Florida homeowners might have a new definition for bank robbers… With details now coming to light on a possible deal between banks and the state governments, it’s seems the chances of these financial institutions being held accountable is less and less likely.
South Florida law blogger and foreclosure attorney Roy Oppenheim strongly opposed the deal, which is being sought by state Attorneys General including Florida’s Pam Bondi, in a recent FOX newspiece. Now New York Times columnist Gretchen Morgensen has backed up Oppenheim’s assertion that the deal, in its current proposed form, is not worth the potential relief that it might provide to homeowners.
Oppenheim called the reported $20-25 billion dollars in principal that homeowners would be forgiven for “a drop in the bucket” and now Morgensen reports that deal would only cost the banks between 3.5 and 5 billion dollars in actual cash, to be paid by about a dozen or so institutions. The rest of the banks’ penalties would come in the form of credits.
While HUD secretary Shaun Donovan insisted in the Times article that the settlement will hold banks accountable, both Morgensen and Oppenheim remain unconvinced. Oppenheim told FOX the deal isn’t worth a “deal with the devil”, and that it robs homeowners of the chance to bring legal action against the banks.
And will it really provide the relief homeowners are seeking?? The Times piece points to a 2008 settlement involving Countrywide Financial that promised $8.7 billion in relief to borrowers in Illinois and California that failed to deliver anything close to that. And California is one of several states that has backed out of this current negotiation.
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Florida Attorney General Bill McCollum has issued subpoenas to three South Florida foreclosure law firms seeking detailed financial, client and employee records.
