We have bailed out the mortgage companies that brought us the foreclosure crisis, now the states and a federal government agencies are on the verge of a sellout buyout by the bad guys for fraudulent foreclosures.
The Office of Comptroller of the Currency, or OCC, and the attorney generals for all 50 states are participating in the talks, with five of the main crooks: J. P. Morgan Chase, Wells Fargo, Ally Financial (formerly GMAC), Citigroup and Bank of (everything in) America.
The sum of $20 billion has been thrown around for a while as the total cost of the settlement.
The latest rumor is that the federal part of the settlement would involve credit for reduction of mortgage principal in loan modifications, something we at BLN have been screaming for some years now.
What did these wonderful companies do that would inspire them to fork over these huge amounts of money?
Where do I begin?
A HISTORY OF RIPPING OFF EVERYONE
The best summary of the whole story is “Reckle$$ Endangerment” by Gretchen Morgensten, but lets look at some of the mortgage company fraud highlights:
In the worst acquisition by an American corporation, bar none, Bank of (everything in) America bought Countrywide just before the real estate bubble burst.
Countrywide was the worst purveyor of predatory loans and bogus mortgages.
A Forbes story quotes Susan Kastner in the Financial Times: “…The Walnut Place investors said that as many as two-thirds of the loans in two Countrywide trusts failed to meet underwriting guidelines, according to their own investigation. Extrapolating that failure rate to the 530 trusts covered by the bank’s settlement, the Walnut Place investors concluded that BofA could be liable to repurchase loans with unpaid principal balances of as much as $242bn.”
The current issues revolve around the corner cutting and rule skipping the mortgage companies have used to accelerate foreclosures.
Paying people to sign hundreds of affidavits a day, each attesting to personal knowledge of the status of a mortgage loan, and each needed for legal proceedings to take back your house.
$20 billion is way short of the actual damages caused by these crooks, and should not be considered for one minute.