Before the foreclosure fraud settlement was inked, at least half a dozen Republican Attorneys General said publicly that they were philosophically opposed to principal reductions of any kind. Then, in December of last year, the committee that helps elect Republican AGs received hundreds of thousands of dollars from Citi, Wells Fargo and JPMorgan Chase. All of a sudden, every Republican AG but Oklahoma signed on to the deal.
This tells you how “philosophical opposition” can be overcome, and also how scared the banks are of the settlement. And it may tell you how everyone expects the settlement to be implemented, i.e. just like every other settlement with the banks – poorly. 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.
While the entire process of seeking a mortgage modification is complicated and time-consuming, few elements are as maddening as the inability to get through to a representative at the bank, or being asked for the same documents again and again.
So the promise of a single point of contact has emerged as a crucial element in the much-ballyhooed $26 billion settlement reached earlier this month involving state attorneys general, the federal government and the five biggest mortgage servicers. These rules will apply nationwide and come with commitments of strong enforcement by federal and state authorities, but they carry a familiar ring for those experienced in the foreclosure process.
Last April, the industry made many of the same pledges under a consent order with the Office of the Comptroller of the Currency and since then, consumer representatives say, there has been barely any improvement, adding that loan files continue to be handed off from one agent to another, sometimes weekly, and that even when a single person is assigned to their cases, one phone call after another goes unreturned.
“It doesn’t seem like much has changed,” said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project, or Nedap, a resource and advocacy center that works with community groups in New York. “We’re still seeing the same systematic problems.”
I agree with Yves Smith that single point of contact is not really the issue. If you had accurate record-keeping at the servicers, than any call center employee could access the proper data and help customers. We know this because that’s how it works with practically every other customer service call center in the world, and while nobody particularly likes calling customer service, in general terms your phone or cable company rep can figure out your situation in a short period of time by accessing your records (and they don’t have single point of contact). Only in the servicer business do we see these persistent problems, and at some point you have to attribute it to the servicing model itself. Either the profit margins are so low for the servicing business that they cannot adequately staff without losing money, or they simply don’t believe that they will be meaningfully sanctioned for these endemic problems.
Either way, this shows that servicers will not keep up their end of the bargain. They didn’t for the OCC consent order, and they won’t for the servicing settlement. And if the servicing standards won’t take, what does this mean for the principal reductions or refinancing? What does it mean for the money going to the states, which increasingly is getting used for things like higher education or Medicaid gaps or knocking down vacant homes? We haven’t seen terms of the settlement yet, but based on prior knowledge, we can say with some degree of confidence that the terms of the settlement, in many cases, will be no more than just suggestions.




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A “settlement” whose “terms” are designed to have no teeth is deliberately intended to gum up and make mock of both enforcement(Hah!) and legal consequence(Chortle …).
Mission completed, political class (which includes the “media”)!!!
As Henry Giroux made very clear, neoliberalism is “proto-fascism” and it is designed to destroy democracy and the Rule of Law.
That is why the political class embraces it, that is what their master desire and demand.
This brutal depoliticization, such as we may see in Greece, today, is the intentional destruction of the consent of the governed.
Thus this “settlement” is quite as much about “politics” as it is about the “economy”.
Thank you, DDay.
A Pulitzer for DDay!!!
The Rule of Law for everyone.
(I know, I repeat myself …)
DW
Slogan Contest for my next west coast tour:
http://freewayblogger.blogspot.com/2012/02/laslogan-contest.html
Winner gets a thousand dollars.
The settlement is simply a whitewash. There’s no intent on the part of any of the AG’s to enforce anything.
So even the terms will just be suggestions.
Boxturtle (If there was anything positive in the settlement, they’d be flogging it)
It’s not mission accomplished YET. The reaction to Holder’s post on Kos and HuffPo, the most reliable collections of Obamabots available, was so negative and so instant that even the normal apologists were scared off.
Obama is only safe because he has no primary challenger. Holder lives and dies with Obama.
Boxturtle (I am informed that the DoJ has received lots of letters on the subject)
“They” will prolly just ask Rahm to come up with some catchy, dismissive little phrase and move to the right … possibly by announcing some kind of “surprise”.
How might you see them “doubling down”, Box Turtle?
Is Obama Inc more afraid of the masters or the proto-serfs?
DW
Can anyone clarify for me whether any of the zombies (in this case, Chase) are doing refi’s for people with clean payment histories, high credit scores but who are underwater on the mortgage vs. the market value? (This would be where there was neither a Fannie nor a Freddie previously involved.) If so, are there any links that can be referenced?
Congress protected slave holders….. This is no different, just more sophisticated! Depriving people of property and opportunity, life and liberty! Just as Jefferson warned!
I don’t see them doubling down, I see them retreating to their castles and refusing to comment.
They lost both Kos and HuffPo. If Obama can’t sell those two sites on his plan, it ain’t gonna sell anywhere. The MSM has been giving the settlement unrelenting positive coverage since it was announced, but that didn’t take even with the folks who are inclined to give Obama the benefit of the doubt.
Boxturtle (ObamaLLP will serve Wall St until they get that $1B in hand)
Some local news:
http://www.utsandiego.com/news/2012/feb/20/customers-get-mixed-signals-banks-25b-mortgage-dea/
Q:What do you call 10,000 dead bankers at the bottom of the ocean? A:A good start. (The lawyer in me has waited three decades for that lol.)
Good heavens!!! Think of the pollution, pity the fishes, the whales and the porpoises. Now if ya can stick ‘em in a stand-pipe and get the thing cemented over … no, those things leak …
On second, deeper thought, what is the half-life of banker contagion, and what might happen to underlying strata?
Can’t even shoot ‘em into space, might give the whole neighborhood a really bad rep, and possibly annoy others in the vastness of universe.
Whatever are we to do with useless, worthless, and valueless bankers?
Then, of course, there is the political class, which includes the media, rc.
Onward and upward to the MOTU!!!
:~DW
Obama’s adherents at KOS and HuffPo will rush back to support him as soon as he smiles at them. They are loyal to a fault and will not abandon their hero.
With apologies to Herb Caen:
A man walks up to Bill Black and says, “Bill, a banker just died. Would you donate $10 toward his funeral?”
Bill replies, “Here’s $100. Bury 10 of ‘em.”
In 1987, when I was just a few years out of law school, my lady, also a lawyer, and I went to a RE agent to shop for a house. We sat at his desk and found ourselves staring at a sign on his desk that faced out and said, “First thing we do, let’s kill all the lawyers.” I bought my house elsewhere. Finally, it’s the bankers’ turn lol.
LOLOLOL
Yes, Holder and Donovan may work for St. Barry the Helpless, but that doesn’t make them St. Barry. It’s just more of what He has to put up with; Republicans and Blue Dogs and bankers and incompetence at HUD and DoJ. It’s not like it’s His fault…after all, He can’t do anything by Himself, don’t you know? But, rest assured, He cares and will do everything He can, which is all anyone can ask of Him. Amen.
Yes, St. Barry the Helpless will give an interview where He talks about the hard work ahead and the need to fight harder so His second term will build on the important work He has done so far, and the Kossacks and Huffp-Obots will piddle their pants at the chance to lick His boots some more. Praise St. Barry and pass the Osterity! Amen.
Criticizing Obama? You must be one of those racist fellers. /s Spot on rendition, VS. (Oh, damn, did I say “rendition”?)
“this” shows that servicers will not keep up their end of the bargain”
Ok – prior problems mean future problems because they agreed to fix in the past and did not. Well I think you are correct – unless strong enforcement nothing will happen.
But why do we assume no strong enforcement? Don’t the AG’s monitor their settlements – won’t New York chase any banks that do not step up as required? Doesn’t this qualify as speculation until we see failure to comply?
I have no trust in the banks or their servicing subsidiaries – but do I lack Yves (Susan)’s “passion” if I ask to see the details of the new crime before I say there has been one?
Bad news, realitychecker,
If you weren’t before, you are now on “the list.”
Oh, goodie. I always wanted to get into a night club lol.