Forty-nine state attorneys general signed off on a $25 billion deal with five major banks — one is tempted to say robo-signed — that first and foremost protects the banks from government lawsuits.
Exactly which struggling homeowners will benefit is still being sorted out. If a mortgage is owned or backed by Fannie Mae or Freddie Mac — about 55 percent of all mortgages — it is not eligible for help. Underwater, but making your payments? Do not expect any relief.
Borrowers who lost their homes to dodgy foreclosures might collect $2,000 for what they went through. In theory they could sue their lender, but imagine how much legal time two grand would pay for.
The New York Times reported an audit of recent foreclosures in San Francisco County found most all involved legal violations or suspicious documentation. It is not clear the settlement goes after the abuses found in the audit.
Past industry standards of confirming a borrower’s credit, capability and collateral sound so ’70s. Instead the lenders signed documents without verifying information. Those instincts carried through at the other end with foreclosures that did not follow legal processes of notice and filings.
The latest wrinkle in the settlement story comes via The Associated Press, which reported that $2.75 billion for states to help prevent foreclosures is being sucked up in state budgets. Governors and legislators covet the cash to plug budget holes.
Lessons learned from the mortgage scandal are about the details. Same for the settlement. And at the end of the day, the tiny, elite minority who govern and control this country slide out the back door. Un-accountable, un-controllable and un-punished.