Excerpt: "Prepare for a disappointment. As early as this week, federal bank regulators and the nation's big banks are expected to close a deal that is supposed to address and correct the scandalous abuses. If these agreements are anything like the draft agreement recently published by the American Banker - and we believe they will be - they will be a wrist slap, at best."
A gate to a foreclosed home is locked with a chain and padlock in Richmond, California, 04/15/10. (photo: Getty Images)
Banks Are Off the Hook Again
10 April 11
mericans know that banks have mistreated borrowers in many ways in foreclosure cases. Among other things, they habitually filed false court documents. There were investigations. We've been waiting for federal and state regulators to crack down.
Prepare for a disappointment. As early as this week, federal bank regulators and the nation's big banks are expected to close a deal that is supposed to address and correct the scandalous abuses. If these agreements are anything like the draft agreement recently published by the American Banker - and we believe they will be - they will be a wrist slap, at best. At worst, they are an attempt to preclude other efforts to hold banks accountable. They are unlikely to ease the foreclosure crisis.
All homeowners will suffer as a result. Some 6.7 million homes have already been lost in the housing bust, and another 3.3 million will be lost through 2012. The plunge in home equity - $5.6 trillion so far - hits everyone because foreclosures are a drag on all house prices.
The deals grew out of last year's investigation into robo-signing - when banks were found to have filed false documents in foreclosure cases. The report of the investigation has not been released, but we know that robo-signing was not an isolated problem. Many other abuses are well documented: late fees that are so high that borrowers can't catch up on late payments; conflicts of interest that lead banks to favor foreclosures over loan modifications.
The draft does not call for tough new rules to end those abuses. Or for ramped-up loan modifications. Or for penalties for past violations. Instead, it requires banks to improve the management of their foreclosure processes, including such reforms as "measures to ensure that staff are trained specifically" for their jobs. The banks will also have to adhere to a few new common-sense rules like halting foreclosures while borrowers seek loan modifications and establishing a phone number at which a person will take questions from delinquent borrowers. Some regulators have reportedly said that fines may be imposed later.
But the gist of the terms is that from now on, banks - without admitting or denying wrongdoing - must abide by existing laws and current contracts. To clear up past violations, they are required to hire independent consultants to check a sample of recent foreclosures for evidence of improper evictions and impermissible fees.
The consultants will be chosen and paid by the banks, which will decide how the reviews are conducted. Regulators will only approve the banks' self-imposed practices. It is hard to imagine rigorous reviews, but if the consultants turn up problems, the banks are required to reimburse affected borrowers and investors as "appropriate." It is apparently up to the banks to decide what is appropriate.
It gets worse. Consumer advocates have warned that banks may try to assert that these legal agreements pre-empt actions by the states to correct and punish foreclosure abuses. Banks may also try to argue that any additional rules by the new Consumer Financial Protection Bureau to help borrowers would be excessive regulation.
The least federal regulators could do is to stress that the agreements are not intended to pre-empt the states or undermine the consumer bureau. If they don't, you can add foreclosure abuses to other bank outrages, like bailout-financed bonuses and taxpayer-subsidized profits.
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Comments
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Integrity is simple: "If you knew or suspected you were participating in a Ponzi scheme, would you continue to participate? Or would you call an attorney, the FBI and/or the DOJ? And if you did continue to participate would you be aiding and abetting an illegal activity?"
They're stopping our cash flow. Take what you can out of the banks and cut up the credit cards you can and stash that money away. Get it out of the banks hands and in yours. Slow em down at least..grp
Title 42 U.S.C. § 1983 has developed to the point that it provides a remedy for the violation of federally-protected rights by governments and its employees. In 1961, the Supreme Court issued its landmark decision of Monroe v. Pape, 365 U.S. 167, 81 S. Ct. 473, (1961) in which Justice Douglas, writing for the majority, determined that the policy behind the statute was "to afford a federal right in federal courts because . . . claims of citizens to the enjoyment of rights, privileges, and immunities guaranteed by the Fourteenth Amendment might be denied by state agencies." 365 U.S. at 180. Monroe thus signaled the resurrection of § 1983, and the role and influence of the federal courts in enforcing civil rights and liberties has never been the same since. Think about it.
With banks pulling foreclosure cases out of courts by the thousands because they used fraudulent documents to foreclose, this is beyond disappointment.They are making it legal then they will refile.
Last week 60 Minutes showed the fraud, actual filed documents used to foreclose using names A Bad Bean, Bogus Assignment, I felt like a major step forward was made. As best documentary 2010 was "Inside Job" that tells all, and as producer Mr Ferguson warned before excepting the Oscar, not one executive or ceo has been charged 2 years after the crises. Time to unite under "We Are One". See People Power Not Corporate Power on this site.
The fall out happened in 2008.. Now when was Obama elected? How quick did we go to war when the little Bush stole the elections? Closed door meetings with oil giants.. We don't get this way in three years.... It takes dozens. Cp. Pierson 101st Airborne, Vietnam.. Lend a hand to RSN folks! Thank You. ^i^
"The Obama administration appears to have delayed (deferred, suspended, or slowed) prosecution and civil litigation against executives of banks, mortgage companies, and other financial entities presumably until the economy recovers sufficiently so as not to interfere with that recovery.
"Do you, sir, plan to reinstitute and/or reinvigorate these deferred investigations, prosecutions, and civil litigations against financial executives and entities implicated in causing the economic collapse when the economy recovers?"
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