Banker's Mortgage Counteroffer Makes a Further Mockery of Foreclosure-Gate Negotiations

04-01-2011 • NakedCapitalism.com/

What’s striking is the utter lack of any teeth or any procedural requirements. The banks’ position is that they are to be trusted after having demonstrated again and again that they’ll take anything that is not nailed down. It is drafted wherever possible to make current practices fall within the “settlement”, which means the “settlement” is a total whitewash. Start with the very first point under II A above. The servicers have already done that as a result of the robosigning scandal, or at least that’s what they’ve said over and over in Congressional testimony and to the media. Do we know whether these processes go far enough? The banks’ position is that it’s not the AGs’ or the Federal government’s business. By contrast, the AG/Federal proposal required training, providing sworn statements supporting the borrower’s right to foreclose in non-judicial foreclosure states, clear indication on affidavits as to who the employer was (clarifying the relationship of anyone relying on corporate authorizations), specific requirements as to payment application (as in no holding checks, no use of undisclosed suspense accounts). Aside from the sworn statements in non-judicial states and the training requirements, the other items are basically recastings of current requirements. But the banks refuse to concede even that. They are shooting for a settlement standard at or where possible BELOW that of current law (and since that hasn’t been enforced with any seriousness either, why should they worry?). A lot of belt and suspenders reaffirmation of current law and contractual requirements is gone, such as no fee pyramiding.