The revised HARP program intended to encourage refinancing at lower interest rates was announced last year, and the updating of Fannie Mae and Freddie Mac’s Desktop Underwriter program was supposed to make the changes turnkey, leading to mass refinancings allowing any lender to refinance another lender’s loan. But
Kathleen Pender reports that, while this was supposed to free up newly eligible borrowers to shop around for the best refi, this isn’t happening

The government is already experimenting with bulk sales of foreclosed, vacant properties (Fannie Mae actually has a right to rent pilot program, but they keep it well hidden). Why not eliminate the middle step and just keep the family in the home? It saves everyone lots of aggravation and can still work on a business level.

Being the Americans that we are, we have focused on Staff Sergeant Robert Bales and his mental state rather than the 16 Afghan civilians he killed, all of whom had names too. But indulge me for a moment to address one aspect of Bales’ mental state. It turns out that he had a mortgage problem. And as such, he probably was a victim of a violation of the Servicemembers Civil Relief Act.

Before the foreclosure fraud settlement was announced, high-level officials told me that the still-secret HUD IG report detailing some of the crimes of the mortgage industry would be released when the settlement terms were filed in federal court. That document was indeed released today, and The New York Times reviewed it; they find that top bank managers really were responsible for the criminal conduct

How could a private citizen’s whistleblower suit get extinguished in a federal settlement? We haven’t seen the terms, of course, but apparently the Mackler suit could have been filed under the False Claims Act on behalf of the US government, which was being defrauded. Mackler probably got a payout for his services, but the suit sought $5,500-$11,000 in fines per violation, which could have ranged into the billions. So when faced with documented proof of noncompliance with and abuse under HAMP, the government simply passed it off and folded it into their settlement, and for good measure gave back all the incentive payments owed to the same banks alleged to have defrauded them in this lawsuit.

If there’s anything approaching accountability in the Obama Administration’s actions against the banks, I’m not seeing it.

I mentioned yesterday, when reporting on the whistleblower allegations of Bank of America defrauding HAMP, that the bank made some sort of side deal in the foreclosure fraud settlement that would deliver deeper relief to a certain subset of borrowers. What was not reported was that this will get BofA off the hook for $850 million of their obligation.

Fresh off his Daily Show appearance, HUD Secretary Shaun Donovan announced that Bank of America will provide additional assistance to homeowners under the as-yet undisclosed foreclosure fraud settlement. BofA will write down to market value, according to Donovan, over 200,000 loans that correspond to certain criteria: if the homeowners are underwater, delinquent by more than 60 days, and saddled with payments that are over a quarter of income, then they must be offered the mod. These are slightly better terms, we are told, than the rest of the settlement (other banks aren’t required to offer mods to everyone who fits the criteria, and they can write down to within 120% of loan-to-value, not market value).

Not only do Too Big to Fail banks want an implicit guarantee against their demise, not only do they want free money from the government to prop them up, but they also want as much secrecy as possible about their operations and their finances. That’s at the heart of this latest push to get the Fed to not disclose the most recent round of stress tests.

A new citizen action site called F the Banks (the F stands for foreclose, I’m told) has kicked off their campaign by taking aim at Bank of America in a series of actions throughout the spring. The first one coincided with Leap Day protests put on by the Occupy movement. At Zuccotti Park, writer Matt Taibbi passed around this article, which I think he wrote exclusively for the event and not for Rolling Stone. It’s a gleeful broadside at BofA.

Another income stream has opened for the banks: debit cards to deliver benefits. Banks issue the debit cards, which allow recipients to access welfare or unemployment benefits, and they make a small profit on fees from the services. Now Bank of America has a non-bid contract from South Carolina to have you use their debit cards, for a fee, for your tax returns.