Make the Banks Pay

Allied Home Mortgage Is Sued Over Bad Loans
By The Associated Press, Nov. 1, 2011

The federal government sued one of the nation’s largest privately held mortgage brokers on Tuesday, saying its decade-long lending practices amounted to fraud and cost the government hundreds of millions of dollars and forced thousands of American homeowners to lose their homes.

4 Million Borrowers Eligible for Foreclosure Review
By Brady Dennis, Washington Post, Nov. 1, 2011

More than 4 million borrowers who have faced foreclosure since early 2009 will have the chance to have their cases reviewed for potential wrongdoing, federal regulators and some of the nation’s largest mortgage servicers announced Tuesday. Also, read this Wall Street Journal story, and this Los Angeles Times article.

Make the Banks Pay
By Adam Levitin, Salon.com Oct. 27 2011

There is $700 billion in negative equity in the U.S. housing market. That means Americans owe $700 billion more than their homes are worth. Any plan for the housing sector or the U.S. economy, that doesn’t take a serious bite out of negative equity isn’t serious.

Terms for Proposed Foreclosure Fraud Settlement Shock the Conscience
By David Dayen, Fire Dog Lake, October 30, 2011

I’ve ignored the past few breathless reports about an imminent settlement by state Attorneys General and the big banks over foreclosure fraud, because we’ve been hearing the same talk about a settlement for over a year now, and because several states have already dropped out of the talks. But that doesn’t mean a bad settlement with the remaining states may not be inked, one that would indemnify the banks from state-level prosecution for a series of crimes at practically all stages of the mortgage process, in exchange for a relative pittance. Gretchen Morgenson puts more meat on the bones of what’s actually being offered as far as the bank side is concerned, and they would really get off with nary a scratch.