Part III analysis of the foreclosure fraud settlement docs. An Exhibit explains servicers will first have up to 180 days to start implementation, which will then occur using a set of “monitors” selected by (even from) the banks themselves. Only later do independent regulators get to see compliance reports.
|By: David Dayen Tuesday March 13, 2012 2:05 pm|
|By: David Dayen Thursday February 9, 2012 5:30 am|
This settlement arises from multiple abuses found in the servicing of loans and the foreclosure process over the past several years. At the height of the housing bubble, banks sliced and diced mortgages and traded them with little regard for the rules following land recording or securitization to such a sloppy extent that they lost track of the true owner on potentially millions of homes.
To cover up for this massive failure, banks and their servicing units have been found to have routinely forged, back-dated and fabricated documents at county recorder offices and state courts across the country. Furthermore, they employed “robo-signers,” who signed hundreds of thousands (if not millions) of documents and affidavits without any knowledge of the underlying mortgages. In addition, investigations uncovered massive servicing abuses, including illegal fees charged to borrowers, putting borrowers into foreclosure at the same time as they were working out loan modifications, failing to honor previous settlements where promises were made on modifications, and countless other errors that maximized servicer profits and gouged homeowners.
There are also cases of wrongful foreclosures where homeowners have been turned out of their homes without just cause, and servicer-driven foreclosures, where servicers illegally added late fees and applied payments inaccurately, pushing the homeowner into foreclosure. This is but a smattering of the examples of foreclosure fraud and servicer abuse found in a series of interlocking investigations, court depositions, reviews of documents in registers of deeds offices, and homeowner testimonials.
|By: David Dayen Thursday February 2, 2012 8:56 am|
The initial measure of whether or not the banks are following the terms of the settlement will come from “internal quality control groups.” In other words, the foxes will guard the henhouse. The internal quality control groups will turn over quarterly reports (so abuses from January would theoretically not get discovered until April), and only at that point would the monitor be allowed to let a third party review the report if he finds improper implementation of them. But basically, this extends out the enforcement process by months and submits it to an initial gatekeeper run by the banks.
|By: David Dayen Tuesday January 31, 2012 6:15 am|
Among other things, Masto questions whether there will be “geographic discrimination” involved in the settlement, wondering whether enforceable controls will be employed to prevent some states from making out better than others. Clearly this is a reference to the attempted California bribe of up to $15 billion out of the $25 billion total. Masto asks for an expected range of value from the settlement for each state, not just California. She wants to know if the states or the federal government would be in control if something goes wrong with the settlement.