Monday, December 31, 2012

Housing Deal Fails to Prosecute Criminal Misdeeds

Settlement Expected on Past Abuses in Home Loans By Jessica Silver-Greenberg, The New York Times 31 December 12 Published: December 30, 2012

[Excerpted] Banking regulators are close to a $10 billion settlement with 14 banks that would end the government's efforts to hold lenders responsible for foreclosure abuses like faulty paperwork and excessive fees that may have led to evictions, according to people with knowledge of the discussions.

....Federal agencies like the Securities and Exchange Commission and the Justice Department are continuing to pursue the banks for their packaging and sale of troubled mortgage securities that imploded during the financial crisis. 

Housing advocates were largely unaware of the latest rounds of secret talks, which have been occurring for roughly a month. But some have criticized the government for not dealing more harshly with bankers in light of their lax standards for making loans and packaging them as investments, as well as their problems with modifying troubled loans and processing foreclosures....

When regulators approached the banks to broach a settlement this month, they met first with Wells Fargo and proposed that the banks pay $15 billion, according to the people familiar with the discussions. After negotiations, though, the regulators agreed to $10 billion.

All of the 14 banks are expected to sign on. 

Majia here: The banks are willing to sign because, once again, they are absolved of any criminal misdeeds.


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