Unidentified "people close to the talks" say that State Attorneys General have until tomorrow to decide whether to settle with Mortgage Servicers which are also Banks, on undisclosed terms which may involve a Release of "civil state and federal lawsuits about servicing misconduct and faulty foreclosures, and state lawsuits about how they made some of the loans." Aruna Viswanatha and Rick Rothacker, in a copyrighted Reuters news story as it appears on OrlandoSentinel.com on Thursday, Feb. 2, 2012, entitled "States to Decide This Week on Mortgage Deal".
This ends a series begun on Monday, Jan. 30,2012 on Insurance Claims and Issues Weblog. Part 2 was posted on Tuesday, Jan. 31, 2012 on Insurance Claims and Bad Faith Law Blog, and Part 3 was posted yesterday on Insurance Claims and Issues Weblog.
When we ended Part 3 of this series, we made note of the fact that none of the websites of any of the three State Attorneys General who have expressed reservations about, or withdrawn from, the Mortgage Servicers-Banks Mortgage Fraud settlement talks, even posted a press release or any other news about the Federal Residential Mortgage-Backed Securities Working Group.
The three State Attorneys General in question have each already launched their own prosecutions, civil or criminal, and the Obama Administration seems to be applying all the pressure that it can bring to bear on them to settle. The three State Attorneys General involved, are the Attorneys General of:
- California;
- Massachusetts; and
- Nevada.
By way of further information identifying the lawsuits and reservations of these Attorneys General about the 'talks,' the California Attorney General withdrew from the talks and is pursuing California's own prosecution of Mortgage Fraud. October 4 and October 27, 2011 posts on Insurance Claims and Bad Faith Law Blog; see November 1, 2011 post on Insurance Claims and Bad Faith Law Blog.
As if there was not already enough pressure being applied to the California Attorney General to agree to return to the 'talks' and agree to sign the Release demanded by the Banks of all their potential liabilities in the Mortgage Fraud Fiasco, known and unknown, there is this news: Reportedly if those 'talks' result in a settlement, the Banks will pay more money if California signs on to the Release. Aruna Viswantatha and Rick Rothacker, Reuters news report, supra.
The Attorney General of Massachusetts has also filed suit on behalf of her State over Mortgage Fraud. December 4 and December 6, 2011 posts on Insurance Claims and Bad Faith Law Blog.
The Nevada Attorney General has similarly filed suit on behalf of Nevada citizens who have allegedly been damaged by Bank misconduct during the Mortgage Fraud Fiasco. See January 9, 2012 post on Insurance Claims and Issues Weblog, and the links to other reports in it.
No suit appears to be pending against the Banks over their alleged involvement in the Mortgage Fraud Fiasco, which was filed by the Federal Government.
There is however tremendous pressure, as we have seen, which is being applied to State Attorneys General to settle, sight unseen, with the Banks over the Banks' involvement if any in the Mortgage Fraud. We have seen in particular that extreme pressure is being applied by the Administration to three strong women Attorneys General who have rejected the idea of settling, sight unseen.
Given the activities of recent days which result in as much pressure as can be brought to bear by the current Federal Government, it will not be at all surprising if the positions of one or more of the State Attorneys General change.
Time will tell. In the meantime, Mortgage Insurance Companies and Title Insurance Companies will continue to bear the cost of the Mortgage Fraud Fiasco, more or less alone.
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