When you read housing data about how foreclosures are at their lowest rate since 2007, recognize that analysts credit more foreclosures, including those with faulty documents, in the previous year for that figure. And there is consensus among the analyst class that these illegal foreclosures “must” happen to clear the system. The right of a homeowner to be treated properly, legally, and with due process never enters into these discussions.

The design of HARP 2.0 has artificially profited banks at the expense of homeowners. The banks, in a very strange and apparently coordinated manner, have unilaterally decided that they will only perform HARP refis for underwater borrowers on the loans they already service. This eliminates competition for those loans. And the immediate effect of that is higher costs for underwater borrowers, who are trapped and cannot get a refi with anyone but their old servicer. So the servicers raise the interest rates they offer on the refi. In some documented cases, the closing costs, which are almost entirely profit for the bank, are higher than the savings on the refinance.

Over the next several weeks, these bank accountability leaders told me they will step up their direct efforts against the banks and also the Administration.

In a speech yesterday, Acting Director of the Federal Housing Finance Agency, Ed DeMarco, said that he would make a new determination on the efficacy of principal reduction for underwater borrowers in Fannie and Freddie-backed loans by the end of this month. The GSEs own or guarantee $5 trillion worth of home mortgages, a substantial chunk, maybe 60%, of the housing market. So even though they only hold 29% of the seriously delinquent loans, their course of action on principal reduction is obviously critical.

Pro Publica continued its jihad against Ed DeMarco yesterday with yet another piece blaming him for the sins of the Administration’s housing policy. This is just an overview piece that muses about how to best get rid of DeMarco. Actually, it’s a bit off-message, because they’re just supposed to say that the White House has no choice and this one dude is holding up an economic recovery single-handedly.

There are claims the housing market is recovering. But that ignores the shadow inventory, foreclosed homes that banks have deliberately kept off the market, which number in the millions. With foreclosure starts jumping, this inventory will make its way to the market and sell at a huge discount, reducing prices overall. Now there’s a new scam to allow investors to buy these in bulk and run the old Wall Street financing schemes again.

HUD Secretary Shaun Donovan faced the Senate Banking Committee today, and he said that the foreclosure fraud settlement will shortly be made public.

Bank of America, seeking to punish those who want to hold them accountable, will stop selling new mortgages to Fannie Mae, something that Fannie is supposed to be hurt by, I guess. Notice the lack of the words “Freddie Mac” in that last sentence I wrote.

Elizabeth Warren, the Harvard professor, consumer advocate and candidate for US Senate in Masachusetts, said today that the Federal Housing Finance Agence (FHFA) must increase their actions on behalf of homeowners, including principal reductions, something that the agency has resisted to this point. Speaking along side Barney Frank, Mike Capuano and MA AG Martha Coakley, Warren’s message was aimed straight at FHFA’s Ed DeMarco, who’s been stalling on principal writedowns.

Shaun Donovan, the Secretary of Housing and Urban Development, made some news today at the US Conference of Mayors, by saying that a foreclosure fraud settlement was imminent and that it would include principal write-downs for up to one million borrowers.