Banks Get Amnesty in Pieces: Reviews to Be Halted

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Editor’s Comment: Hat tip to Brent Bertrim. The banks  have sought amnesty in dozens of attempts in legislation, judicial decisions, and with law enforcement. The multistate settlement effectively stopped the criminal investigation. The other “settlements” have effectively stopped other administrative actions that should have revoked bank charters and dismembered the mega banks.

Now even the review process intended to reveal the monetary damage and theft by the banks is about to be stopped by yet another “settlement” for $10 Billion — an amount that is less than the interest earned in one month by the major bank players under current “bailout” deals with the Federal Reserve. This money will do nothing for most people but because it sounds like a lot of money, some are expressing happiness over it. The government just didn’t do its job on the most pressing problem in American economic history caused by criminal conduct.

The loss of income and wealth by the majority of homeowners is and will continue to be devastating to the families of this flagrant abuse of power and trust by the nation’s largest banks. Correcting the corruption of title records will take decades alone. And income and wealth disparity caused by bank theft will take the same amount of time except for those who fight and win, one case at a time.

This effectively leaves the homeowner out in the cold and it does damage to the investors who put up the money for bogus mortgage bonds. Bottom Line: It’s all on a case by case basis one battle at a time for homeowners who in many cases lack resources or have just moved on —- with the knowledge the viewpoint that that the system is rigged. So much for the shining city on the hill.

Settlement Expected on Past Abuses in Home Loans

Published:31-Dec’12 01:39 ET

By:Jessica Silver-Greenberg

Banking regulators are close to a $10 billion settlement with 14 banks that would end the government’s efforts to hold lenders responsible for foreclosure abuses like faulty paperwork and excessive fees that may have led to evictions, according to people with knowledge of the discussions.

Under the settlement, a significant amount of the money, $3.75 billion, would go to people who have already lost their homes, making it potentially more generous to former homeowners than a broad-reaching pact in February between state attorneys general and five large banks. That set aside $1.5 billion in cash relief for Americans.

Most of the relief in both agreements is meant for people who are struggling to stay in their homes and need the banks to reduce their payments or lower the amount of principal they owe.

The $10 billion pact would be the latest in a series of settlements that regulators and law enforcement officials have reached with banks to hold them accountable for their role in the 2008 financial crisis that sent the housing market into the deepest slump since the Great Depression . As of early 2012, four million Americans had been foreclosed upon since the beginning of 2007, and a huge amount of abandoned homes swamped many states, including California, Florida and Arizona.

Federal agencies like the Securities and Exchange Commission and the Justice Department are continuing to pursue the banks for their packaging and sale of troubled mortgage securities that imploded during the financial crisis.

Housing advocates were largely unaware of the latest rounds of secret talks, which have been occurring for roughly a month. But some have criticized the government for not dealing more harshly with bankers in light of their lax standards for making loans and packaging them as investments, as well as their problems with modifying troubled loans and processing foreclosures.

A deal could be reached by the end of the week between the 14 banks and the nation’s top banking regulators, led by the Office of the Comptroller of the Currency, four people with knowledge of the negotiations said. It was unclear how many current and former homeowners would receive money or when it would be distributed.

Told on Sunday night of the imminent settlement, Lynn Drysdale, a lawyer at Jacksonville Area Legal Aid and a former co-chairwoman of the National Association of Consumer Advocates, said: “It’s certainly a victory for consumers and could help entire neighborhoods. But the devil, as they say, is in the details, and for those people who have had to totally uproot their lives because of eviction it may still not be enough.”

In recent weeks within the upper echelons of the comptroller’s office, pressure was mounting to negotiate a banner settlement with the banks, according to people with knowledge of the matter. The reason was that some within the agency had started to realize that a mandatory review of millions of bank loans was not yielding meaningful examples of the banks’ wrongfully evicting homeowners who were current on their payments or making partial payments, according to the people.

Representative of banking regulators did not return calls for comment on Sunday.

The biggest action against the banks for foreclosure-related abuses has been the $26 billion settlement between the five largest mortgage servicers and the state attorneys general, Justice Department and the Department of Housing and Urban Development after allegations arose in 2010 that bank employees were churning daily through hundreds of documents used in foreclosure proceedings without properly reviewing them for accuracy.

The same banks in that settlement — JPMorgan Chase , Bank of America , Wells Fargo , Citigroup and Ally Financial — are included in the current negotiations.

Under the terms of the settlement being negotiated, $6 billion would come from banks to be used for relief for homeowners, including reducing their principal, helping them refinance and donating abandoned homes, the people said.

The proposed settlement would also halt a separate sweeping review of more than four million loan files that the comptroller’s office and the Federal Reserve required the banks undertake as part of a consent order in April 2011.

Under the terms of the order, the 14 banks had to hire independent consultants to pore through the loan records to determine whether the banks illegally charged fees, forced homeowners to take out costly insurance or miscalculated loan payment amounts. Consultants initially estimated that each loan would take about eight hours, at a cost of up to $250 an hour, to go through.

The costs of the reviews have ballooned, though, according to people with knowledge of the reviews, in part because each loan file is taking up to 20 hours to review. Since its inception, the reviews have cost the banks about $1.5 billion, according to those people.

Pressure to reach a settlement with the banks has been building, particularly within the Office of the Comptroller of the Currency, amid widespread frustration that the banks’ mandatory review of loan files was arduous and expensive, and would not yield promised relief to homeowners, according to five former and current banking regulators.

In private meetings with top bank executives, these people said, regulators have admitted that the reviews had gone awry. At one point this month, an official from the comptroller’s office said the agency had “miscalculated” the scope and requirements of the reviews, according to the people with knowledge of the negotiations.

When the settlement discussions heated up this month, some banking executives said they felt they would be vindicated by the regulators. These executives said that they had raised objections to the reviews early on, but those concerns were largely dismissed by regulatory officials, according to the people with knowledge of the negotiations.

Instead, officials from the comptroller’s office, these people said, have used the loan reviews as a negotiating tool, telling banks that they can either sign on to a large settlement or be forced to pay billions over several more years until the consultants finish the reviews.

When regulators approached the banks to broach a settlement this month, they met first with Wells Fargo and proposed that the banks pay $15 billion, according to the people familiar with the discussions. After negotiations, though, the regulators agreed to $10 billion.

All of the 14 banks are expected to sign on.

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24 Responses

  1. so what happens to the poor schlumps who were blessed with a faniie mae owned mortgage before the ink dried at the closing

  2. I have always said, the ones who were robbed did not have to fill out a form for a review.

    “Under the terms of the order, the 14 banks had to hire independent consultants to pore through the loan records to determine whether the banks illegally charged fees, forced homeowners to take out costly insurance or miscalculated loan payment amounts.”

    See, ”they” were supposed to go through the loan records.
    They and their media wanted us to make the offer and they could choose to accept…moving us from creditor in the transaction by our signature to a debtor who said ‘they’ serviced our loan.

    problem is, the servicer that stole my home was a stranger to the transaction. I never paid them any money and when my servicer decided to ‘bail out and sell it self or whatever it did’, it held one payment to it and that servicer ended up with it.

    But if I write a check to ABC and FQZ cashes it, that’s not an agreement I had when I wrote it to ABC and it doesn’t make me under any contract with FQZ for future payments unless FQZ proves that they could give me clear title when I finished paying off my agreement with ABC.

    Seems someone didn’t have the paperwork, either ABC didn’t have it or FQZ didn’t take full ownership leaving me under double jeopardy to a real party in interest.

    anyway, lets see how the $3.5 billion goes. if somene’s home went through bankruptcy, it’s probably already considered settled.

    They only way the ‘creditor’ can stand in a bankrupt court is if both parties agree there was an agreement, even if it was robosigned.

    If I was in bankruptcy I’d probably say, these people I mean persons since they aren’t real but are bodies of a corporation, no soul, I’d say I think i owe them this much…notice the ‘think’, and then when it came to that third party intervener I never did business with, i’d say, and they are trying to steal my home. I don’t know them.

    Ah well, life is interesting.
    Fact. I’m out of a home I paid 10 years for plus interest, upkeep, improvements, etc…and I’m out of the property I had to discard or donate becasue my new place was smaller, and I lost the life experiences I would have had, had I remained and it was no one’s right to take those experiences away from me. They were not my Creator.

    But, it seems, not only can they change the dates of agreements, as that foreclosure settlement had three but they can change the agreement itself.

    Keep going.
    They have found me, I just know a bad deal when I see one and it seems out of 4 million poeple they could not even get 20% of the supposedly represented to accept the deal the ‘supposed’ representatives.

    That’s what I call nulification.
    Doesn’t matter if a judge, or politican or court comes to the agreement, if it doesn’t align with your will, then it’s not your agreement and you have a right and a power to refuse it, and stop accepting privileges of being shortchanged by their good ole boy agreements.

    We’ve been waking up.
    Property belongs to life, not fictions.
    Banks are fictions.
    I AM a state of life, a state of conscience, a free and independent state.
    Trespass Unwanted, Corporeal, Life, Free, Independent, State, In Jure Proprio, Jure Divino

  3. If their debt fraud is dissolved…where is our title & our big fat check for all of the payments they pocketed….?

  4. I know the crooks have’t gone anywhere….& I demand clear title & compensatory damages and other equitable relief for all of the intentional & permanent harm they caused me & my family. They are wolves in sheep’s clothes….I don’t believe a word these people say…It will take a severe rebellion by the people aided by God to get rid of these sadistic crooks. I don’t see the FED abolished or their banks have gone anywhere.

  5. Gotta Love Rick Santelli who wants to know what happens to the lunatics who stole $60.4 trillion dollars of our money…..

  6. All the banks are doing is buying time….CHEAP time.

    The more they leap frog from one settlement to the next, the more homes they can foreclose on and the more bad loans they make.
    The more money they can make.
    Let’s say, they are not going to go down without a fight.

    I am so relieved I decided not to send in (again) for the “Independent” Foreclosure Review. I said to myself, “Forget it, I am not going to prove financial hardship.” Why should anyone have to prove that?
    It’s so obvious. And, only to find out it’s a crap shoot. You may not get any compensation at all.

    So…on to the next settlement!

    We need to realize that the banks and the governments are both corporations. They are essentially the same and on the same side. Why is it that people keep expecting a different result from these entities?

    Further, these entities have all but been dissolved.
    Listen to the interview with Heather Tucci.
    http://www.americankabuki.blogspot.com

    The bad guys have been dismantled.
    The law is being restored.
    It’s time to re-educate ourselves and assert our independence.

  7. @ Mary. same thing happened with us and wells fargo home mortgage they went as far as telling us not to pay but now its Wells fargo na forcloseing. i heard they were 2 different entity?

  8. funny they say past abuses when it is still going on

  9. The scurves don’t own anything…they are big fat IMPOSTERS…

  10. Sue the banks yourselves. We can help you. Call 818.453.3585 Consumer Rights Defenders. Specializing in pro se litigation. Happy New Year to all and keep the faith.

  11. Mary, OCWEN probably holds NOTHING, that’s why you’re going nowhere. Hold off on the 4506T, baby, if you haven’t already sent one. They’re after your other assets after they take your house.

  12. This is another attempt to sweep the theft and financial rape of the American public under the carpet.

  13. …..and cleaning it out.

  14. For sure the fox is guarding the hen house…..

  15. What they are really doing by giving unqualified borrowers car loans and credit is stealing and that will cause more inflation.

  16. Yet the local media reporting record car sales on new cars …. How can that be possible when half the country is unemployed or underemployed….? A friend of mine works in a new car store & said people on unemployment are getting car “loans”….! No doubt the risk is more minimal when they know they can just repossess it if they don’t pay… Sounds like another disaster in the making.

  17. ….we all grow older and wiser and more cynical.

  18. Anyone who is “happy” about this needs to do the basic math. $3.25 billion divide by 4 million homeowners is about $800 each. No one is going to feel good about losing one’s home, ruined credit, waiting several years for any kind of help and receiving $800. Speaking of ruined credit, how will that be compensated in this settlement? It’s a disaster. Plus, don’t expect the check anytime soon. These things move at a behemoth pace and, as it slogs along for another year,

  19. Notable by its absence from the list of ‘servicers’ in the ‘foreclosure review’ ad published over a week ago in the local paper, was the biggest and dirtiest of them all: Ocwen. They have consistently turned me down after demanding I jump through every administrative hoop in the book. Every document, everything they asked for, they got. There was absolutely no reason to turn me down for a modification, yet still they kept at it. Their minions in India make the whole thing an absoute nightmare. The latest: I gave them a new HAMP form showing my new job info PLUS paystubs (what they’d asked for) and – 2 weeks later, received a letter denying it as being ‘illegible’!! What the…? I emailed the same scanned info to a friend that I had to Ocwen, and, as expected, he had no problem reading anything. This outfit (I won’t dignify them with ‘company’) is pulling every trick in the book to deny so they can take my house with what small amount of equity is still left after their breath-taking ‘fees’…time to have an audit and look for a real attorney…I did log onto the Federal website that was advertised an d try to pull up my property adress under both US Bank as well as HSBC, the holders according to my mortgage papers but came up empty, so guess Ocwen holds the cards…for now.

  20. Again, we the homeowners who had their homes stolen from them, get screwed!!! When will they start listening to and helping us??? NEVER is the appropriate answer to that question. Because they have deep pockets (deepened by their criminal acts against the American Homeowners), big banks are being rewarded and the victims are being kicked in the teeth yet again!!!

  21. Rule of Law, what a joke. There’s only The Law of the Jungle. We are sheep, nothing more. Homeowners are the enemy of The State.

  22. The truth is….we are funding our own robbery. This settlement was all figured into the bailouts. These crooks never pay…the cost of these crimes are truly insurmountable for the U.S. TAXPAYERS. They won’t call this criminal, just reckless because they have to keep the fraudclosures going.

  23. The devil is in the details is absolutely correct….and it was planned that way through secret negotiations between the banks and the State AGs. There is mass criminality here and the FEDSTERS don’t want to pay for it because they never pay for anything. They are the entitlement people who believe they are above the law. The rule of law must apply to everybody or it applies to nobody.

  24. The banksters will also get credit for homes they “donate” & I’ll bet these will be those prime properties no one wants in communities already decimated by this meltdown. This “settlement” on the backs of the 300,000 who took time to figure out the “review” process and assemble their filings is an outrage because we’ll now get either nothing or next to it. And good luck finding and funding a quality attorney who knows their stuff and has the temerity to open a judges eyes. Bottom line there’s no justice for those outside the “in” crowd of the 1%.

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