Now notice all these ideas are being evaluated in a vacuum. We don’t know what liability the banks would be released from (the legal term is what form of release they would receive). Nor do we or the regulators have an even remotely adequate understanding of all the bad stuff the banks did. The media and anti-foreclosure attorneys have reported on various abuses, most importantly, servicer driven foreclosures, in which the borrower has either made all his payments, or perhaps been late on one or two, and impermissible application of payment, fee pyramiding and junk fees quickly drive a minor arrearage that most borrowers could correct into a foreclosure.
So despite my caviling, if the release covered only robo-signing and false affidavits, this deal (the 27 page term sheet plus a commitment to do mortgage mods) would be a very good deal for homeowners. But if it was a broad waiver, it would be a steal for the banks.
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