The Fed just announced another slap on the wrist for the banks regarding robosigning and foreclosures. I discuss what this means for home buyers…
The Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board just announced they have reached a settlement with the banks over robosigning and fraudclosure. 10 banks/mortgage servicers are going to pay more than $8.5 billion in cash payments and other assistance to help borrowers:
The sum includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision. The agreement ensures that more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 with the participating servicers will receive cash compensation in a timely manner.
This settlement includes Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. I know those institutions will never see a dime of my money. Something I hope you will think about…
While $8.5 Billion sounds like a big amount of money, it really isn’t. If anything, this just shows how totally useless the “Independent” Foreclosure Review was. You see the people that were supposed to reviewing all the reports of fraud or law breaking by the banks were supposed to be paid by the banks but not accountable to them.
But there were reports as far back as 2011 that the OCC was favoring the banks over home owners. I should also point out this article from a law professor at Georgtown that says the Independent Foreclosure Review was doomed from the get go:
I have seldom seen a document that says more about the bullshit malarkey that the OCC and Fed are trying to pass off to cover for the banks
Or maybe this was intentional by the OCC & the Fed?
Maybe they did NOT really want anyone digging very deep as reported long ago on Mandleman Matters:
I must say the whole project is a mess, and a terrible joke on the victims of foreclosure and the American people. It’s a total sham
So this settlement is really just a slap on the wrist for the banks and very little help for those that were wronged.
Seriously, what is wrong with America?
Congress had demanded that the settlement not be announced before there was a hearing on it. We just witnessed just how effective Congress is by their excellent handling of the Fiscal Cliff. So it is no surprise that this announcement was rushed to keep the banks happy and very doubtful that Congress would do anything.
Should news like this scare you if you are planning to buy a home?
Hope for the Best – Plan for the Worst
It should go without saying that buying a home is a very serious financial decision. While mortgage rates and home prices makes right now an excellent time to buy, you have to make sure that you are able to make the payments if something bad happens.
Bad things happen to good people…
I would not be afraid to buy a home today IF I did not already own. I would just make absolutely & positively sure I could afford it. When we bought our home, the banks would loan us much much more than we spent. We knew we did not need to spend more
What we needed was a home we could afford in good times or bad…