SELLOUT: AG'S WILLING TO TAKE CASH PAYMENT TO STATES IN LIEU OF RELIEF FOR BORROWERS

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REPUBLICAN AG’S OPPOSE PRINCIPAL CORRECTION

EDITOR’S COMMENT: The close relationship between Republican office holders and the Banks is causing some problems in the “alliance” of 50 states’ attorneys general. Somehow they are maintaining computations of damages at under $20 billion instead of the $2 trillion that actually caved in on investors and homeowners. Instead of breaking off from the Republican AG’s, the Democrats are seeking cover so they keep getting hundreds of millions in campaign contributions and are targeting a public relations triumph instead of a real one. The bottom line is that the “deal” is no deal at all if you are a homeowner sitting with an unworkable mortgage or an investor who is sitting with worthless (and in many cases uncertificated) mortgage bonds.

It is obvious that the control that the Banks have over the government apparatus in all 50 states is working its magic for the megabanks. Recall petition drives in many states may get new momentum from this abdication of responsibility by the highest officer in each state charged with enforcing the laws.

The reason why the Banks don’t want principal correction (principal reduction as they call it) is that they don’t want to admit to the FRAUD that was a prerequisite to getting the money from investors and getting the signature from borrowers. But he FRAUD is still there. The fact remains that both the mortgage bonds and the mortgages were empty – devoid of anything real, because both transactions required, under law, proper, adequate and truthful disclosure of what was being done with the underwriting of the loans, the funding of the loans and the gross profits and fees that the investment banks were siphoning out of the money that should have been headed for investment pools who should have been buying loans and instead were buying the promise of a loan, just as the borrowers should have been getting loan products that work instead of loan products that were guaranteed to fail.

This deal is a sham designed to provide cover for those in office. They should be removed from office. They have the perspective to understand that the mortgage balances are not real and never were. To treat them as real is against any notion of the rule of law. So the only hope for homeowners remains in the courts, where these banks are going to try to say that they already settled the claim, even though the homeowner did not get one bit of relief.

BLOOMBERG: Banks May Negotiate Menu of Options in Foreclosure Deal

U.S. banks and state attorneys general, seeking to avoid $17 billion in court claims over faulty foreclosures, are discussing a settlement framework that may let firms choose from a menu of options for helping borrowers, two people briefed on the talks said.

Under the proposal, Bank of America Corp. (BAC), Wells Fargo & Co. (WFC), JPMorgan Chase & Co., Citigroup Inc. (C) and Ally Financial Inc. would pay penalties and pledge billions of dollars in relief to home buyers, one of the people said, asking not to be named because the talks are private. Firms may fulfill obligations to borrowers over time, choosing among options such as reducing loan principal, cutting fees or paying moving costs, the people said.

Stitching flexibility into settlements may help defuse opposition from a group of Republican attorneys general, who object to principal reductions sought by other states, one of the people said. The pace of talks is accelerating, with parties also nearing agreement on an industrywide overhaul of procedures for handling mortgages, that person said.

State and federal officials have been meeting with the largest U.S. loan servicers to resolve a nationwide probe into documentation lapses during home seizures. Earlier this week, attorneys general told the banks they will face an estimated $17 billion in claims if the inquiries result in civil lawsuits, according to a person with knowledge of the talks. The banks had previously offered to pay $5 billion.

Under the proposal, banks would pay the penalties to the states, which would determine how to use the funds, according to the people briefed on the talks. The separate relief funds, which banks could decide how to provide, are expected to account for a majority of the companies’ costs, one of the people said.

Dan Frahm, a spokesman for Charlotte, North Carolina-based Bank of America, and Sean Kevelighan, a spokesman for New York- based Citigroup, declined to comment. Vickee Adams of San Francisco-based Wells Fargo and Gina Proia of Detroit-based Ally also declined to comment. A representative of New York-based JPMorgan didn’t respond to a request for comment.

Tags: foreclosure, foreclosure defense, foreclosure offense, fraud, Lender Liability, securitization, TILA audit, trustee
Posted in bubble, Corruption, Eviction, securities fraud |