If you live in New York, Nevada, Massachusetts or Delaware, then you can rest assured that your attorney general is pretty steamed about the robo-signer crisis. So steamed, in fact, that they are doing everything possible to prevent the current proposed settlement with the nation’s biggest lenders from happening. A lot of people support this reluctance to cave in and, from many perspectives, let the big banks “get away with it.” However, the department of Housing and Urban Development (HUD) and the Justice Department are less than thrilled with the AGs’ behavior. In fact, they are taking steps to get some cooperation, and the sooner the better.
For starters, both HUD and the Justice Department have singled out New York AG Eric Schneiderman to abandon his objections publicly. Schneiderman is protesting that the settlement would preclude him from further legal action against offending servicers. HUD spokespeople emphasize that some forms of legal action would still be an option, just not all, and HUD Secretary Shaun Donovan has basically accused Schneiderman and the others of stalling an “immediate opportunity to help a large number of borrowers to stay in their homes” if they block the settlement[1]. Nevada AG Catherine Masto has made it clear she is not really in the mood to sign on the line either, with a public statement to Bloomberg that she would be “very cautious” about signing a statement that would interfere with her own civil and criminal investigations into Bank of America’s foreclosure practices.
Another issue for many AGs is whether or not lenders will be required to provide principal reductions on some or all loan modifications. While most lenders are holding firm against – and most AGs are holding firm in favor – Bank of America has recently announced it will consider this option. The lender is also pursuing talks with individual AGs in an effort to remove itself from the general fray[2]. There are also rumors of a settlement that would allow some AGs, Schneiderman included, to continue their fraud investigations once the settlement had been implemented.
This sounds like a conflict with no resolution. Do you think that there should be a nationwide settlement with the “big banks” or should each state tackle the lenders on its own?
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[1] http://www.dsnews.com/articles/hud-and-justice-department-seek-support-for-servicer-settlement-2011-08-22
[2] http://www.bloomberg.com/news/2011-08-16/bofa-weighs-foreclosure-deal-with-n-y-probe.html
These were actually criminal acts and the state AG’s investigations and prosecutions should take precedence. Any prosecution should be against management, not the corporation.
Of course each state should tackle each lender on their own. The problem is the feds can’t let that happen because they can’t protect their buddies at the big banks if that happens. So it won’t happen because the feds don’t want it to happen.
I agree with the few Attorneys General to not let the banks off. Too much money has been given to them with our tax paying bailout. I understand that the people in charge of theses banks received the bailout money as bonuses for fucking up our Country.To hell with the banks, just fix the housing situation so that we homeowners can get our principal reductions to current market value in all the States!
Sincerely,
David Young
The federal government should stay out of it and let the states do what is necessary to bring many of these bankster criminals to justice. The federal government is run by the banks and it should not be left up to them to settle this matter. We see that they are determined to let their buddies off the hook. Why is it I get this sinking feeling in my gut that the people are going to lose out again and bear most of the brunt in bailing out the nation’s biggest criminals? Here is another case where the pursuit of capitalism is in conflict with democracy – and democracy always takes a backseat to capitalism.
People, write to your governors and AGs – tell them to stand fast. We MUST let them know they have our support. We always lose because we are not organized!
Principal reduction is not a good idea. It would kill the housing market and hurt homeowners who will one day want to sell their home. What lender in their right mind would keep on making loans to new buyers knowing that someone can come along and reduce the principal or the buyer’s obligation to pay back the loan????
The states need to continue with their cases. The banks have the Feds fooled again. There must be principal reductions because the bank inflated values in most areas will never be achieved again. If you are in real estate you know very little is selling and what is selling is heavily discounted. A major price correction is needed!
For the AG’s to require prinicpal reduction on existing mortgages would be a disaster. I agree with short sales, where the owner sells and the bank may settle for a lower payoff. That type of principal reduction works, but it should be stream lined. If banks would reduce the principal of existing mortgages just because home values are lower now, then everyone will line up for that program.
Felonies….millions and millions of felonies.
Seen it first hand and the JUDGES that these felonies (Fraud on the Court) were perpetrated against are ‘turning the other cheek’?
It’s insane. WE, as the home owners would have 3 hots and a cot IF we had done this…the banksters get BONUSES! Their Attorneys are ‘allowed’ to simply change firms, After the Partners all ‘fall on their swords and retire”(when many of them made $20-$40MILLION DOLLARS EACH off their foreclosure practices (including those ILLEGAL Practices) Last Year Alone! David Stern Is a CLASSIC Example in Florida. “Su Casa es Mi Casa”….We Want His Thieving Greedy Head on a STICK….but no, the Feds Can’t Do That because it’ll come back on BoA, Countrywide(sic), WF & More because they were in on (or Facilitated) this Multi TRILLION DOLLAR Scam against both millions of home owners and hundreds of millions of the Tax Payers in this country.
We’ll get no justice, not a chance.
As for Principal Reductions, regardless what the former poster says….it’s NEEDED (and NOW) to correct the market SOONER than Later. IF Not Now…then When? Otherwise, Everyone strategically defaults, slowly, drawn out over years (until they make THAT a felony and come to put all of us in prison instead of the people who caused this), the market simply NEVER RECOVERS. To ‘wait’ is to VOLUNTEER for more of the past 4 years of Chinese Water Torture watching prices FALL, either a little or a lot, depending on the quarter, yet always overall DOWNWARD. Socialism at it’s finest. Who needs ‘private’ property anyway, right?
Home owners are becoming less ignorant to what the banks did from 2001-2008. It is great to see other bloggers getting the word out. I shared this with my readers and hope to see more reporting of this issue.