Friday, April 1, 2011

Foreclosuregate: Federal Regulators to Step In, Without Waiting for State AGs to Settle With Servicers

Taking a rare break from the Japan earthquake/tsunami/Fukushima I Nuke disaster coverage...

Since the State AGs cannot seem to get their act together to settle with the mortgage servicers (i.e. big commercial banks in the US) and sell out homeowners (see my March 7 post on that "progress"), the federal banking regulators are stepping in with their own solution, reports American Banker.

Turbo Timmy and Blackhawk Helicopter Ben to the rescue of their beloved TBTF Wall Street banks! Ta-dah!

How could the federal government step in, with uniform federal solution, to what's essentially a state affair? More than half the states have non-judicial foreclosures where the homeowners' rights and recourse that they would have in judicial states do not even exist.

Oh I forgot; it's not about the homeowners. They step in so that the banks can move forward.

Much like Japan's Nuclear and Industrial Safety Agency, whose raison d'etre is to "safeguard" the nuclear industry... (See my post, regarding this agency practically blackmailing Japanese with blackouts so that they don't deviate from "nuclear power is good for you" dogma.)

From American Banker on April Fools Day, 2011:

Regulators Ready Enforcement Orders Against Servicers as State AG Talks Stall

By Cheyenne Hopkins

WASHINGTON — Frustrated by the lack of progress with a global settlement between the 50 state attorneys general and the top mortgage servicers, federal banking regulators are expected to move forward with their own enforcement actions against 14 servicers as early as next week.

The cease and desist orders are expected to establish best practices for the servicing industry, including new documentation verification procedures, oversight from third parties and additional legal counsel, limitations for dual tracking foreclosures and modifications simultaneously, and a comprehensive look back to uncover prior mistakes.

(The article continues.)

Banks will win, there's no question. Toward the end of the article, I see this snippets:

But they soundly rejected the primary push from the AG proposal — principal reductions.

Speaking to reporters after a U.S. Chamber of Commerce event on Wednesday, JPMorgan Chase & Co.'s chairman and chief executive, Jamie Dimon, put it bluntly.

"Principal writedowns for people who couldn't pay their mortgages? Yeah, that's off the table," he said.

Well Mr. Dimon, how about the banks, including yours, who never properly transferred the mortgage they originated or bought into the securitization trusts which then issued RMBS to investors even if the trusts had no mortgages to back those RMBS? Oh I forgot. Naked short-selling is the TBTF banks' specialty. (How are JPM's silver positions doing, I wonder.)

Make sure you view my vid on foreclosuregate that tries to explain from the origination of the mortgage to foreclosure.


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