The Miami Foreclosure Lawyer Blog reported recently about the settlement that banks and states attorneys have been working on for months.
Sadly, it appears the settlement will do little to help homeowners and to teach banks a lesson. It would be nice if Florida Attorney General Pam Bondi would take a note from her more aggressive colleagues in New York, Delaware, Massachusetts, Massachusetts and Nevada who don’t want banks to get away with robbery.
Our Miami foreclosure defense lawyers reported how the proposed settlement is about $25 billion, split among several of the country’s biggest banks. Banks would end up paying only about 15 to 20 percent of that — $3 to 5 billion.
Most of the rest of the money would be in the form of credits to banks that agree to lower how much is owed on mortgages owned or serviced for private investors. So, those who invested in home mortgage loans would benefit. It’s unclear how homeowners struggling with foreclosure in Miami would really be helped.
As The New York Times points out, New York Attorney General Eric T. Schneiderman is leading the charge against banks. While President Barack Obama wants to finish the settlement — which is now reportedly closer to $20 billion — he and Beau Biden, Delaware’s Attorney General and son of Vice President Joe Biden, are fighting back.
Obama wants the deal to go through, but several attorneys general don’t want to let banks off the hook. The settlement would preclude states from bringing legal action against the banks that could be costly.
These attorneys general want banks to bring out more documents, testify truthfully and do a better job or proving they actually own millions of mortgage notes they are attempting to foreclose on. They are asking for $200 billion, which would allow the government to pay down tens of millions of mortgages.
While it’s unlikely the settlement gets that big, they want to know what banks did to create this mess. They want to know their tactics and they want to know what actually happened behind closed doors when people were struggling to stay in their homes.
“If you don’t air out the policies that led to the implosion of the economy, it will happen again,” Schneiderman told the newspaper. “There’s not one sentence in the proposed agreement, not one period or comma about the stuff that blew up the economy. We can’t let the banks rewrite history.”
The newspaper reports that during the Great Depression, the U.S. Senate hired New York lawyer Ferdinand Pecora to report the collapse of the economy. He found that National City — an ancestor to Citigroup — had sold flawed investments and that its president engaged in a tax evasion-type scheme.
Now, officials in Washington, D.C., are trying to pressure the five or so “rebel” attorneys general into signing the deal so they can tell the American people how great a job they did getting money from the banks. They want it to go away, without anyone asking questions.
But the rebels want answers. They want to know why such an unregulated atmosphere where just about anyone could get a mortgage, which were quickly bundled and sold as investments, was able to happen.
The American people want to know, too. They expect answers, not just a cover-up and a check. What would stop banks from doing it again if they aren’t forced to explain the process and uncover the dirt?
If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991.
More Blog Entries:
Banks Look to Get Away With Misdeeds in Home Foreclosure Cases: November 5, 2011
Bank Excuses on Foreclosure Growing Stale, by Michael Powell, The New York Times