Banks Must Pay Victims of Botched Foreclosures, Regulators Say

The settlement between the servicers and banking regulators imposes more substantial penalties than early reports of the deal indicated.

Palm Coast, FL – April 13, 2011

The 14 largest U.S. mortgage servicers must pay back homeowners for losses from foreclosures or loans that were mishandled in the wake of the housing collapse, according to consent decrees released today.
The settlement between the servicers and banking regulators imposes more substantial penalties than early reports of the deal indicated.
The agreements could also help the U.S. Justice Department determine the size and scope of fines for the flawed practices, regulators said. The department is negotiating a global settlement that, if realized, would include fines from regulators as well as state officials.
“There will be civil money penalties. The issue is time and amount,” acting Comptroller of the Currency John Walsh told reporters in a conference call. “We’d like to see progress on a global settlement.”
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1 reply
  1. Mike Libera
    Mike Libera says:

    Banks Started it; Banks Must Pay!

    I"m a Real Estate broker w/35 years of experience. My Father was VP of a local Bank (when he started his own business in the ’60’s he told friends he was "going straight"). I started my R/E career after college by going to work at a Title Company. The days of Banks being happy w/a 2% mark-up (1% for overhead; 1% for profit) are long gone. Now if they can’t do 200%, they’re not happy. Interest rates are irrelevant; their profits have to come quicker – their eyes are on the fees! The more loans, the more fees. Next, they began packaging and parting out loans, which is the derivative market, Then they cut even more corners to increase profits and invented MERS. Then they twisted arms at the rating companies while manipulating credit rating agencies to lower borrower’s FICO scores to charge higher (and more) fees (ever notice how quickly bad information gets on your credit and how long it takes to get rid of it?). Then lenders who weren’t really Banks at all got into the home loan market to feed at the borrowing public’s expense. Then we bailed them out when they became so overextended (which put borrowers in the unenviable position of paying 2 loans on their home or worse, losing their home while still owing the debt as a taxpayer). Next the lenders (who were supposed to, on a voluntary basis, work with borrowers to stay in their homes, while the same government who encouraged that workout – HAMP – made up any losses the lender may have incurred in the sale). In other words, Banks made MORE by foreclosing. Then they couldn’t even get that right and are now facing one of the most difficult and complex problems ever faced in this nation over who owns what – a cancer on the face of the average American’s largest lifetime investment – the cornerstone of the American Dream – the private family home. Banksters have done their best to destroy that dream and they must pay for what they’ve done. Las Vegas is a cub scout camp today compared to the greed and avarice of Wall Street.

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