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Sat Jan 21, 2012, 10:57 AM

 

Obama to Grant Banks Robosigning Immunity [View all]

January 21, 2012
By Gustav Wynn

Despite months of outcry, the Obama administration is drawing closer to a deal with the five biggest mortgage banks to settle charges of robo-signing and foreclosure fraud. Led by NY AG Eric Schneiderman, six rogue AGs have defied the "50 state" panel, DOJ and HUD, insisting on carrying forward investigations into forged documents and improper procedures but bank-friendly authorities are seeking a more bank-friendly approach.

Without considering the guilt or innocence of the five major banks involved, the Obama Administration is poised to let Wall Street off the hook for foreclosures where as many as one million borrowers were "harmed" by robo-signing practices.

In a three-author article, the Wall Street Journal was abuzz concerning the impending settlement which will grant immunity for innumerable counts of robo-signing violations in exchange for loan "haircuts". Quoting HUD Secretary Shaun Donovan, the Journal glowingly describes the deal as the largest principal reduction of the crisis, promising a million borrowers a share of some $19 billion in relief on their loans:

"As part of the proposed settlement, Mr. Donovan said, a "number of families" who were harmed by foreclosure-processing mistakes would be directly compensated by banks."

The banks would also agree to reforms, as part of the practice of "deferred prosecution" that Obama has continued from the Bush era. The back-room wrangling between Wall Street giants and the SEC and DOJ have undoubtedly shown great tolerance of the reckless behavior that drove the US economy into the ditch.

With banks paying fines that represent small totals of their annual profits, the settlements have been considered a nicely manageable cost of doing business. But with the preponderance of industry flacks winding up regulating themselves, public outrage hit new highs this fall.

Link: http://www.opednews.com/articles/Obama-to-Grant-Banks-Robos-by-Gustav-Wynn-120121-502.html

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