BAIR: INDUSTRY COULD BE REELING FOR YEARS TO COME

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EDITOR’S NOTE: They report this like $20 billion is a big number. The Banks caused tens of trillions of dollars in damages, stole $13 trillion from investors, stole some $5 trillion worth of property from homeowners who legally still probably own the property but don’t know it, and they are making a big deal out of $20 billion. That number is a rounding error on the real numbers.

 

Foreclosure Fraud Price Tag: $20 Billion

Foreclosure Crisis

First Posted: 06/ 6/11 09:52 PM ET Updated: 06/ 6/11 09:52 PM ET

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WASHINGTON — The nation’s largest mortgage companies are operating on the assumption that they will have to pay as much as $20 billion to resolve claims of widespread foreclosure abuse, an amount four times what they had originally proposed, the top federal official overseeing the discussions told state officials Monday, according to people who participated in the conversation.

Associate U.S. Attorney General Tom Perrelli told a bipartisan group of state attorneys general during a conference call that he believes the banks have accepted the realization that a wide-ranging settlement to the months-long probes will cost them much more than the $5 billion offer they floated last month, according to officials with direct knowledge of the call. Perrelli said he’s basing his belief on his recent conversations with representatives of the five targeted firms: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

Three unresolved issues remain, these people said. State and federal officials have not agreed on the scope of banks’ release from liability that would accompany such a deal; negotiators continue to hammer out how much of the money pot will be split between restructuring borrowers’ mortgages and bank fines, and officials are not yet near an agreement on how the coalition of state and federal government agencies will monitor and enforce bank behavior in the wake of a settlement agreement.

The settlement talks are the result of state and federal investigations launched last autumn after widespread reports that the five largest mortgage handlers illegally seized the homes of an unknown number of homeowners and improperly accelerated foreclosure proceedings by failing to amass required paperwork, in some cases allegedly lying about it to local judges. Over the past couple months, government officials have been in discussions with the banks to resolve claims of past abuses and set new standards to govern bank dealings with distressed homeowners.

The banks seek a quick resolution, according to sources who have participated in settlement talks, as falling home prices, a continuing high rate of delinquent borrowers, stagnant home sales, rising unemployment and slower economic growth batters bank stocks. Shares of Bank of America, the largest mortgage servicer, hit a two-year low Monday. Citigroup fell more than four percent. The 24-company KBW Bank Index has fallen nearly 11 percent over the past three months.

Top officials in the Obama administration, like Treasury Secretary Timothy Geithner, have said they want a quick settlement, too. Bank regulator Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, told a Senate panel last month that a settlement must be reached due to “significant” damages the banks face from “flawed mortgage banking processes [that] have potentially infected millions of foreclosures.”

The industry could be reeling for years, Bair warned.

9 Responses

  1. […] BAIR: INDUSTRY COULD BE REELING FOR YEARS TO COME MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE EDITOR’S NOTE: They report this like $20 billion is a big number. The Banks caused tens of trillions of dollars in damages, stole $13 trillion from investors, stole some $5 trillion worth of property from homeowners who legally still probably own the property […] […]

  2. Common English Bankster-Speak

    Illegal Questionable

    Criminal Shoddy

    Crimes Irregularities

    Laws Technicalities

    Fraud Sloppiness

    Commonplace Isolated

    Frequently Rarely

    Enraged Pleased

    Ongoing Stopped

    Ignored Investigated

    Current Delinquent

    Taxpayer dollars Bonuses

    Insolvent Profitable

    Modify Foreclose

    Transparency NA

    We’ll take a fresh look… Uh oh, the media got a hold of this one.

    Okay, so that’s a start anyway. Send your suggestions to mandelman@mac.com.

    http://mandelman.ml-implode.com/2011/06/mandelman%e2%80%99s-monthly-museletter-%e2%80%93-version-13-0/

  3. Since when has any government intervention/ settlement ever helped at the level of the individual. They will take away your right to seek any remedy and at best you will get another fake modification. Any monetary settlement the government will appropriate for the “general welfare.”

  4. Well, there you go – AG’s and Feds planting the seed that $5 Billion is too low and they are fighting for more along the lines of $20 B. It has to be a ploy so that finally, when they all get together, the AG’s, the Feds, the banks, that the people just might think they won something or got some real substantial contribution for the bank’s wrong doing. The banks are well prepared to pay the $20 B but we have to play these games. When does it end for the people?. And those that have claims will end up signing away their rights.

    This is what happens when as has been said many times on this very blog, if the people don’t do something on their own behalf or as a group, without the AG’s or the feds, and deal with the banks themselves – (and we had plenty of ammunition but were too busy spending time in the Courts or not even getting involved at all) to make it known to the AG’s that the people must have their voice. How many times did we say it and now, because of a lack of attention and inaction by the people, they will get their way.

    To try to make us believe that they are fighting for us and that they are going to get the banks to do better than $5B is a complete lack of respect and enforcement of the law which should have been used to protect the consumer. The AG’s did not do their jobs during 2000 to 2009 and only got involved because of the robo signing which was nothing more than the tip of the iceberg and which was used as a smoke screen (ever so lightly) to cover for the real fraud. Fortunately, this site has been on top of the real issues and as such, gave all of us what we needed to either take steps individually or as a group. That was not done and just a very few percentage have been able to fight it in district court and many now in bk court.

    We had everything we needed over a year ago and sat back and did nothing substantial to get the people’s voice heard. We have just sacrificed, if things do not get turned around, the rule of law right under the noses of the other 95% of the homeowners who would not support what the lenders and their servicers were doing in order to protect not only themselves, but Wall Street.

    In the hands of a few go the rewards of many. Did you lose your house today to the bank? If you did, will you get a chance to recover that home for the wrong doing or will you end up getting a pittance of a settlement that was put forth on your behalf by others who did not do their jobs and helped create this mess. The Congress, the AG’s and Law Enforcement – Fraud is Fraud where it can be proved.

  5. I don’t get how the state can settle on behalf of homeowners who have been robbed and have not agreed to a settlement?

  6. As to the brouhaha over the “quick settlements” …

    The quick brown fox jumped over the lazy dog’s back.

    Type the foregoing sentence as many times as your brain can comprehend. After you come down with a severe case of carpal tunnel or your eyes glaze over from the radiation being emitted by your computer, then you begin to realize that the settlements are political in nature and the banks and their subordinate interests will do everything in their power to pay off those elected officials whom you trusted with your vote.

    Having Geithner handle anything is like putting the fox in charge of the chicken coop. What planet is Bair on? She is dreaming on the figures. By the time you factor in the legal costs of the quiet title actions, you will have flushed billions more into the private sector … and only a small portion of it at that.

    If you’ll look at the new foreclosure law Hawaii’s governor just signed into law, you’d wonder why the rest of the states didn’t quickly follow suit. That’s because Hawaii is predominantly Democrat-controlled and they are more for the people than the banks.

    If you want to kill an economy, just kill the flow of dollars by short circuiting the flow of money into the market (read Vassily Leontief, Scientific American, 1980 … he won the Nobel Prize in Economics for his “flow chart” and system he designed showing how the central banks can choke off an economy, polarize governments, turn family members against each other … all in one nice tidy little package … the central banks needless to say, love his work!)

    “They” are not done killing our economy yet. The other shoe has not fallen … but it will … and soon.

    Got your chain of title assessment done yet. Get your checklist FREE by emailing me through the website at http://www.cloudedtitles.com … prepare now for the future onslaught and take a number because in the sand states you’re in for a wild ride!

  7. Bank regulator (?) Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, told a Senate panel last month that a settlement must be reached due to “significant” damages the banks face from “flawed mortgage banking processes [that] have potentially infected millions of foreclosures.”

    The industry could be reeling for years, Bair warned.

    Sheila Bair IS NOT A REGULATOR!!! At least she hasn’t been working in that capacity. However, she is getting brave and courageous now that she’s offered up her resignation.

  8. Top officials in the Obama administration, like Treasury Secretary Timothy Geithner, have said they want a quick settlement, too. Bank regulator Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, told a Senate panel last month that a settlement must be reached due to “significant” damages the banks face from “flawed mortgage banking processes [that] have potentially infected millions of foreclosures.”

    THE GREAT DOG AND PONY SHOW CONTINUES…..QUICK SETTLEMENT MY A$$.

    THINK OF THE AMOUNT ENCUMBERED BY THE POOLED MORTGAGES?

    AND,

    WHO GETS THE “SPLIT” ON 20B…..THE STATES…..TO DO WHAT WITH SOME UNKNNOWN PROGRAM FOR HOME OWNERS AFTER SOME BS SETTLEMENT. AHHHH, THE GENERAL FUND BEGINS TO REBUILD.

  9. […] Source: Livinglies’s Weblog […]

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