The Attorney Generals of 49 states and the US Justice Department have reached a settlement with the five biggest mortgage servicers - Wells Fargo. JP Morgan Chase, Ally Financial, Bank of America, and Citigroup – regarding their fraudulent foreclosure practices. You were asking me, what does this settlement mean for me. Probably NOTHING! That’s right, NOTHING or at the most – next to nothing!
It’s a great deal – FOR THE BANKS!! It’s a ROTTEN deal for the PEOPLE!! Here are five reasons why:
1. The banks are now OFF THE HOOK as far as being prosecuted by either the states or federal governments for CRIMINAL document FORGERY and FRAUD! There will be no punishment for these politically connected banksters who knowingly committed these frauds.
2. Of the $26 Billion in “fines”, $17 Billion has been designated to be used towards principal reductions. The average principal reduction will only be $20,000 and will only be for people who are current in their payments. If you now owe $300,000 and it is worth $150,000 in today’s market – you will then ONLY owe $280,000 on a house worth $150,000. WOW, not that helps doesn’t it?
3. The banks have up to THREE YEARS to implement the terms of the settlement. Based upon how they’ve worked with distressed homeowners to get a modification, I don’t see them moving quickly on something they have three years to implement. You might NOT want to plan on getting any help from this settlement any time soon
4. A small part of the settlement ($1.5 Billion) is to go to those unfortunate homeowners whose properties were stolen using the fraudulent, robo-signed documents. They will get only $2000 each!! Not their home back, but $2000 period.
5. Foreclosures will most likely increase !!! Now that the banks know how small the penalties are for their criminal acts, they will move forward with full speed to continue their outright theft of property through foreclosure.
If you are in foreclosure or facing the prospect of a foreclosure, you will NOT GET HELP from the government.
The only way to protect your rights is to have a knowledgeable and capable attorney fighting for you. That’s where we come in!
You can SAVE and KEEP YOUR HOME through FORECLOSURE DEFENSES NETWORK!
www.ForeclosureDefensesNetwork.com
One-On-One FREE consultations, FREE educational workshops with the next upcoming workshops on March 1st and 3rd.
Call anytime and we will connect you to one of our trained consumer advocates, speak to a live person
..saving the American Dream one home at time 847-356-1564 Info@FDANTeam.com
Monday, February 20, 2012
Monday, February 13, 2012
The Deal Is Done, but Hold the Applause
By GRETCHEN MORGENSON
Published: February 11, 2012
FIVE big banks finally reached a deal with government authorities last week over dubious mortgage practices and foreclosure abuses.
After months of talks, Ally Financial, Bank of America, Citibank, JPMorgan Chase and Wells Fargo agreed to pay a total of $5 billion in cash to try to remedy this fiasco. They will also help homeowners who are underwater on their mortgages by reducing the principal on their loans by a combined $17 billion over the next three years.
Borrowers who qualify will get $3 billion in refinancing arrangements. Those who were improperly foreclosed on will get a combined $1.5 billion. That probably nets out to less than $2,000 a person.
The banks crowed that this settlement would help the economy and the reputation of the mortgage industry. Michael J. Heid, president of Wells Fargo Home Mortgage, characterized the deal as “a very important step toward restoring confidence in mortgage servicing and stability in the housing market.”
But it’s hard to imagine that this one settlement will be enough to restore trust in loan servicers. Given what we know about their questionable practices — how they larded improper fees on struggling homeowners, for example, and forced people to buy home insurance at three times market rates — restoring confidence in these firms will take some doing.
There’s no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file.
As for the supposed benefits to the economy, skeptics abound. One of them is Paul Diggle, property economist at Capital Economics in London. In a report last week, he rejected the notion — espoused by both banks and government authorities — that this deal would help turn around the American housing market.
For most homeowners, it will barely move the needle. Forgiving $17 billion in principal “is a drop in the ocean,” Mr. Diggle said, “given that close to 11 million borrowers are underwater on their loans to the tune of $700 billion in total.” Doing the math, $17 billion in write-downs would be about 2.4 percent of the total negative equity weighing down borrowers across the nation now.
Yves Smith, the perspicacious founder of the Naked Capitalism Web site, was especially critical. In a post, “The Top 12 Reasons Why You Should Hate the Mortgage Settlement,” she wrote that this deal was a stealth bailout of the major banks.
Why? It will improve the value of the second liens or home equity lines of credit they own. These vast holdings — roughly $400 billion — are worthless if the first mortgages preceding them are underwater. But if the banks don’t write down the second liens alongside the first mortgages, the seconds become more valuable. A lower principal balance on the first mortgage makes the second more likely to pay.
But perhaps the largest question looming over this settlement is how it will be policed. Recent history is littered with agreements that required banks to take specific steps to make amends. All too often, the banks have skated away from their promises.
A prime example is a settlement over predatory lending that was reached by Countrywide Financial in 2008. Led by attorneys general in California and Illinois, that deal had Countrywide vowing to provide $8.4 billion in loan relief to borrowers in the form of lower interest rates and loan modifications.
It sounded good on paper. But Bank of America, Countrywide’s parent, defied many aspects of the settlement, according to Catherine Cortez Masto, Nevada’s attorney general. She sued Bank of America last summer, contending that it had raised interest rates on loan modifications even though Countrywide had promised to lower them.
Bank of America also declined to provide loan modifications to qualified homeowners as required in the deal and improperly proceeded with foreclosures while borrowers’ modification requests were pending, Ms. Masto’s suit said. Furthermore, the bank failed to meet the settlement’s 60-day requirement on granting new loan terms, allowing months — and in some cases, more than a year — to go by with no resolution, the lawsuit said.
Bank of America has disputed the allegations.
Other borrower programs also seemed promising until bank resistance stymied them. Consider the Foreclosure Mediation Program in Nevada, set up in 2009 to help resolve the mountain of delinquent and troubled loans in that state.
Under the program, banks must mediate with borrowers who request such help. But two years of statistics, through last September, show 5,771 cases where mediators found that banks had failed to participate in good faith or were not complying with other aspects of the mediation law. That is equivalent to 42 percent of all the mediations completed in the program.
Perhaps more troubling, the percentage of mediations where lenders have failed to comply has risen in the most recent six months of data.
“It’s astounding that in such a huge percentage of cases the lenders are not complying,” said Philip A. Olsen, a former Nevada Supreme Court settlement conference judge. “The banks have learned that they can thumb their noses at the program and it won’t cost them anything.”
So you have to wonder whether banks will thumb their noses at last week’s settlement, too. That makes policing compliance crucial.
That task falls to Joseph A. Smith Jr., the banking commissioner for North Carolina since 2002. Not only must he oversee the monetary relief programs in the settlement, he must also enforce extensive changes to loan-servicing practices that the deal entails.
I had hoped to ask Mr. Smith how he planned to monitor the expansive and arcane terms of the settlement and what size of army he would be deploying to ensure that the banks fulfilled their promises. But he was not available on Friday to answer my questions.
An administration official, speaking on condition of anonymity because he was not authorized to discuss the deal, said that Mr. Smith would hire accountants and consulting firms to audit the banks’ performance and that as monitor, he would be able to interview bank employees. If the monitor finds that a bank has failed to meet its commitment, he can impose penalties of up to $5 million, depending on the errors’ seriousness or frequency.
Additional details will emerge. But this kind of minutiae will determine whether the settlement succeeds. So many borrower programs have failed since the foreclosure crisis began. Another nonstarter will only add to the mistrust that many people harbor toward those large institutions, both public and private, that contributed so mightily to this mess.
Published: February 11, 2012
FIVE big banks finally reached a deal with government authorities last week over dubious mortgage practices and foreclosure abuses.
After months of talks, Ally Financial, Bank of America, Citibank, JPMorgan Chase and Wells Fargo agreed to pay a total of $5 billion in cash to try to remedy this fiasco. They will also help homeowners who are underwater on their mortgages by reducing the principal on their loans by a combined $17 billion over the next three years.
Borrowers who qualify will get $3 billion in refinancing arrangements. Those who were improperly foreclosed on will get a combined $1.5 billion. That probably nets out to less than $2,000 a person.
The banks crowed that this settlement would help the economy and the reputation of the mortgage industry. Michael J. Heid, president of Wells Fargo Home Mortgage, characterized the deal as “a very important step toward restoring confidence in mortgage servicing and stability in the housing market.”
But it’s hard to imagine that this one settlement will be enough to restore trust in loan servicers. Given what we know about their questionable practices — how they larded improper fees on struggling homeowners, for example, and forced people to buy home insurance at three times market rates — restoring confidence in these firms will take some doing.
There’s no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file.
As for the supposed benefits to the economy, skeptics abound. One of them is Paul Diggle, property economist at Capital Economics in London. In a report last week, he rejected the notion — espoused by both banks and government authorities — that this deal would help turn around the American housing market.
For most homeowners, it will barely move the needle. Forgiving $17 billion in principal “is a drop in the ocean,” Mr. Diggle said, “given that close to 11 million borrowers are underwater on their loans to the tune of $700 billion in total.” Doing the math, $17 billion in write-downs would be about 2.4 percent of the total negative equity weighing down borrowers across the nation now.
Yves Smith, the perspicacious founder of the Naked Capitalism Web site, was especially critical. In a post, “The Top 12 Reasons Why You Should Hate the Mortgage Settlement,” she wrote that this deal was a stealth bailout of the major banks.
Why? It will improve the value of the second liens or home equity lines of credit they own. These vast holdings — roughly $400 billion — are worthless if the first mortgages preceding them are underwater. But if the banks don’t write down the second liens alongside the first mortgages, the seconds become more valuable. A lower principal balance on the first mortgage makes the second more likely to pay.
But perhaps the largest question looming over this settlement is how it will be policed. Recent history is littered with agreements that required banks to take specific steps to make amends. All too often, the banks have skated away from their promises.
A prime example is a settlement over predatory lending that was reached by Countrywide Financial in 2008. Led by attorneys general in California and Illinois, that deal had Countrywide vowing to provide $8.4 billion in loan relief to borrowers in the form of lower interest rates and loan modifications.
It sounded good on paper. But Bank of America, Countrywide’s parent, defied many aspects of the settlement, according to Catherine Cortez Masto, Nevada’s attorney general. She sued Bank of America last summer, contending that it had raised interest rates on loan modifications even though Countrywide had promised to lower them.
Bank of America also declined to provide loan modifications to qualified homeowners as required in the deal and improperly proceeded with foreclosures while borrowers’ modification requests were pending, Ms. Masto’s suit said. Furthermore, the bank failed to meet the settlement’s 60-day requirement on granting new loan terms, allowing months — and in some cases, more than a year — to go by with no resolution, the lawsuit said.
Bank of America has disputed the allegations.
Other borrower programs also seemed promising until bank resistance stymied them. Consider the Foreclosure Mediation Program in Nevada, set up in 2009 to help resolve the mountain of delinquent and troubled loans in that state.
Under the program, banks must mediate with borrowers who request such help. But two years of statistics, through last September, show 5,771 cases where mediators found that banks had failed to participate in good faith or were not complying with other aspects of the mediation law. That is equivalent to 42 percent of all the mediations completed in the program.
Perhaps more troubling, the percentage of mediations where lenders have failed to comply has risen in the most recent six months of data.
“It’s astounding that in such a huge percentage of cases the lenders are not complying,” said Philip A. Olsen, a former Nevada Supreme Court settlement conference judge. “The banks have learned that they can thumb their noses at the program and it won’t cost them anything.”
So you have to wonder whether banks will thumb their noses at last week’s settlement, too. That makes policing compliance crucial.
That task falls to Joseph A. Smith Jr., the banking commissioner for North Carolina since 2002. Not only must he oversee the monetary relief programs in the settlement, he must also enforce extensive changes to loan-servicing practices that the deal entails.
I had hoped to ask Mr. Smith how he planned to monitor the expansive and arcane terms of the settlement and what size of army he would be deploying to ensure that the banks fulfilled their promises. But he was not available on Friday to answer my questions.
An administration official, speaking on condition of anonymity because he was not authorized to discuss the deal, said that Mr. Smith would hire accountants and consulting firms to audit the banks’ performance and that as monitor, he would be able to interview bank employees. If the monitor finds that a bank has failed to meet its commitment, he can impose penalties of up to $5 million, depending on the errors’ seriousness or frequency.
Additional details will emerge. But this kind of minutiae will determine whether the settlement succeeds. So many borrower programs have failed since the foreclosure crisis began. Another nonstarter will only add to the mistrust that many people harbor toward those large institutions, both public and private, that contributed so mightily to this mess.
Thursday, February 2, 2012
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