The Administration wants Fannie and Freddie to work with bank mortgage servicers to refinance Fannie/Freddie held mortgages at lower interest rates. That requires the servicers to cooperate, but one of the largest, Wells Fargo, just announced it wouldn’t work with mortgage serviced by others, a stand that could limit the effectiveness of the new HARP Refi programs.

I’ve met Katie Porter one time. She writes at Credit Slips and, back in 2007, did one of the first clinical studies of mortgage servicer misbehavior and abuse, in that case with respect to bankruptcy. She is one of the pre-eminent legal scholars in this field, and she knows every single trick that the servicers have done over the past decade. There are few other people as equipped to handle the job of the monitor than her, in my estimation. And I hope that she uses this pathway, with the evidence she will compile, to make a broader effort to blow the whistle on a broken and corrupt mortgage servicing industry. And that’s likely.

One of the things I looked at in an earlier installment of the foreclosure fraud settlement documents is how banks can satisfy their obligations by modifying mortgages they don’t own. HUD again tried to push back on this with a blog post about “myths v. facts” in the mortgage settlement. But it seems they’ve confused the issue, and investors who could be hurt by paying for the banks settlement credits don’t agree either.

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.

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

The foreclosure fraud settlement has been filed in federal court in Washington. The Justice Department has provided the relevant documents, over a month after the settlement was announced. So now we can finally begin to assess the settlement and what it will mean for housing policy. At first glance, the list of offenses for which the banks are granted release from further liability is so long, you have to wonder why these banks are allowed to stay in business. More to come.

The National Association of Consumer Advocates, the National Association of Consumer Bankruptcy Attorneys and the National Consumer Law Center have released the results of a survey showing that “mortgage servicers continue to initiate foreclosure proceedings improperly, either while a homeowner is awaiting a loan modification or due to improper fees or payment processing.” And it’s occurring even after the services signed an earlier settlement to end the practices.

The New York Times today looks at single point of contact, a standard for servicing which has been mandated on at least a couple of occasions, without success. Requiring a single point of access has been required in settlements before, but consumer advocates say little has changed, leaving us to wonder whether any of the new settlement terms will be enforced.

I think I’ve made my position on the foreclosure fraud settlement pretty clear. Nevertheless, there’s a time to stew and a time to figure out how to make this work as well as possible. I think there are some tangible steps that can be taken, if not to improve the deal, then to improve housing policy overall to the benefit of homeowners rather than bank balance sheets.

If you thought the foreclosure fraud settlement was bad, get this: the Office of the Comptroller of the Currency, the weakest federal regulator in the financial sphere (I’ve taken to calling them the Office of Bank Advocacy), decided to use the cover of the big settlement to announce their fines in their consent order with big bank servicers.