Another Day, Another (Inadequate) Foreclosure Settlement
Another mortgage settlement deal was completed over the weekend. And as has been the case with the other mortgage settlements, one side is the pretty clear loser. Care to guess which side that is? Go ahead, I’ll wait. From Gretchen Morgenson in Sunday’s New York Times:
“IF you were hoping that things might be different in 2013 — you know, that bankers would be held responsible for bad behavior or that the government might actually assist troubled homeowners — you can forget it. A settlement reportedly in the works with big banks will soon end a review into foreclosure abuses, and it means more of the same: no accountability for financial institutions and little help for borrowers.”
Fantastic, tell me more, you say? From David Lazarus in today’s Los Angeles Times:
“Ten big banks said Monday that they’ll shell out $8.5 billion to settle federal complaints that they wrongfully foreclosed on hundreds of thousands of homeowners who should have been allowed to stay in their homes.
They got off cheap.
The average compensation for each homeowner who faced foreclosure in 2009 and 2010 will run about $2,000.
That’s a couple thousand bucks for having been deceived and pushed around — and possibly thrown out onto the street — by a bank that was knowingly breaking regulatory procedures in handling distressed properties.”
I’d say we should expect Alan Funt to appear out of the bushes with a camera and a microphone, but old Alan’s been dead for nigh on a decade. We could discuss the specifics of the deal, but they’re honestly infuriating and pretty much beside the point because this is the deal we are stuck with. All of this basically stems from the same fundamental issues anyway, improper and possibly unlawful foreclosure practices (and than the sham foreclosure reviews that followed). If you really want the ugly details, the previous three links plus this post from Yves Smith are good starting places.
To sum up: more slaps on the wrist, more fines that don’t even come close to deterring bad behavior, more papering over alleged fraud, more sweeping everything under the rug, more of the same. It’s another bad deal, and it’s par for the course. There should be an uproar over this, and there isn’t, and there won’t be. This won’t get 0.00001% of the attention that the spawn of Kim Kardashian and Kanye West will receive, and that’s why it will continue to happen. We, as a country, get largely what we deserve.
This type of stuff really puts me in a bad mood. Next thing you’re going to tell me that AIG is considering suing the government for the terms of the bailout that the government provided, after they peppered us with those insipid “Thanks, America” commercials all weekend long.