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Banks near $10 billion foreclosure settlement
The nation's major banks are reportedly close to a settlement with federal regulators over abusive foreclosure practices, going back to 2009.
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The nation's major banks are reportedly close to a settlement with federal regulators over abusive foreclosure practices, going back to 2009. The deal is said to be a $10 billion settlement with 14 banks.
Economist Chris Low at FTN Financial says settlements with regulators are usually "in the millions, not the billions. It's a big number."
But that $10 billion will allow banks to avoid further investigation of "robo-signing." That's the practice of processing foreclosures or loan modifications in batches, instead of reviewing each one.
Low says in 2011, the government ordered banks to hire independent consultants, to comb through each suspected case of robo-signing.
"Determining not just whether it took place, but how widespread it was," says Low.
Banks have already spent more than a billion dollars on those reviews, and they are nowhere near done. A settlement this week would not only put an end to the arduous, expensive review process, it would also let banks sweep the mess under the rug in time to report it on their fourth-quarter earnings. That would please shareholders -- they're eager to see some of the uncertainty over abusive foreclosures cleared up.
This is something to be very concerned about...when you are too big to fail, you can essentially pay your way out of the problems you create?? By law, they were supposed to process these foreclosures properly. They didn't. Why isn't the Government making them?
I can understand that further investigation may not turn up much useful information and that the majority of cases likely resulted in otherwise proper foreclosures. But there should be data to support this. The work that the Banks did should be submitted for analysis and review. Otherwise it begs the question of a potential larger problem lurking that is being sealed away in Bank vaults.
And in the end, if it is still possible that one homeowner lost their home due to the negligence of these banks, there should be strong incentive to work toward in making it right. Give people that were unfairly affected by this settlement the ability to be found and heard.
So we'll never know exactly how badly the banks screwed us? Gee, that's a useful resolution.
Earth to regulators: You're SUPPOSED to make them cough up the data so we know exactly what happened and how to prevent it from happening again. It's SUPPOSED to hurt them to withhold information. Letting them sweep the whole mess under the rug for a token fee (yes, I consider 10B a "token" fee when you compare it with the wholesale destruction these banks have wreaked on the American and global economy) is a shameful act. Oh, and by the way, you do know that you're expected to enact regulations that prevent the banks from doing this again, right?
