UPDATE on Good Faith: Homeowners Betrayed, Banks Unreal: California Investigates, Refuses Pre-Immunity.

 This is an Update of posts which appeared here on October 4 and 27, 2011.

    The settlement talks between the Iowa Attorney General and other representatives of all the State Attorneys General, with the five largest Mortgage Servicers (each of which are also "banks") in the United States, may be nearing a settlement proposal each side will agree to sell to its constituents.  See Gretchen Morgenson, "Fair Game / A Deal That Wouldn't Sting" p. 1, col. 1 (New York Times, "SundayBusiness" Section, Sunday, October 30, 2011).

   Here is a reported tentative breakdown of the sums which would be paid by the Mortgage Servicers, and distributed by the Iowa and other State Attorneys General represented at the talks:

• $                         1,500.00 "to any borrower who lost his or her home to foreclosure since September 2008."
• $                 90,000,000.00 or $ 90 Million to State bank regulators.
• $              750,000,000.00 or $750 Million to the Federal Government.
• $           2,700,000,000.00 or $2.7 Billion more to "participating states".

   In addition, the Mortgage Servicers would get an estimated $20,000,000.00 or $20 Billion in "credits" if they "agree to reduce a predetermined amount of principal owed on mortgages that they own or service for private investors."

   Their cash outlay, apparently akin to the cash component of a structured settlement, is of course estimated at a much lower figure, in this case, between $3.5 Billion and $5 Billion.  Id.

   The linked report provides information only on the amounts of money that the Banks-Mortgage Servicers participating in this settlement might pay.  It does not contain any information on what Release they would require, or mention the fact that they are insisting on a Release that goes way beyond the original conditions when the parties entered into settlement talks over "robosigning" Fraud and other alleged Bad Faith, Unfair Trade practices.

   Why should there be a settlement then which would include all claims based on anything other than the original conditions of the talks?

   What reason do the Attorneys General have for even considering a Release of All Claims including claims not yet made and which they have not yet investigated -- but which clearly concern the Banks more than the "robosigning" and other Claims that have been made?

   And one thing more, at least:  Especially when the money figures they are proposing are about the same as what the Banks would have proposed to pay, even if the Attorneys General had not shown up?

   Please Read The Disclaimer.

 

Comments

[hgstern]

Nancy Germond hosts this week's Thanksgiving-themed roundup of risky posts, and your post is in it:

http://insurancewriter.com/blog/2011/11/16/cavalcade-of-risk-144-is-a-turkey/

Please tell your readers.

And a friendly reminder to newbies and regulars alike that, while it's not mandatory to give a link back, it’s the way that carnivals work best. If your submitted post has been included in the Cav, please remember to post about it on your blog because it helps us all.

Thanks!

Hank Stern