Iowa attorney general Tom Miller has announced that the 50-state foreclosure probe begun in October as a response to the robo-signer fiasco is “closer” to a settlement and that state and federal officials plan to monitor banks to ensure that they “keep their promises”[1]. Although Miller has not disclosed the terms of the proposed agreement, he said via phone interview that a monitor intended to enforce those terms is critical to the success of any settlement. “We have to make sure that they do what’s promised,” explained Miller. “That’s going to be very difficult,” he added.
Banks proposed a $5 billion settlement several months ago, but the AGs want “considerably” more, said Miller, although he did not say how much officials are seeking. Major lenders involved in the investigation – Bank of America, JPMorgan, Wells Fargo and Citigroup – all declined to comment on Miller’s statements, saying that they considered the negotiations to be private and, as a result, will not provide details.
Although all 50 states agreed to conduct the investigation as a whole, rumors have swirled that part of the problem in coming to an agreement lies in the AGs’ inability to agree on what should be part of that agreement. While Miller and many others want principal reductions as part of the settlement, other AGs agree with lenders that this type of settlement rewards “bad behavior” and defaults – strategic and otherwise – and punishes people who have managed to keep their mortgages current. One bank representative described the situation as “just so many cooks [in the kitchen] that is makes it very difficult”[2].
Do you think that a settlement will ever be reached?
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[1] http://www.bloomberg.com/news/2011-06-10/foreclosure-accord-is-closer-should-include-monitor-iowa-s-miller-says.html
[2] http://www.washingtonpost.com/business/economy/foreclosure-settlement-divides-state-attorneys-general/2011/06/07/AGcwyRLH_story_1.html
There is more on the “Big Banks” and penalties you sent out today. May want to read the Bankruptcy case cited in the article. It is the domino that showed the banks may have bigger issues to resolve ALONG with government fines.
Joanne
Of course a settlement will be reached…with the banks coming out on top again.
Those AGs who are agreeing with the lenders are giving a phony reason for not going along with the settlement. Very few people will be rewarded as their property values are far below what their mortgages are worth. It was a crisis caused by the bank’s criminal behavior, why should we always be left holding the bag?
The banks have already profited twice by defrauding all those investors and with the bailout money they received from the taxpayers.
If it were some petty thief who forged documents perpetrating a scam, he would be doing 7-10 years in prison. But, because there are big names involved, the government is stooping to kiss the bankster’s greedy asses and cutting a sweetheart deal with no criminal charges and definitely no jail time.