Mortgage Settlement Is Garbage
Last year, when the 49-state AG mortgage agreement with the banks was signed, corporate media praised it, Obama almost broke out his happy feet and mortgage activists celebrated with tears of joy as if it was their favorite contestant won American Idol.
But buried deep below all the hoopla from the celebrations from the mortgage settlement was something not discussed and that was the warnings from people like me who said it was all smoke and mirrors. We warned that foreclosures were now going to be rammed through the courts at record speed now that the mortgage servicers knew what the ground rules were and what they could or could not get away with.
Last week, freelance financial journalist and blogger, David Dayen wrote a fantastic piece in Salon saying essentially what I was telling people last year when members of the state legislatures across the country were figuring out ways to spend the money that the banks promised and Florida activists were popping corks from cheap champagne they bought at Winn-Dixie while singing “Happy Days Are Here Again.”
Under the settlement, banks paid a miniscual amount to the states as well as foreclosure victims but the promise of improved servicing standards and principal reductions for struggling homeowners has been elusive.
As Dayen points out,
“Most of the focus has been on the principal reductions, and whether the banks are actually accomplishing them for the benefit of homeowners. But it’s these servicing standards that are being violated. That’s the inescapable conclusion of new evidence disclosed by the Center for Investigative Reporting and NBC Bay Area. Focusing on mortgage documents and foreclosures in the San Francisco region, they found that “banks and their subsidiaries continue to file invalid documents and foreclose on properties to which they appear to have no legal right.”
In one case, mechanical engineer Joji Thomas, in a last-ditch bid to save his home, delivered a cashier’s check for $27,777.85 to Bank of America, which promptly lost the payment, and foreclosed anyway. In another case, BofA transferred a property to a separate entity that wasalready closed down, and they clumsily switched the dates on the document to make it look correct. Reporters also uncovered documents prepared by “robo-signers,” individuals hired to attest to the veracity of thousands of mortgage documents without having any underlying knowledge of the contents (basically a mass perjury scheme).”
These are the types of abuses that state and federal authorities claimed the settlement would eliminate but now 14 months later, bloggers like Dayen and others are screaming, “We’ve been duped!
I guess they should have listened to me and Yves Smith from Naked Capitalism 14 months ago because when her and I warned everyone that it was made up of smoke and mirrors and we were ignored.