LIKE HAMP MODIFICATIONS, AG DEAL IS WINDOW DRESSING

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“The banks’ strategy is to run the clock,” a Georgetown University law professor, Adam Levitin, said. “The chances of a settlement that meaningfully reforms mortgage servicing and makes the banks pay an appropriate price for illegal conduct are rapidly slipping away.”

EDITOR’S ANALYSIS: It’s really simple. Wall Street banks got away with financial equivalent of murder and the administration either doesn’t get it or doesn’t want to get it. The deal with AG offices around the country is going to split apart into meaningless drivel just like the HAMP or any other modification process. The banks want the houses, pure and simple. It is the only way they make money for the 4th time in this merry-go-round of financial farce. They know how to pretend to offer modifications, lose the paperwork and otherwise stall, delay and obfuscate and now they are doing the same thing with the AG offices.

SO HERE IS THE QUESTION: WHICH ATTORNEY GENERAL WILL HAVE THE COURAGE AND BACKING TO ACTUALLY TAKE ON WALL STREET? Because the only way out of this is by litigating or negotiating with the actual people who are owed money from these mortgages. Right now they are not at the table nor anywhere to be seen, and frankly unknown in many instances. Present circumstances indicate the that the U.S. Government is the largest owner of mortgages, or the party with a claim to the largest number of mortgages (which probably is a false claim based upon bogus mortgage bonds). The award for honesty and effectiveness will go to the Attorney General who publicly says “we are talking to the wrong people — these servicers didn’t make the loans, didn’t purchase the receivables, and don’t have any authority to make a deal.”

In Foreclosure Settlement Talks With Banks, Predictions of a Long Process

By DAVID STREITFELD

Little was settled in the first round of foreclosure settlement talks.

The nation’s top mortgage servicers met Wednesday in Washington with the attorneys general from five states as well as Obama administration officials, beginning negotiations in earnest over new rules for homeowners who are in default.

The one thing everyone seemed to agree on was that an agreement was going to take time.

“We have a long way to go,” Iowa Attorney General Tom Miller, who is leading the effort from the states’ side, said after the afternoon session broke up.

“Obviously this is a very large set of issues, and it’s going to take some time to work through,” Thomas J. Perrelli, associate United States attorney general, said.

The quest to secure new foreclosure rules, which began last fall after the banks were shown to be breaking the rules as they pursued evictions, may be slow but it is playing out in public. When the effort was started, every attorney general signed on, but the coalition has begun to fracture.

Several Republican attorney generals are accusing their colleagues of overreaching in their attempt to bring the banks under control, while at least one Democrat, Eric T. Schneiderman, the New York attorney general, has expressed concern that any deal would immunize the banks from future legal action.

After Wednesday’s meeting, Mr. Schneiderman said through a spokesman that he remained worried about “providing broad amnesty to servicers.”

The banks at the meeting were Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and GMAC. A spokeswoman for GMAC, which is partly owned by taxpayers as a result of failing during the recession, called the session “productive and useful” but added it was “an extremely complex topic.” The other banks declined to comment.

Lengthy negotiations work to the banks’ advantage, critics say.

“The banks’ strategy is to run the clock,” a Georgetown University law professor, Adam Levitin, said. “The chances of a settlement that meaningfully reforms mortgage servicing and makes the banks pay an appropriate price for illegal conduct are rapidly slipping away.”

The government negotiators may receive some support from the imminent release of a report by banking regulators. The report, based on investigations conducted over the winter, is expected to establish what many households in default knew long ago: that banks cared little for the legal niceties governing foreclosure, exacerbating the troubles of millions at a particularly vulnerable point of their lives.

In addition, the report is expected to show that bank employees were poorly trained, that they let law firms and other third party contractors run wild, and that they had little interest in keeping people in their houses.

Lenders say they have fixed these problems, and that few if any homeowners were evicted who did not deserve it. But as recently as a few weeks ago, a major bank, HSBC, which is based in London, was forced to suspend foreclosures when regulators found a number of deficiencies.

Enforcement action is expected to follow the release of the report by the Federal Reserve, the Office of the Comptroller of the Currency and other banking regulators. Those fines and penalties would be separate from any monetary settlement that results from talks with the state attorneys general.

The banking regulators were not present at Wednesday’s all-day meeting.

About two million households are in foreclosure, and another two million are in severe default. Data released this week by an analytics firm, LPS Applied Analytics, showed that banks were making some progress with modifications but that foreclosure was becoming, for better or worse, a permanent state for many families.

The government proposals require homeowners in foreclosure to be treated on an individual basis and would put in place a variety of measures that would encourage banks to modify mortgages rather than evict.

“I’m really hopeful something comes out of this,” said Jay Speer of the Virginia Poverty Law Center. “It’s starting to look like the last chance for real reform. The Virginia legislature still has this amazing allegiance to the big banks.”

If the negotiations are being conducted behind the scenes, the banks and their supporters are openly waging a battle for popular sentiment. The banks are presenting themselves as champions of those homeowners who might be hostile to the idea of someone in default getting an undeserved break.

Banks say cutting the mortgage debt of foreclosed families into something more bearable creates issues of moral hazard — that people will default to get a better deal.

Even as JPMorgan Chase representatives were meeting with the task force, the bank’s chief executive, Jamie Dimon, was rejecting the idea of writing down delinquent balances.

“Yeah, that’s off the table,” Mr. Dimon told reporters after a United States Chamber of Commerce forum in Washington.

His comments echoed previous remarks by other bankers, including the Wells Fargo chief executive John G. Stumpf, who said “it makes no sense” to entice people not to pay their debts.

Four Republican attorneys general wrote a letter last week to Mr. Miller of Iowa, expressing concern with the “scope, regulatory nature and unintended consequences,” of the settlement proposals, particularly with the question of principal reductions. The attorney general of Virginia, Kenneth T. Cuccinelli, one of the signatories, was invited to Wednesday’s session to allay his concerns.

Critics of the banks say the entire issue is a red herring, and that principal writedowns are not such a gift that people would default to get them. [EDITOR’S NOTE: IT’S NO GIFT IF IT IS RESTITUTION FOR FRAUD]

“Moral hazard is being invoked by the banks and their defenders as an excuse to do nothing, rather than out of any real concern for fairness,” Mr. Levitin said.

9 Responses

  1. Charles, You have to send everything Certified Mail, registered return receipt (the little green card). Send it certified mail and then by fax as well. Keep the receipt from the fax machine that you sent it. Call them every single week and write it down.

  2. What follows is a chronology of events in recent attempt of ours to get an AG Loan modification from Bank of America

    3/21/2011: – Told I was accepted as qualified for AG Modification program. Told package would arrive in 10 days

    4/4/2011: – Called back spoke to a Peter. Package was still not sent. Request was escalated. Told to call back in 2 weeks to check status.

    4/18/2011: – Spoke to a Supervisor called Lillian. She said package had still not been sent and she would escalate the issue for the 2nd time. She said to call back in 2 weeks to check status.

    4/25/2011: – Spoke to an Audrey. Audrey said package had not been sent and that I was given erroneous information in my previous calls. Wait time for package is actually 30- 45 days from the date I qualified for the modification (3/21/2011). Said to call back then. I told her that today was over 30 days from 3/21/2011? She said give it 2 more weeks.

    5/5/2011: – Spoke to a David. He said package had not been sent. He said that everyone else I’d spoken to in the past had given me incorrect information, including Audrey. He said that the wait time is 90 days from qualified date. I said this can’t be, we’ve spoken to 4 different people and this was never mentioned. He said there was nothing he could do. We should call back after that period and then they could escalate it properly. Apparently all the other escalations were not heeded.

    6/20/2011: – Had the most shocking call with a ‘Brianna Coleman’ who is apparently a supervisor. I made inquiry into where the package was as it had now been over 90 days since I qualified for the AG modification and the package was on it’s way. She took a look at the record and indicated that the reason I was not getting the package was because a package was already sent in Feb 2009. That package was never signed and sent back so we no longer qualified for this modification. I told her this was a bold faced lie and that I had never ever received a package from them in Feb 2009 because we never requested one. The first time any type of modification was ever applied for was in Oct 2009. I also indicated that throughout this 90 day process, no one had mentioned one thing about this. Where did this suddenly come from? She said she could send proof that this package was sent. I asked her to send proof of delivery.

    Till today, no such proof of delivery has been sent.

    It has become obvious that BoA is not interested in working with those of us who qualify for a modification. Instead, they resort to all sorts of delay tactics to frustrate us till we can no longer cope

    All I need is a modification on an ARM loan from 10.1% to something more reasonable.

    Alas, it all falls on deaf ears.

  3. tony,

    Exactly my thought. But, despite any good case – they will try to silence.

  4. It makes no sense to commit fraud but they did it so there you have it.If people examined thier documentation more closely nobody would be paying thier bills never mind the fraudulent mortgage.Go figure on that one.

  5. Yeah, that’s off the table,” Mr. Dimon told reporters after a United States Chamber of Commerce forum in Washington.

    His comments echoed previous remarks by other bankers, including the Wells Fargo chief executive John G. Stumpf, who said “it makes no sense” to entice people not to pay their debts
    Yea that ‘s right off the table and in my pocket in the form of punitive damages as I have the original note and the fradulent assignment that they tried to pass off from MERS directly to the successor trustee 16 days after the pendency and complaint in 2009 is another fraud upon the court since MERS sent me a letter stating IT was removed from their system and the MIN # deactivated in 2002. I also have a sworn affidavit from the servicer /seller into the certificate series that warrants and represents that the note has never been assigned to anyone !!!

  6. I have to agree that it will take anger and getting out there to protest. They will just ignore us if we don’t. Be angry! It works. Burmese8@yahoo.com

  7. I agree. All of this is a bunch of BS — we need to band together to make it public. Yeah, nobody wants to hear it; well too bad. We still have freedom of speech in this country and we will have the right to use it, so

    C’MON PEOPLE! Let’s give ’em hell and let them know we’re here. TELL THEM:

    WE’RE MAD AS HELL AND WE’RE NOT GONNA TAKE IT ANYMORE!

  8. WELLS FARGO IS A FRAUD!
    I and other tried to get mods fro the bank . They will pull every trick in the book even with Fannie Mae loans. They employ attorneys in Wis. to foreclose. Illegally if necessary. WF has a robosigner operation with ASC in SC. I have a letter from the Office of the President that Robosigning is ok with a Judicial State because the papers are overseen by a judge. I wrote the Wis AG and they wrote back get an attorney. We do not represent individual cases. They never give a reason or tell you they pulled your credit report violating FCRA. They don’t care unless they are squezed into a corner and then they will make an undisclosed settlement. It is sickining to read 3 pages of foreclosures in Racine’s Newspapers and most of the Plaintiffs are Wells Fargo and all the cases get rubberstamped by the judges. I am going to appeal and ask for money. If the judges won’t do it I will ask for a jury trial and cite RICO so damages can be awarded.
    Stan Putra
    Racine, Wi

  9. I have given up on our government protecting it’s people.

    Rather, I believe we all need to TAKE TO THE STREETS EN MASSE.

    http://www.usuncut.org is having actions in every city, state, in the US. In the UK, last weekend, they had 250,000 protesters. And they are winning! The British government has opened an investigation into the tax evasion of major British corporations.

    The only thing our government understands is ANGER!!! Let’s show ’em some anger. Many actions will be taken on April 15th (traditional tax day) and on April 18th (current tax day.) Show your support. Get out there EN MASSE!

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