Bank Settlement could be a free pass as fraud by bankers becomes acceptable

It sounds like the banks got their way when it came to this mortgage settlement.  Otherwise they would likely have continued their stalling techniques and continued to hold the government and the country hostage as they threw up smoke screens to hide their criminal behavior.  Just glancing over some terms of the settlement make it clear that those who have suffered the most will likely get nothing near what the deserve.  For example borrower who lost their home to foreclosure due to acts of fraud and deception by the banks, will now be rewarded with a 1500-2000 payment for their pain and suffering. 

Lets get this straight and make sure I am reading this correctly. 

homeowner loses home to party with no legal right to take the property
banks knowingly, in most cases, proceeded to move forward with the knowledge that they were committing fraud

And rather than go after those parties at the heart of the crisis this settlement givers those wronged homeowners a chance to possible collect 1500 to 2000 if they jump through enough hoops.  I believe what I am seeing but I can't believe I am seeing in the United States of America.  The government/wall street complex has taken over the country and citizens are getting shafted.  In the long run will it ever be possible for the public trust in government to return?  Seems like a logical question since politicians are more worried about campaign donation and getting re elected than they are about doing what is right and just in this country.  Corporate criminal behavior has been sanctioned by the government.  The entity that we have lived with for years that was created to protect the public interest has joined forces with the Too Big To Fail banks and hung the American People out to dry. 

The administration is only trying to put on a show before the election to garner votes from those who will be lead to believe that they is in the best interest of the public.  News Flash!, public gets screwed in mortgage settlement.  Obama attempts to placate middle American with a milk bone.

It is still possible that there may be criminal prosecutions for the fraudulent activity that lead to the demise and then the stagnation in the housing market.  However, this is one of many spin attempts to take eyes off the egregious nature of these crimes.  It certainly will not make the banks look bad or take any further hits to their public imagine.  It will take a  little while before we see the effects of this settlement on the housing market. 

Nevada Says Bank Broke Mortgage Settlement

 From the New York Times

Nevada Says Bank Broke Mortgage Settlement

By GRETCHEN MORGENSON

The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can proceed with a suit against the bank over allegations of deceptive lending, marketing and loan servicing practices.
In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.
In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.
The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.
But foreclosure problems mounted in Nevada, where Countrywide originated 262,622 loans, and complaints about the bank’s loan servicing practices began flooding into Ms. Masto’s office shortly after the settlement was struck. She found that Bank of America had “materially and almost immediately violated” the terms of the settlement, according to the complaint.
Ms. Masto declined to comment beyond the court filing.
Jumana Bauwens, a spokeswoman for Bank of America, said the bank was reviewing Ms. Masto’s complaint. “We disagree that there has been any material breach of the consent decree and will continue to vigorously defend this action,” she said.
Ms. Masto’s request to terminate the 2008 deal could raise further questions about the extent of its liabilities arising from Countrywide’s lending practices and from the bank’s own loan servicing activities in the foreclosure crisis. The move by the Nevada attorney general could also imperil the already shaky negotiations over improper foreclosure practices being conducted by state attorneys general and the four largest banks, including Bank of America.
Those talks, which also involve federal officials, have stalled over the summer with disagreements over whether the deal would allow state regulators to bring future lawsuits against the institutions for questionable practices. Attorneys general who do not want to give up the right to file additional suits against the banks — including Ms. Masto, Eric Schneiderman of New York and Beau Biden of Delaware — have declined to endorse a proposed settlement.
The breadth of the new Nevada complaint indicates that Bank of America’s problems extend throughout its mortgage operations, including origination, loan servicing and securitization. Nevada officials also found broad problems in the bank’s interactions with imperiled borrowers.
For example, the complaint says the bank advised credit reporting agencies that consumers were in default when they were not, and contends that Bank of America employees deceived borrowers about why their requests to modify loans were denied. In addition, it says, the bank falsely claimed that the actual owners of loans had refused to allow changes to their mortgages, and it incorrectly claimed that borrowers had failed to make payments on trial loan modifications when in fact they had. Bank of America also misled borrowers, the Nevada attorney general’s filing noted, by offering loan modifications with one set of terms only to come back with a substantially different deal.
Among the more troubling findings in the Nevada complaint is the contention by several Bank of America employees that the company imposed strict limits on the amount of time they could spend on the phone assisting troubled borrowers seeking help with their loans.
One worker said in a deposition cited in the complaint that employees were punished if they spent more than seven minutes or 10 minutes with a customer. Even though these limits allowed almost no time for assistance, Bank of America employees who did not curtail their conversations were reprimanded, this employee said.
The Nevada filing also maintains that Countrywide, which Bank of America acquired in 2008, did not deliver necessary loan documentation when it put together mortgage securities and sold them to investors during the boom. Under the typical pooling and servicing agreements struck between Countrywide and investors who bought the securities, the bank was required to endorse the mortgage note and deliver it to the trustee overseeing the pool. Countrywide failed to do so, the complaint notes.
These paperwork failures should have barred the bank from foreclosing on borrowers, the Nevada complaint says, but it went ahead nonetheless. This aspect of Ms. Masto’s complaint echoes a lawsuit filed in early August by Mr. Schneiderman, the New York attorney general, to block a settlement between Bank of New York and Bank of America covering 530 Countrywide mortgage pools. In that case, Mr. Schneiderman contends that Countrywide did not deposit loans into the mortgage pools as required and that the bank had no right to bring foreclosure actions against these borrowers.
Ms. Masto’s complaint asks that the court impose civil penalties on Bank of America and order it to cover the costs of caring for foreclosed properties borne by municipalities.