Friday, March 4, 2011

Is the Foreclosure Fraud Settlement Overbroad? - Credit Slips

There are a lot of problems with this line of argumentation. First, we don't actually have a tally of servicer malfeasance. Neither the AGs nor the federal regulators have done the sort of investigation necessary to really know the full extent of servicer wrong-doings. Servicers might downplay the harms, but we just don't know. This isn't just robosigning. The banks forfeited their ability to make the "trust me" argument some point in fall of 2008. Second, even if few homeowners themselves were actually harmed, mortgage servicer malfeasance, such as robosigning has done tremendous harm to the legal system and to the housing finance system. Banks shoddy mortgage underwriting and then complete inability to handle the resulting foreclosure tsunami has already deeply eroded confidence in our financial system, which has forstalled economic recovery. That's a harm to everyone in America. Finding out that our largest financial institutions have been at best cavalier about the law and at worst criminal in their handling of foreclosures can hardly be helping the economy recover. Full story here Is the Foreclosure Fraud Settlement Overbroad? - Credit Slips Make big money in penny stocks today

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