The link for credit purposes [which might not be a bad link to add to your sources]:
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> http://www.nakedcapitalism.com/2012/02/the-top-twelve-reasons-why-you-should-hate-the-mortgage-settlement.html
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In a report carrier by another one of the major media outlets, it was suggested upwards of 85% of the nmortgage fraud in Harris' old stomping grounds were frauds committed by the lenders or their agents [http://www.nytimes.com/2012/02/16/business/california-audit-finds-broad-irregularities-in-foreclosures.html?_r=1]. Any deal which cuts off prosecution, like this in part does, seems to benefit people doing business in Harris' old stomping grounds?--hmmm---hope that was not an intended benefit. In sum, some of the other problems with the mortgage "settlement" deal include:
1. The Wall Street Journal is also reporting that the SEC is about to launch some securities litigation against major banks, but since the statute of limitations has already run out on securities filings [kinda like what Mike Ramos did for his buddies in San Bernardino County], this means the SEC may tag the banks for some of the very last deals before the subprime market tanked [the formula? Know your buds are breaking the law, but delay prosecution so most if not all of what they did can't be touched??]
2. With the mortgage settlement terms not yet released [funny how people claim credit in the media for something they can't be challenged on], but some details have been leaked:
a. For the top 5 servicers, $26 billion is claimed, but of that, roughly $17 billion is credits for principal modifications, which will come from mortgages owned by investors [not the mom and pop owners]. $3 billion is for refinances, and only $5 billion will be in the form of hard cash payments, the $1500 to $2000 per borrower foreclosed on between September 2008 and December 2011--like big deal, the crooks get away and the people that lost their home get some of their moving costs reimbursed--this is justice??--people who lost their homes from mortgage fraud from September 2008 to December 2011 are screwed twice!!
b. Banks will be required to modify second liens that sit behind firsts. So the banks will focus on borrowers where they do not have second lien exposure, and this also makes the settlement less helpful to struggling homeowners, since borrowers with both second and first liens default at much higher rates than those without second mortgages--so its a paper deal with no real teeth!!
Also per the Journal:
5. “It’s not new money. It’s all soft dollars to the banks,” said Paul Miller, a bank analyst at FBR Capital Markets [opps, another bailout funded by the money the banks won't have to pay back on the earlier bailout funds owed back to the government??].
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> The Times is also subdued:
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> Despite the deal's billions in earmarks, the aid will help a small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out because earlier efforts by Washington aimed at troubled borrowers helped few.
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6. Schneiderman’s MERS suit survives, and he can add more banks as defendants. It isn’t clear what became of the Biden and Coakley MERS suits, but Biden sounded pretty adamant in past media presentations on preserving that. Why don't we have a MERS suit in California Ms. Harris?
7. Nevada’s and Arizona’s suits against Countrywide for violating its past consent decree on mortgage servicing has, in a new Orwellianism, been “folded into” the settlement effectively bailing out a bank for breaching the earlier agreement--so what will change to make Countrywide and its succecssor any more likely to follow the rules?
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8. The five big players in the settlement have already set aside reserves sufficient for this deal, so they made the deal based on WHAT they were going to set aside--noting like handicapping the settlement negotiations!!
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9. Here are the top twelve reasons why this deal according to the "Naked Capitalism" website stinks:
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> 1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law--wow, if one of us forged and fabricated loan docs, we would face multiple felonies and jail time--what the @#%* !!.
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> 2. That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401 (k)s. Refis of performing loans also reduce income to those very same investors--here we go again, allegedly adverting demise or hardship by funding with our own money??
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> 3. That $5 billion divided among the big banks wouldn’t even represent a significant quarterly hit. Freddie and Fannie putbacks to the major banks have been running at that level each quarter--message we send?? Its ok to break the law, to commit felonies, because we will only cause a small blip in your financials when fashioning a punitive remedy!
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> 4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public--ah @#%&, another bailout by use of creative accounting?
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> 5. The proposed enforcement is a joke. The first layer of supervision is the banks reporting on themselves--little more than regulatory theater--giving the keys to the henhouse to the hungry fox?
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> 6. The history on servicer consent decrees shows the servicers fail to comply. Why? Servicer records and systems are poor in the best of times and they don't adjust to handle additional volumes and challenges created by that higher volume of delinquencies. --so we are doing what different?
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> 7. The cave-in Nevada and Arizona on the Countrywide settlement suit is a special gift for Bank of America, who is by far the worst offender in the chain of title disaster (since,according to sworn testimony of its own employee in Kemp v. Countrywide, Countrywide failed to comply with trust delivery requirements). This move proves that failing to comply with a consent degree has no consequences but will merely be rolled into a new consent degree which will also fail to be enforced. These cases also alleged HAMP violations as consumer fraud violations and could have gotten costly and emboldened other states to file similar suits not just against Countrywide but other servicers, so it was useful to the other banks as well--B of A is based let's see, ah, where Kamala Harris and Nancy Pelosi hail from??
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> 8. If the new Federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating. It’s a bad idea to settle obvious, widespread wrongdoing on the cheap. You use the stuff that is easy to prove to gather information and secure cooperation on the stuff that is harder to prove. In Missouri and Nevada, the robosigning investigation led to criminal charges against agents of the servicers. But even though these companies were acting at the express direction and approval of the services, no individuals or entities higher up the food chain will face any sort of meaningful charges--its been theatre at our expense!!
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> 9. There is plenty of evidence of widespread abuses that appear not to be on the attorney generals’ or media’s radar, such as servicer driven foreclosures and looting of investors’ funds via impermissible and inflated charges. While no serious probe was undertaken, even the limited or peripheral investigations show massive failures (60% of documents had errors in AGs/Fed’s pathetically small sample). Similarly, the US Trustee’s office found widespread evidence of significant servicer errors in bankruptcy-related filings, such as inflated and bogus fees, and even substantial, completely made up charges. Yet the services and banks will suffer no real consequences for these abuses.
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> 10. A deal on robosiginging serves to cover up the much deeper chain of title problem. And don’t get too excited about the New York, Massachusetts, and Delaware MERS suits. They put pressure on banks to clean up this monstrous mess only if the AGs go through to trial and get tough penalties. The banks will want to settle their way out of that too. And even if these cases do go to trial and produce significant victories for the AGs, they still do not address the problem of failures to transfer notes correctly.
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> 11. Don’t bet on a deus ex machina in terms of the new Federal foreclosure task force to improve this picture much. If you think Schneiderman, as a co-chairman who already has a full time day job in New York, is going to outfox a bunch of DC insiders who are part of the problem, I have a bridge I’d like to sell to you.
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> 12. We’ll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer. Investors in mortgage-backed securities, who know that services have been screwing them for years, will be hung out to dry and will likely never return to a private MBS market, since the problems won’t ever be fixed. This settlement has not only revealed the residential mortgage market to be too big to fail, but puts it on long term, perhaps permanent, government life support.
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Blogger Bob's Comment: Bad policy--the security should be re-appraised and financed at their current value and refinanced at current market interest for people still in their homes. People displaced from their homes, IF they have a legit argument and evidence to support that they were wrongfully foreclosed on, should be paid by the banks and or servicing companies for the cost of acquiring a similar home, their credit report purged of adverse references based on that foreclosure and allowed to collect all other reasonable damages resulting from the wrongful foreclosure. Use of fraudulent, forged and or fabricated documents by ANY financial institution, should not be rewarded by walk-away and laugher deals, but the managers of the offices under whose supervision the documents went out, should be prosecuted for the felonies their conduct represents.
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