HuffPo: Robo-Signing Bank Settlement Is a Criminal Sell Out [View all]

[stockholmer]

http://www.huffingtonpost.com/dennis-m-kelleher/foreclosure-settlement-mortgage-crisis_b_1264998.html

"Let me help a few victims I created by ripping them off and illegally throwing them out of their homes by false court filings that I swore were true." That's what the so-called mortgage settlement talks are really all about: fraud, perjury and crimes. That's what these banks did and that's what they are trying to buy their way out of.

The settlement discussions are the same: eliminate all or almost all liability for the bank and, most importantly, all bank officers and employees in exchange for a loan forgiveness or modification program. Think about this: the banks engaged in a years' long pattern and practice of what can only be described as fraudulent if not criminal conduct that would put anyone else in prison for years if not decades, yet banks get to buy off the cops with some money to help just a few of the victims they created. Worst of all, there is no requirement in any of these talks that I'm aware of that require the banks to come clean, publicly release all the relevant documents and provide sufficient information on their conduct so that anyone can evaluate whether the sell-out, I mean, pay-off, oops, I mean, "settlement" is anywhere near adequate.

And they get to buy their way out of prosecution for chump-change. It's reported that the settlement is going be $25 billion, with only $5 billion in cash and $20 billion in "loan forgiveness." That's nothing. There are more than 10 million homes under water where the amount they owe on their mortgages is more than the house is valued, i.e., could be sold for. $20 billion doesn't make a dent in that: 1 million homes at $20,000 loan forgiveness is it. And, remember, $20 billion in loan forgiveness to the banks is not equal to $20 billion in cash. It is probably more like $10 billion, if that, due to accounting, prior write-downs and similar shenanigans.

There is also the risk of a tacit conspiracy here. The banks want to "put this behind them" (gee, who wouldn't) and escape from real liability (criminal and civil) and the prosecutors (many of them politicians) and the administration want to claim victory. You will hear that the settlement was the largest, one of the largest or the greatest settlement in history that will help millions or billions or trillions of people who need help -- you get the point: no hyperbole will be spared. As if all that wasn't bad enough, the most egregious aspect of all this may be the reporting: stories repeatedly use innocuous, but grossly misleading words that obscure what really happened here. For example, so-called "robo signing" is massive, systematic, fraudulent, criminal conduct. This is where banks themselves or their contractors sign legal documents to file in court swearing under oath that the facts are true and therefore support the legal application to take someone's home away from them, i.e., foreclose.

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