The banks are not getting any get-out-of-jail-free cards, claims against MERS and the securitization process are still very much on the table.
On the other hand, did I learn anything new about the massive frauds perpetrated by the banks? Not really.
There are pages listing what the government has now labeled as “Unfair, Deceptive, and Unlawful Loan Practices”.
The settlement does say that the banks violated federal laws, that they wrongfully denied modification applications, and overcharged for ‘forced place insurance, among other misdeeds.
It even finally acknowledges that the banks engaged in robosigning.
But these are things that my clients and I have long known.
If you’ve read theWall Street Journal,or theNew York Times, or any thorough news story on the housing crisis, there’s little in the mortgage settlement’s pages that will surprise you.
And that’s thoroughly disappointing. What the government has presented to the public is a complete white-washing of the robosigining and “fraudclosure” scandal. It acknowledges that the banks committed certain indiscretions yes, but I couldn’t find one concrete example, not one thorough examination of how it occurred. (more…)
Bank of America to Reduce Principal For 200,000 Underwater Homeowners
First some good news, if you’ve got an underwater mortgage owned byBank of America.
BofA has come to a separate agreement with the US government to to help reduce some the fines it owes to the Housing and Urban Development Agency from last month’s huge settlement.
Bank of America has agreed to cut the principal of more than 200,000 underwater loans, and they are cutting them by an even larger amount than the other 4 banks. In exchange they’ll owe about $850 million less in fines.
If you’re a Bank of America customer (and the loan has to be owned by them, Fannie and Freddie loans don’t count) and you qualify, you will have the opportunity to cut your mortgage balance to your home’s current value.
The reductions will average more than $100,000,according to the Wall Street Journal.This is big news because the settlement only promises to reduce the principal of eligible loans to 125% of their current value.
Bottom line, that’s 200,00 homeowners who won’t be underwater anymore and will have a real chance of staying in their homes. But I wish the other banks would step up and follow Bank of America’s lead.
Now here comes the bad news, for Florida homeowners facing foreclosure. We could be seeing a return to the days ofFlorida’s infamous ‘rocket docket’ if the state legislature approves a one time $4 million stipend which will allow Florida’s court to hire more judges and case managers for the foreclosure courts. (more…)
If there was anything positive that came out of the prolonged discussions between the states and the banks on the mortgage servicing settlement,it was that banks were reluctant to go full steam ahead in the foreclosure process while talks were ongoing.
But even before the settlement was announced, we saw signs that pointed to more foreclosures in 2012.
Now that the settlement has been agreed to, the training wheels are off.
It’s petal to the metal folks. One thing that the settlement does for the banks is provide them a blueprint for how to proceed in the foreclosure process without getting their fingers stuck in the cookie jar.
Which means borrowers will once again have to defend themselves just as rigorously as they did pre-robosigning.
I’ve been asked if the settlement changes my advice to homeowners, to which I reply, ABSOLUTELY NOT!
You must continue to stand your ground. If you are in foreclosure or about to enter foreclosure, I will say what I have always said, you must fight the banks and force them to kick you out of your home.
The settlement may have changed the rules for the banks, but it shouldn’t change the rules for you, the homeowner. The banks will not transform into wonderful and charitable companies just because the settlement might penalize them.
Make no mistake about it, they will continue to come at you and come at your hard. (more…)
For 5 years now we’ve been a huge champion of the short sale. We’ve been banging and banging away at the banks because they didn’t share our opinion.
There has long been an institutional reluctance among our nation’s lenders to embrace the short sale, but it appears they are finally coming around.
According to Corelogic’s most recent numbers, short sales accounted for 9 percent of all residential transactions last November.
In January of 2008, they represented only 2 percent. That’s a 350% increase in the amount of homes sold at short sale.
Hallelujah.
It may have taken them a while, but the banks are finally letting go of the arcane notion that foreclosing on a delinquent borrower is always the best option for them.
The short sale has and will always be a much better alternative for the banks. In many cases, when modification isn’t an option, a short sale is better for the existing homeowners as well.
It’s good for the banks because it’s the fastest way to bring down their massive backlog of foreclosures.
Now that more and more foreclosures are lingering in the courts, banks now realize its the simplest way to get these homes back on the market, sometimes in just a few months.
They may not get back the full value of the home but their losses are about 15 percent less than if the home was foreclosed on, according to Bloomberg News.
It’s good for the borrower because they can walk away, legally, with little or no debt at all. Some banks are even offering cash incentives, as much as $35,000 in some cases, to entice homeowners to sell back their homes. (more…)
The clock may have run out on this year’s Super Bowl (Way to go Giants!!) but there’s still a few minutes left in this year’s REAL grudge match, the Banks vs. the Attorney Generals.
It’s 4th and Inches, the score is tied, and it would be nice to avoid overtime.
Today we could learn whether the much-discussed robo-signing settlement with Wells Fargo, Bank of America, JP Morgan Chase, Ally Financial and CitiGroup will come to pass, and in what form.
With California AG Kamala Harris returning to the negotiating table, the deal looks closer than ever to being sealed. Harris, who represents the state with the largest amount of foreclosed homes, has rightfully been hesitant to sign off because her state has the most to gain, or lose, from this deal.
We were initially very hesitant to see this deal go through ourselves, but the time has come for it to put to bed.
Why?
Because we feel the deal in its current form does a lot. Does it help every single homeowner who’s underwater? Of course not. There is no deal that will.
But here is who it does help. The homeowners who have fought to keep their homes from day one, who were at the forefront of these legal challenges against the banks. Much of what we have learned about robo-signing and the lack of standing banks had to bring foreclosure, would not have come to light without these crusaders, and its time they got a reprieve.
In theory it also helps the responsible homeowners, the ones who paid their mortgages on-time and whose homes went underwater through no fault of their own. They too need to be rewarded. (more…)
We here at theSouth Florida Law Blog decided to clock in a few hours this weekend, because if we didn’t we’d probably fall behind President Obama’s new man-in-the trenchesEric Schneiderman.
President Obama only announced this new investigative unit during Tuesday’s State of the Union, yet the “check”, or in this case the subpoena, is already in the mail.
If you were skeptical that Obama was still interested in the status-quo when it comes to the banks and doing business, may we present Exhibit A.
Eric Schneiderman is turning himself into a modern-day Elliot Ness.
You remember Ness don’t you?
The federal agent whose team of “Untouchables” couldn’t be bought off and helped bring down Al Capone?
Schneiderman too has the era of a man who will not be co-opted. If anyone can stay above the fray and not be reeled in by the banks and their money, he can.
Investigation Going After Cause of Housing Crisis
Schneiderman has stood up to the President before, openly opposing the settlement agreement that we here at the South Florida Law Blog have railed against. And now he is Obama’s point man for placing blame and creating accountability for causing the worst economic crisis in the US since the Depression.
Elliot Ness
The Huffington Post is reporting that outside of claims directly relating to robo-signing fiasco, the banks will not be released from the threat of prosecution for the vast majority of securities-related crimes. (more…)
Like the characters in "The Blair Witch Project", the banks are running scared!
Well what a wild week it has been. When we came to work on Monday we feared President Obama would put the housing crisis to bed without ever holding the banks’ feet to the fire.
The settlement with the banks, which we have blogged about ad nauseam this week, seemed as sure as a chip-shot field goal.
But thanks to President Obama’s suddenly get-tough approach, as evidenced by his State of the Union speech, we’ve seen the banks’ kick go wide-right and now all bets are off.
Can There Be Real Change In Mortgage Industry?
Now we are not completely sold that things will play out exactly as homeowners would like, this is of course the federal government we’re talking about, but for the first time we have a true sense of optimism. The President may finally be seeing things our way, and we want to throw our full support behind him.
There is no doubt cages have been rattled in the mortgage industry, and nerves have been frayed. If Obama’s plan to re-write the foreclosure rules didn’t have some kind of teeth, then we doubt we’d be seeing the type of reverberation thorough the media and the top echelons of government that we’ve detected in the last few days.
Banks Are Fearful of Settlement Collapse
The settlement could be falling apart at the seems, at least JPMorgan Chase CEO Jamie Dimon thinks so. He told CNBC this morning that Obama’s announcement to investigate the packaging and servicing of mortgage loans could stop the settlement cold. (more…)
In the weeks after the mortgage settlement was announced by the Federal Government, I waited under baited breath to the see it in its entirety.
