The $25 billion agreement with five banks to end federal and state probes into abusive foreclosure practices was filed in U.S. court in Washington, capping negotiations over the lenders’ liability for conduct after the housing bust.The agreement subjects the lenders to monitoring by officials plus penalties of as much as $1 million for each violation, the U.S. Justice Department said. The consent judgments will be in effect for 3 ½ years, according to the settlement terms.
The Justice Department today filed in federal court the proposed settlements along with a civil complaint against Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and three other banks. The agreement needs approval from a federal judge.
In what the U.S. called the largest federal-state civil settlement in the nation’s history, the banks have committed $20 billion in relief for borrowers plus payments of $5 billion to states and the federal government. About $1.5 billion will go toward payments to those who lost homes in foreclosure between Jan. 1, 2008, and Dec. 31, 2011, the Justice Department said.
Thoughts?
What boggles my mind is that there seem to very few publicized cases (any?) of banks foreclosing on people who actually made payments. ALL OF THESE PEOPLE HAD DEFAULTED ON THEIR LOANS!! So they all deserved to be foreclosed on, but the banks are paying $25bil because they failed to follow certain procedures, which still did not result in any incorrect foreclosures, at least not on a material scale.
^^ maybe, but I'd like to see how you feel when it's your turn to be foreclosed.
Anyway, banks played and they've lost. Too bad. Isn't the risk supposed to be factored in the price when they sold it? Wait, if they never lose, why do they call it a risk?
^^ To be clear this $25bil is not a credit risk loss. It is not the loss attributable to defaulted loans. They should (and do) suffer losses on that risk. This settlement is a fine for them violating standard operating procedures, the violation of which does not appear to have actually caused any real harm (i.e., people current on their payments being foreclosed on). This settlement seems to be a backdoor way to transfer money from banks to homeowners who are under water.
I agree with you, but my point is that the "game" does not end until you get the money on your account. Even if it means involving the government during an election year...
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