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With more rumblings of a foreclosure fraud settlement in the air (you’ll notice that the New York Post’s not-believable figure of a $60 billion settlement has been revised down to $25 billion, and that none of the AGs who have repudiated the deal are quoted here), the more significant actions are happening, paradoxically, at the federal regulatory level. Take note of these developments, from today:
• Federal regulators at the FDIC are scrutinizing class-action mortgage lawsuits, perhaps to actually get data on mortgage servicer abuse. Bank of America just lost a bid to throw out one of these lawsuits, an important one alleging that homeowners did not get HAMP modifications when they were qualified borrowers. An FDIC official indicated that 90,000 homeowners are contesting their foreclosures in court, which is probably a low number.
• The FDIC sued Michael Perry, the former CEO of IndyMac, for $600 million, related to the sale of toxic mortgages.
• JPMorgan chase settled a $228 million suit over market-rigging for municipal bond derivatives, a separate issue but one that shows actual pressure on the banks.
So, I don’t think the Obama Administration got balls overnight, and is aggressively pursuing lawsuits against the lords of finance. A couple agencies may be doing some work, but it’s middling. And for the most part, regulators like OCC, which will release the results of their foreclosure review without naming the banks involved, still rule the roost. I do, however, think there’s a recognition inside the Administration that the housing market is a lead weight on the economy, and that they need to think harder about ways to fix the foreclosure crisis. Part of that are these new initiatives to give distressed borrowers a fighting chance through forbearance or no-interest loans. But another part is extracting the best settlement they think they can get by putting external pressure on the banks on these issues.
It’s still a meaningless settlement without an actual examination of the facts and the depth of the problem, however. Remember that as it gets announced, which could be in the next few weeks.
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The settlement will not happen without New York and California, too many people, too much money to leave hanging. Neither state’s AG is inclined to compromise, even as more evidence arrives daily showing more malfeasance by the financial “industry”, they’d be signing their political death warrant.
There are so many angles to work on this mess, and some victories for the homeowners in states where the law still works (unlike FL), that a true “settlement” would require a bank amnesty. Let the GOP push it, it is another political death warrant for anyone that votes for it. They already get heat over the stuff they’ve tried on Social Security and corporate welfare.
Timmeh G. must be pooping his pants about the potential ramifications for his corporate owners. Hahahahahahaha.
Makes me wonder if the FDIC is pursuing these actions, not with the approval and support of the White House, but in spite of them. Since Obama never cleaned house of Buscho’s mid-level political appointees in the regulatory agencies, this also makes me wonder if Shrub fully staffed FDIC with his Liberty U hacks like he did elsewhere. I’m sure of one thing, Timmy Geithner can’t be pleased by this.
Wake me when someone/corp. citizen goes to Jail. Is a fine tax deductable? Anyone
Thanks in advance
Fines are not tax deductible, just like speeding tickets aren’t.
“Pecora who? Never heard of him. Move along…”