Feb. 6 (Bloomberg) — Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. made a last minute demand that New York drop claims filed against them Feb. 3 as a condition of a $25 billion nationwide settlement over foreclosure abuses, a person familiar with the matter said.
The deadline for states to sign the proposed deal is today. The push by the three banks raised a new obstacle in getting New York Attorney General Eric Schneiderman’s support for the deal, said the person. Schneiderman, along with the attorneys general of California, Nevada and Delaware, has voiced concerns about the terms of the accord.
Now we’ll see what sort of balls Schneiderman has.
This is what should happen — Schneiderman should tell them to go to hell. If the other states want to settle, that’s fine, but for the banksters to play this sort of hostage game — well, it simply can’t be allowed to stand.
One would hope that Nevada’s AG, which recently passed a law that requires foreclosing parties to certify under penalty of felony indictment that they have the proper paperwork and chain of title before foreclosing, would also erect the middle finger.
Interestingly enough since that law went into effect rendering any false or robosigned filing a criminal felony (and $5,000 fine for each document) offense new foreclosure filings have effectively ceased by these very same banks. Never mind the 606 count indictment that came out of the Nevada AG’s office shortly thereafter.
Is that an admission that the banks don’t have proper title to the notes and can’t document proper procedure? Good question.
But this much is certain — Schneiderman, California AG Kamala Harris and Deleware’s Beau Biden, along with Nevada and New York all ought to tell these banks to stick it.
That’s simple — those who were illegally foreclosed won’t get much if anything at all out of this deal, and the so-called “principal forgiveness” isn’t worth the paper it’s written on. Those deals will be preferentially handed out to protect the banks’ second lines, doing little or nothing for the vast majority of the borrowers.
Worse, none of the proposed settlement will do a damn thing to address the harm that has been done or extract punishment. And it is punishment that is needed — punishment so severe that nobody will ever think of doing it again. We already have a so-called “settlement” with regard to wrongful foreclosures and similar with regard to Countrywide, and while it was supposed to grant billions in relief to homeowners it has both brought almost no actual help and not been enforced.
One of the key un-addressed issues is the fact that our land title system has been corrupted beyond belief by these institutions. This must be fixed, and it is the banks who must fix it and spend whatever it takes to do so. Every single assignment and mortgage has to be audited and cleared through either to the trust it is in or an admission must be made that it was never forwarded and the trusts are in fact empty artifices. If the latter has occurred en-masse, and it certainly appears it has, people need to go to prison and those who bought these instruments in good faith and are holding empty boxes must be made whole. If this collapses the major financial institutions in this country then so be it — we cannot have a nation where being a “big company” means you can literally blow farts at the law any time you please.
The worst part of this is not just that the FBI warned early in the decade of an epidemic of fraud, or that property appraisers sent a petition warning of the same thing. Oh no, there was actually an investigation at Fannie that showed these practices were rampant — including robosigning — in 2003.
This is a decade-long, and perhaps longer, outrage. The entities involved must be held to account. A decade or more of abuse of the public is not compensated for with $25 billion, with the firms involved going about their business in the usual “cost of doing business” sort of handslap. This apparent organized set of actions, recklessly (at best) or even intentionally taken calls for recession of banking licenses and revocation of corporate charters, along with indictments where still possible under the statute of limitations.
Nothing less will do.