses.

The Federal level has spent three years refusing to regulate or prosecute these crooks, and you want to bad mouth the state AGs.

Face it, Obama is actively complicit in arm twisting the state AGs on behalf of his Wall St. masters. This settlement is just the latest payoff for their investment in him.

[jwirr]

23. So is this deal going to finally help the people who lost their homes?

[Dragonfli]

26. No, this is them paying a fine for a small fraction of the fraud and getting immunity

so the homeowners they fucked can't sue them for what it cost them.
This is a small investment by bankers to get a lot of stolen money for a very small cut of the take to make it "legal".

[jwirr]

38. I certainly hope we all wake up from this nightmare one of these days. I should have known better.

[2pooped2pop]

33. no, those people are screwed

This bill may help those who are not yet in trouble. THose of us sinking will be allowed to sink. We can't sue them. THe investors can still sue them. THis has taken the right for the homeowners to do a damned thing away. They left in the ability for the states or feds to prosecute but, they will probably not do anything.

so basically those of us in need are getting shit upon again. THose who may be having a hard time but current,(and can probably refinance without the bill) will get some help. (maybe)

rich investors can still sue
homeowners, not so much.
yeah, great deal.

[banned from Kos]

35. Yes, $2000 per foreclosure. From the NY Times:

"Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years."

Each "robo-signing" is a misdemeanor.

[fasttense]

37. $2,000 for being fraudulently forced out of your home? Really a whole big $2,000?

And the banks continue their rape of the working class. This time with a deal from Obama.

[closeupready]

39. Oh, for cripes sake. $2,000 is monthly rent on a small one-bedroom.

Sheez. What freaking bullcrap.

[midnight]

24. K&R

[solarman350]

27. We Bailed out the Banks Who Doubled Down & Are Now Settling for Peanuts & no Criminal Penalty

A big windfall (as usual) for Wall St./Big Banking. This caper dwarfs their last one...The "Savings and Loan" Crisis." Thank ronOLD RAPEnuns for that one when he signed the bill that deregulated the banking industry and then followed up by signing another bill doubling the FDIC ($125,000 to $250,000). So now....connecting the dots here in THIS caper:

The DOJ has yet to prosecute ANYONE criminally responsible for the "Mortgage Crisis." Instead the people who lost their homes due to foreclosure can now rent them back from the same banks who loaned them money to buy the house in the first place.


Someone else said it much more prosaically than I:

According to some sources more than one and a half million homes have gone into foreclosure since the beginning of the Great Recession and are owned by banks, or the federal government. More still lurk in the shadow inventory – homes that are stalled in the foreclosure process or inhabited by owners who have given up paying the mortgage on a house worth less than their buying price. Many of the foreclosed homes have not been resold, due to tighter lending policies and bargain hunting buyers waiting for the prices to bottom out.

This means that there are a lot of vacant houses in the U.S. Most are clustered in cities hardest hit by the Great Recession – New York, Las Vegas, Detroit, for example. These houses are a problem. Although legally the responsibility of the mortgage holder, the cost of upkeep (mowing lawns, repairing broken windows, draining pools) and security is frequently falling on the local governments, taxing already overburdened city budgets. Unmaintained vacant houses are an eyesore and a drag on neighborhood property values. As property values fall so do the tax revenues. Vacant buildings attract squatters, youth looking for hangouts, gangs, thieves and vandals. They are frequently broken into and have been destroyed by accidental or intentional fires, requiring the attention of police and fire fighters.

As the housing market continues to be depressed (and some experts do not expect it to rebound for years to come given the continued high unemployment, constrained borrowing power and glut of available homes at low prices) cities and the federal government are looking for ways to deal with the problem. They have taken two different approaches – cities condemning and razing vacant buildings and the federal government selling blocks of homes to investors who enter into an agreement to rent the homes out for a specified number of years. Both of these plans have merit.

According to a GAO report on the nation’s vacant house issue, Detroit, Michigan, has spent more than $20 million since May 2009 to demolish almost 4,000 vacant properties. And in Cleveland, Ohio, where the recession left one-fifth of all houses vacant, more than 1,000 have been razed and as many as 20,000 more are slated for demolition. A recent 60 Minutes news story titled “There goes the neighborhood” documented Cleveland’s effort to deal with the spreading blight of vacant homes. Abandoned houses have fallen victim to thieves who break in to steal fixtures, appliances, copper piping, and even the aluminum siding.

In an effort to rid themselves of near worthless properties banks are also calling in demolition crews and then donating the cleared land back to cities. Not only do they clear their books of a property that costs them to maintain, they can get a tax write off through their donation.

The federal government recently announced a new plan to deal with foreclosed homes – selling properties held by Fannie May and Freddie Mac to investors for use as rental properties. “The federal program is aimed to clear the backlog of distressed properties that has flooded the market and depressed prices, while at the same time meeting the increased demands of renters.” Given that America is becoming a nation of renters, this might be a strategy that banks could use as well to offload some of their inventory of foreclosed homes. The sooner these vacant houses are filled, the sooner home prices will stabilize, property tax revenues will increase, property crimes will drop, and neighborhoods will recover.

Well, now that we have some plans to deal with all these vacant, abandoned houses, maybe we could turn our attention to the plight of the homeless?

--May Day--Occupy the Fucking Planet. No Retreat This Time!

http://www.unionbook.org/video/occupy-may-day-2012

[arendt]

32. "The DOJ has yet to prosecute ANYONE criminally responsible for the "Mortgage Crisis." says it all.

n/t

[Fuddnik]

28. Break out the pitchforks!

[JJW]

29. Election year payolla

They get immunity for pennies on the dollar. The legislators get rewarded via K St lobbying money. The people that were hurt get nothing.

[sendero]

30. As usual..

.. a lot of noise and fury followed by complete and utter capitulation.

Any more questions about who calls the shots in this country?

[Octafish]

34. It's about time Wall Street catches a break.

Whose stolen money do these politicians think it is?

[lovuian]

40. People lose houses and credit rating Banks pay a pittance

and no one goes to jail for the robosigning

and creation of Real Estate crash and Depression


This is NOT Justice ...this is a joke

[kenfrequed]

41. Nooo

Robo-signing is a felony. It is fraud, counterfeiting, and forgery. Letting these bastards off the hook is so stupid.

When was the last time giving a break to the big guys actually had good consequences? Never. They are corporations. They aren't gonna be nice just because you cut them a break. They are mathematic formulae whose purpose is to make money and externalize cost. Dollar signs and massive penalties are the ONLY thing that can force them to exist honestly.