It’s finally official. The so-called $25 billion foreclosure settlement has been signed off by a federal judge.
This comes after the settlement was filed in court last month. DC District Judge Rosemary Collyer did the honors Wednesday.
I won’t rehash my thoughts about what’s good and what’s bad about this settlement. Everything that needs to be said about it has been said.
You and I know that the banks will get more of a pass than they are entitled to for all of their robosigning shenanigans. In reality they are really only paying out about $5 billion in actual money, and I’ve still haven’t seen a single banking officer jailed.
Just remember this fight ain’t over yet!. This settlement was a necessary step, in order for the feds to move on to their investigation into securitized trusts.
THAT is where the banks will hopefully get what’s really coming to them.
Now that the settlement is official, the new government agency that will be watching the banks is now open for business.
North Carolina Banking Commissioner Joseph Smith is going to oversee the office and how the banks will receive “credits” towards the settlement for providing homeowners mortgage relief.
Relief, unfortunately, will often come in the form of transactions, such as short sales, that the banks were already doing before the settlement was announced.
“By itself, this settlement will not remedy every problem that system faces. But trust in our mortgage system can move forward if we use this opportunity to show fairness, transparency and accountability,” Smith said. “
Just as I predicted! Last month I told the Palm Beach Post that banks had been given the green light to prosecute new foreclosure cases, and lo and behold, that is exactly what has happened.
The Post now reports that Palm Beach County saw a 65.4 percent increase in new foreclosure filings last month, compared to March of 2011.
Palm Beach Clerk and Comptroller Sharon Bock called the jump “dramatic”. I call it completely expected. The settlement has given banks a road map on how to proceed.
But as I have already said, with the Clerk’s Office about to have their budget significantly reduced, you will see another logjam in the court system.
Without the necessary support staff, it will be nearly impossible for the courts to keep up with the banks.
Another idea I’ve long advocated is beginning to see the light of day.
The Federal Reserve has laid out the groundwork on how banks can rent out foreclosed homes. There is nothing to be gained by allowing homes to remain empty, so this is an absolutely necessary step if the housing market is going to recover.
Of course there are many landlord/tenant, state and federal housing regulations that will need to be followed, and we can’t trust the banks to be good landlords on their own.
In their report the Federal Reserve says that banks “should use a framework that appropriately records the organizations’ rental decisions and transactions as they take place”
Let’s just hope that those records are better than the ones the banks kept during the robosigning era.
Have a great Passover and Easter Holiday!