Salon has a good piece on the foreclosure settlement and the mess that it has caused. Basically, the banks got a great deal when they only had to pay $3.6 billion in damages for fraud.
Announcing that 14 mortgage servicers committed “violations of applicable state and federal law,” OCC would allow 4.2 million homeowners in foreclosure in 2009 and 2010 to petition for an “independent” review, and would mandate specific restitution for any foreclosure found to be improper. The real goal was to find as few irregularities as possible, to “prove” that the problem was contained to a few isolated cases of sloppy paperwork, and to undermine the other state and federal regulators’ investigations. It was the perfect plan, if your idea of a good plan is to downplay bank malfeasance and subvert justice. This plan began to take water from the moment it began. The Independent Foreclosure Reviews weren’t independent: OCC and the Fed, in their infinite wisdom, decided to let the banks hire and pay for their own third-party reviewers. The predictable consequences included a windfall for the bank consultants hired for the job – they made a combined $2 billion off the reviews – and numerous cases of reviewers deliberately minimizing evidence of borrower harm. Lax and often confusing oversight by OCC and the Fed, documented in a recent Government Accountability Office report, further turned the reviews into a catastrophe.
You can read the rest of the story at the link below. What it helps us to do is to understand that housing finance is still broken in this country.
The Fed messed with the wrong senator - Salon.com
I think that there are more than 14 mortgage institutions that have broken legal regulations out there. How long will it take to recover from the housing crisis? It doesn't look like its going in the right direction at this point.
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