As some may be aware, the federal government has been working with state attorney generals across the country in order to “hold the banks accountable” for past misdeeds. Here’s background on the process and the settlement that’s been released.
The investigations have centered around the practice of “robosigning,” a method the banks have used to quickly get signatures slapped onto mortgage statements so they could go foreclose on homes, or as the victims of these practices may like to call it… fraud.
Robo-signing is a term used by consumer advocates to describe the robotic process of the mass production of false and forged execution of mortgage assignments, satisfactions, affidavits and other legal documents related to mortgage foreclosures and legal matters being created by persons without knowledge of the facts being attested to. It also includes accusations of notary fraud wherein the notaries pre and/or post notarize the affidavits and signatures of so-called robo-signers.
This has lead to thousands — if not tens or hundreds of thousands — of homes to be foreclosed on without the right and legal documentations (and by right and legal, I include “not forged.”). It’s such a rushed and sloppy method that homes have been foreclosed on without documentations at all, and in some cases without even being in default of the mortgage or the bank owning the rights to the home. The problem is so bad and pervasive that upwards of 5,000 members of the military have been illegally foreclosed on.
The scope and problem is so massive that it’s looking like the vast majority of mortgages that have been taken up over the past couple decades simply don’t have the documentations at all, hence the robosigning. The mortgages have been sold back and forth between banks so frequently, that it isn’t at all clear, in many cases, who owns the mortgages.
That means we’re talking about a problem that’s on the scale of trillions of dollars, potentially affecting millions of people.
While thousands of families have suffered from the abuse of this practice, and there’s thousands more who likely will, the government is about to settle with the banks — and give them future immunity — all for the price of giving these families $1800-$2000, the cost of two month’s rent.
From the first link (emphasis mine):
And then there’s the settlement price: $25 billion, divided up several ways. $3 billion will go toward refinancing for current borrowers who are underwater on their loans, as well as short sales. $5 billion will go as a hard cash penalty to the states, which can use them for legal aid services, foreclosure mitigation programs, and ongoing fraud investigations in other areas (one official close to the talks feared that much of that hard cash payout will go in some Republican states toward filling their budget holes). The federal government will get a cash penalty as well. Out of that $5 billion, up to 750,000 borrowers wrongfully foreclosed upon will get a $1,800-$2,000 check if they sign up for it, the equivalent of saying to them “sorry we stole your home, here’s two months rent.”
That’s what the people of this country get as restitution for the banks coming in and stealing their homes — $2000 bucks, if they’re lucky. Imagine what would happen if someone went into a bank and stole $2000, never mind the cost of a home. Their lives would be ruined and they’d be going to jail for years, if not decades.
What’s the worst part of this “deal?” though? The immunity. Generally, when you give a company immunity for certain kinds of crimes they’ve been committing, you want to ensure they’re not committing those crimes anymore. That’s not the case with banks.
They’ve destroyed the old-fashioned system of carefully keeping track of who owned what and don’t have any way of bringing that back from the dead. Banks are continuing to robosign, and will continue to do so in the future, and now we’re giving them the backdoor legal means of doing so without any risk. We’re legalizing mass fraud and not a single vote has been taken.
In the end, this is going to be a far larger bailout than anything the federal government ever enacted through legislation — and it’s a complete sellout of not just the American people, but the idea of the rule of law. We’re making the banks kings, leaving the rest of us, who own homes or who’d like to in the future, no better than serfs in their domain.