More Whistleblower Leaks on Foreclosure Settlement Show Both Suppression of Evidence and Gross Incompetence

No wonder the Fed and the OCC snubbed a request by Darryl Issa and Elijah Cummings to review the foreclosure fraud settlement before it was finalized early last week. What had leaked out while the Potemkin borrower reviews were underway showed them to be a sham, as we detailed at length in an earlier post. But even so, what actually took place was even worse than hardened cynics had imagined.

We are going to be reporting on this story in detail, since we are conducting an in-depth investigation. But this initial report by Huffington Post gives a window on a good deal of the dubious practices that took place during the foreclosure reviews. I strongly suggest you read the piece in full; there is a lot of nasty stuff on view.

There are some issues that are highlighted in the piece, others that are implication that get somewhat lost in the considerable detail. The first, as stressed by Sheila Bair and other observers, is that the reviews were never designed to succeed. This is something we and others pointed out; this was all an exercise in show. The OCC had entered into these consent orders in the first place with the aim of derailing the 50 state attorney general settlement negotiations. This was all intended to be diversionary, but to make it look like it had some teeth, borrowers who were foreclosed on in 2009 and 2010 who thought they were harmed were allowed to request a review. If harm was found, they could get as much as $15,000 plus their home back if they had suffered a wrongful foreclosure, or if they home had already been sold, $125,000 plus any equity in the home. Needless to say, the forms were written at the second grade college level, making them hard to answer. A whistleblower for Wells Fargo reported that of 10,000 letters, harm was found in none because the responses were interpreted in such a way as to deny harm (for instance, if the borrower did not provide dates of certain incidents, those details were omitted from the assessment).

But the results were even worse than that, hard as it is to believe. For instance, even though the OCC stipulated that the banks hire supposedly independent reviewers, they were firmly in control of the process. From the article, describing the process at Bank of America, where a regulatory advisory firm Promontory was supposed to be in charge:

Bank of America contractors were reviewing Bank of America loans at a Bank of America facility under the management of full-time Bank of America employees. They were reporting those results to Promontory, the outside independent consultant, whose employees started their reviews based on what Bank of America contractors had concluded.

As the auditor, Promontory had authority to overrule any conclusion drawn by a Bank of America contractor. Promontory has defended its work as independent from influence by Bank of America. But the Bank of America contractors said it was clear to them that what they noted during their reviews was integral to the process. They continued to do substantive, evaluative review work until a few months ago, they said, when they were told that their job going forward was simply to dig up documents for Promontory.

Of course, Promontory protests that it was in charge. It is hard to take that seriously when no one from Promontory was on premises. And the proof is that the Bank of America staff suppressed the provision of information:

Another contract employee recounted the time he noted in a file that he couldn’t find vital documents, such as notice supposedly sent to a homeowner that a foreclosure was pending. “Change your answer,” he said he was told on several occasions by his manager.

Second is that the OCC was changing the goalposts as the reviews were underway. But was that due to OCC waffling or pushback by the consultants acting in the interest of the banks to derail the process by making the results inconsistent over time? If you do the first month of reviews under one set of rules and then get significant changes in month two, that implies you have to revise or redo the work in month one. That serves the consultants just fine, their bills explode. And the banks get to bitch that the reviews are costing too much, which gives them (and the OCC) a pretext for shutting them down, which is prefect, since they were all intended to be a PR rather than a substantive exercise from the outset.

Consider this section:

From the the consultants’ point of view, it was the government regulators who had some explaining to do. First there was the constant change in guidance, throughout at least the first eight months of the process, as to what they wanted the auditors to do and how they wanted them to do it, they said. The back-and-forth was so constant, one of the consultants involved with the process said that specific guidelines for determining if a mortgage borrower had been harmed by certain kinds of foreclosure fraud still weren’t in place as late as November 2012.

Huh? Tell me how hard it is to determine harm. If a borrower was charged fees not permitted by statue or the loan documents, there was harm. If the fees were in excess of costs (not permitted) there was harm. If the fees were applied in the wrong order, there was harm. If a borrower was put into a mod, made the payments as required in the mod agreement, but they weren’t applied properly and they were foreclosed on despite following bank instructions, there was harm. Honestly, there are relatively few cases where there is ambiguity unless you are actively trying to throw a wrench in the process, and it is not hard to surmise that is exactly what was happening. That is not to say there might not have been ambiguity on the OCC side, but it is not hard to surmise that this was contractor/bank looking to create outs, not any real underlying problem of understanding harm v. not harm.

It looks that some of the costly process changes were also due to the consultants being caught out as being in cahoots with their clients rather than operating independently:

The role of the Bank of America contract employees did not change to simply doing support work for Promontory until near the end of last year. That happened after ProPublica reported that Promontory’s employees were checking over Bank of America’s work, rather than conducting a fully independent review.

Finally, the article mentions (but does not dwell on) the fact that there was considerable evidence of borrower harm:

The reviewer said she found some kind of bogus fee in every file she looked at, ranging from a few dollars to a few thousand dollars. Another who looked for errors that violated state statutes estimated that 30 to 40 percent of loan files contained mistakes.

One reviewer who provided a comment that we elevated into a post was far more specific:

…in one case I reviewed the borrower paid approximately 25K to reinstate his mortgage. Then he began to make his mortgage payments as agreed. Each time he made a payment the payment was sent back stating he had to be current for the bank to accept a payment. He made three payments and each time the response was the same. Each time he wrote and called stating he had sent in the $25K to reinstate the loan and had the canceled check to prove it. After several months the bank realized that they had put the 25K in the wrong account. At that time that notified him that they were crediting his account, but because of the delay in receiving the reinstatement funds into the proper account he owed them more interest on the monies, late fees for the payments that had been returned and not credited and he was again in default for failing to continue making his payment. The bank foreclosed when he refused to pay additional interest and late fees for the banks error. I was told that I shouldn’t show that as harm because he did quit making his payments. I refused to do that.

There was another instance when there was no evidence that the bank had properly published the notice of sale in the newspaper as required by law. The argument the bank made when it was listed as harm to the borrower was “here is the foreclosure sale deed, obviously we followed proper procedure, and you should change your answer as to harm.”

Often there is no evidence of a borrower being sent a proper notice of intent to accelerate the mortgage. When these issues are noted in a file we are told to ignore them and transfer those files to a “special team” set up to handle that kind of situation. You choose whatever meaning you like for that scenario.

To add insult to injury, the settlement fiasco was shut down abruptly without the OCC and the Fed coming with a method for compensating borrowers. So the records have been left in chaos. That pretty much guarantees that any payments will be token amounts spread across large number of borrowers, which insures that borrowers that suffered serious damage, such as the case cited above, where the bank effectively extorted an extra $25,000 from a borrower before foreclosing on him, will get a token payment, at most $8,000 but more likely around $2,000. Oh, and you can be sure that the banks will want a release from private claims as a condition of accepting payment. $2,000 for a release of liability is a screaming deal, and it was almost certainly the main objective of this exercise from the outset. Nicely played indeed.

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  1. pws

    “But even so, what actually took place was even worse than hardened cynics had imagined.”

    See, I like this phrase, because it’s going to describe almost everything that comes out of the American system for the next 30 years, if not longer.

    1. Tyzao

      maybe not, the system could spiral into chaos sooner than that, to the point where “imagination” is not even possible

      1. Nathanael

        It’s hard to predict the timing of system collapse, but I expect it to take MUCH less than 30 years. I was actually guessing 10.


      How can we expect the truth from Bank regulators that don’t hold found evidence as, wrongful actions, fraud, and abuse handed out by the mortgage server and then cover-up, like that of the FIFTH THRID BANK. The OCC and FED’S need to take action aganist this mortgage violator, rather than pass.
      Fifth Third Bank comitted many fraudulent acts on me.
      Without Prejudice,
      Robert L. Tatge
      Spicer, MN. 56288

  2. OMF

    Look, this thing is just too systemic and I’m having a hard time believeing that an old boys network alone explains all these settlements, deals, and tolerence of lawbreaking. Not just on this issue, but for the financial crisis in general.

    Are there enough revolving door jobs to even go around to persuade enough people to abandon ethics in their current positions? Cultural norms don’t cut it either. And I have a hard time believing that people with access to the evidence would be afraid of a much considering that they are the ones in a menacing position.

    There has to be money changing hands, at multiple levels. Money or equivilents. Look back on the present regulators of the financial system in 20 years time, and I suspect you will find an unusal amount of inexplicably wealthy retirees.

    1. steelhead23

      You are assuming that the motivation for corruption are always pecuniary. You should broaden your view. Yes, some corruption is purely self-interested. Typically not in the form of bribes – more often along the lines of..”when you’re ready to leave the government, be sure to send me your resume.” Innocuous as that sounds, it is a reward for being “nice.” But, my main point is that corruption can also be motivated by fear. As Yves would attest, this finance thingy is complex. It takes great skill to be an effective auditor, even more to be a forensic auditor. So, if you identify a problem, the culprit would argue that “its complicated”, “that’s how we’ve always done it”, or “you just don’t understand.” Until you’ve been lied to a few times (yes, Virginia, some liars wear pinstripes), you might tend to doubt yourself. Then there is the “don’t make waves” syndrome. Note how the auditor in that $25,000 arrears case above was encouraged to not show clear harm as harm because, well, the guy did miss some payments (even if it was the bank’s fault). Finally, let me say that the agency environment has a tendency to create (or destroy) agent ardor for truth-telling. If your boss got ahead by getting along, it won’t take you long to figure out how to climb that ladder. And dare I say it, Obama is corrupt as hell and it would take one hell of a man or woman to remain chaste in that environment. If we wish to have ethical governance, we will have to elect ethical men and women to run it.

      1. OMF

        I accepted your points right up until the moment that these people got their first paycheck. It’s possible to be sympathetic to people in fear of the powerful. It’s far more difficult to sympathise with people getting paid by the powerful to do their bidding.

        You cannot as a professional earn hundreds of thousands of dollars enabling illegal activity and then turn around and say it was because you were scared. I’m talking about accountants, auditors and lawyers here; the professionals being paid to make sure things are above board.

        If they had the barest mimimium of professional and personal standards, they would have at the very least walked away from this activity. Instead they stayed inside for years as things got worse and worse, and got paid handsomely for doing so. Being fearful or unsure or wanting to climb the ladder is a poor excuse for breaking the rules for profit.

        1. steelhead23

          I did not intend to suggest that fear motivated corruption is good behavior. Sin is sin, even if the temptress is beautiful. I am just saying that it isn’t just money that corrupts. Temptation is everywhere. And with ethical lapses at the top, the countervailing force to be ethical becomes quite weak. Oh, and Matt is also right, squeak enough to be heard and it won’t be merely your career that’s at risk.

        2. JTFaraday

          “I accepted your points right up until the moment that these people got their first paycheck… It’s far more difficult to sympathise with people getting paid by the powerful to do their bidding.”

          It seems to me that Americans are particularly given to the “I/they were just doing their job” excuse, because we all know what happens to people who lose their jobs/ end up unemployed. For some, this means ending up on the street, for others “mere career derailment,” but that’s also a thing unthinkable.

          It seems plain that a big part of the problem with our politicians is that they regard office seeking as just another career move, as opposed to the political task of representation that it is supposed to be.

          They act like they are “just doing their job” and their boss is not their constituents, or the majority of their constituents, but those who might award them the next gig in their career trajectory.

          The mentality is so formative of people’s consciousness and the habit so deeply ingrained that the potential for getting something else is not clear to me at all.

          Maybe this is just what government by a nation of job seekers looks like.

          1. Carla

            “I was just doing my job.”

            Okay. So nobody on this thread has ever heard of the Nazis?


          2. DolleyMadison

            Exactly – try living in Bank of America land where the whole town is directly or indirectly employed by a bank. When I filed a bar complaint against attorney for knowing filing a demonstrably false pleading, for creating a debit card with my acct. number, for uttering a false document, for communicating threats, for appointing a substitute trustee firm that was nothing but a rented mailbox, etc they refused to act and accused me of “trying to ruin a good man”! This same “good man” has since forged dozens of AOM and committed forgery to steal homes and even RAN FOR JUDGE. Thank God he lost….

      2. Tyzao

        I believe the issue is more related to the precedent that would be established by a finding against the bank rather than just money changing hands. Bank of America knows they are guilty on so many levels that their liability is well beyond their value. They are employing the same tactics which got them into this mess, in order to get them out, but they are sowing their own seeds of despair. If they had all just come clean back in 2008 or 2009, we could have already been mostly out of this mess — but Oh what a tangled web we weave when first we practice to deceive — they will get caught in their own snares eventually.

  3. Leave it to Alaric

    This goes beyond corruption and into anarchy. When forcible mass displacement and land seizure was carried out by Huns, Visigoths, and Vandals, observers understood that they were seeing collapse and not transparency problems. The hard-wired confiscation systems of lawless banks are no different. This state has failed.

    1. just me

      I don’t know why they limited themselves to drug cases:

      ELIOT SPITZER: And it just strikes me that the next time an assistant United States Attorney is in front of a jury with some poor shlub who’s caught with some low level amount of drugs, the defense lawyer should stand up and utter the letters “H S B C.”

      MATT TAIBBI: Right.

      ELIOT SPITZER: They let them off, and they’re sending this poor guy to jail? Where’s the equity? Where’s the sense of justice in this?

      MATT TAIBBI: Right. Because if the law doesn’t apply equally to everybody, then you don’t really have a system of law, and so you have a built-in defense for everybody in every drug case forever. I mean, if you get caught with a stem of marijuana, how do you not stand up and say, “You’re going to send me to jail for this, where a guy who laundered a billion dollars for a bunch of murderers gets nothing?”

      1. dolleymadison

        HSBC continues to try to illegally FC on me when I did not miss a payment, they do not appear on my Deed of Trust or on my note, and have absolutley no documentation proving ownership or agency save a bogus assignment from Ocwen to HSBC filed days before the FC filing – Ocwen also has no evidence of ownership or agency, claiming the original lender – bankrupt for 5 years – assigned to them in 2012. Yet even when caught red handed they were allowed to appeal and their attorney even RAN FOR JUDGE and nearly won. In addition, they have FC on numerous folks since my case with NO paperwork in the files – not even a COPY of the note. While the Registar of Deeds and the Clerk of Courts LITERALLy rubber stamps these foreclosures for this contemptible money-laudering terrorist financing cabal. Dispicable.

      2. sierra7

        RE: Eliot Spitzer…
        And now, due to the sale of Current TV, Eliot Spitzer is no longer on “major” media.
        His program, “Viewpoint” was pretty good considering the dearth of individuals in the position of “talking head” who hold his credentials.
        C’mon back, Spitzer!!

  4. Westcoastliberal

    This crap won’t stop until, like Howard Beale in “Network” we all open our windows and shout out “I’m mad as hell, and I’m not going to take this anymore”!
    Everything since (and including) 9/11 has been set-up to thwart our freedoms and steal our net worth.
    Contrast for a moment the “before/after” across the board and you’ll get the picture.

    1. metsuke

      It won’t even stop then. The Feds are not afraid of people who bitch on blogs; they’re afraid of entities like OWS and Aaron Schwartz who put deeds first.

  5. Leviathan

    As someone who got foreclosed on in the specified time period I hardly know whether to laugh or cry at this point.

    I have only one question: where is the lawyer/legal team willing to mount a class action suit on behalf of all homeowners (not just those who lost their homes) who overpaid because of the (unprosecuted) fraud of the last decade, who overpaid because of Liebor being manipulated, and who actually hoped their government might fix the problems rather than making it worse?

    Lots of folks will be getting 2k in the mail. It ain’t gonna buy them a house, but how about a lawsuit?

    1. just me

      Lots of folks were supposed to get about $2K* in the mail from the 49 AG mortgage settlement. Did any? I thought the states grabbed the money to help with their budgets, and that they also specifically precluded the money from helping damaged/distressed homeowners get legal aid. (California? Yes?)

      * Yves Smith, Thursday, February 9, 2012
      The Top Twelve Reasons Why You Should Hate the Mortgage Settlement

      1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan.

      Did anybody get $2000 per loan?

      Just asking.

      1. sierra7

        And, if receiving that $2,000 (or whatever amount) wouldn’t the “quit gag order” be enforced? Making the “promise” to absolve the payer of any “wrongdoing”? (simply put)

        1. Leviathan

          Did anyone get the money? Great question. I haven’t seen any intrepid reporter’s heartwarming story about a family brought back from the brink of penury by a couple grand. Given what a poor job they did finding foreclosees to even file their bogus paperwork, I’d love to hear how they’re going to get checks to them. New owners and squatters should have a field day!

          Some states ate the money, some put it into cryptic community organizations (well connected no doubt). OK I heard was giving people around 20k apiece, but then they didn’t go along with the other 49 states, did they.

          The key concept is no accountability, for anything.

          I would argue that a fair remedy would have entailed lawyers looking over each individual case, and whatever bs waiver they might have you sign to get this check, it would not alter that simple fact. Or I would simply argue that the fact someone is offering recompense is evidence that harm is being acknowledged. Then I would reject the crumbs and go for the full loaf.


      Fifth Third Bank
      Kevin T. Kabat, President & CEO Fax 513-358-3493 Madisonville Operations Center
      Cincinnati, OH. 45263
      Dear President Mr. Kabat:

      RE: Mortgage Loan: 404876203 Three situations occurred during the Foreclosure process that I believe were important, illegal and unfairly place on me, therefore to consider this Foreclosure invalid.
      * Forced Placed Hazard Insurances, $500.00 per month.
      * Mortgage Broker manipulation of appraisal, loan application, and my credit. * Conflicting and imbeciles’ amount stated on the Foreclosure Notices.
      Gentlemen, I’m writing this letter to explain to you some of the discrepancy during the Foreclosure process that I had to go through. There are three that really brought the Foreclosure to a head. The one that actually broke my back was the Forced Placed Hazard Insurances, $500.00 more a month when I was living on pay-check to pay-check. The additional charge forced me to cash in stock and part of my 401K retirement plan, paying the extra taxes that went along with the process. After paying many months with the addition charges, I started to lose ground. Until recently I knew, I had insurance since the original mortgage with Country-wide Home Loans, and it was required for the loan with Fifth Third Bank. Just lately, I was with my Lawyer, we called, Pioneer Heritage Insurance, PO Box 716, Spicer, MN. 56288, phone# (320) 796-2169. Gentlemen, they stated I had continued and uninterrupted insurance on the property and they fax over the proof: Exhibit” A”. The reason this was wrong, was that I had insurance and Fifth Third Bank paid for it out of my Escrow every year since origination of the Home Loan Mortgage, Fifth Third Bank approved for me.
      My original home mortgage loan made by FIFTH THIRD BANK was signed by me, Robert L. Tatge (a single person) on January 4, 2008 for $310,000.00 @ 6.375% for 30years on a refinanced loan made prior with COUNTRY-WIDE HOME LOANS back on JUNE 12, 2002, for $178,817.91 @ 7% for 30 years.
      The second problem that throws up a red flag is the mortgage broker that put the loan application together for our approvals. I’m not sure of his name, and you probably could help me out with that. He said, He could improve my credit, and I could take cash out, that was very cheap money, because of the high equity I had in my home. This was highly suspicious, not taking into consideration my age or ability to pay the extra money back. Now that I look back, he found and new ways to derive benefit by manipulation. My home was built year 1975: (The TRUTH 1900). Appraisal manipulation, to my understanding this broker wasn’t satisfied with the first appraisal from: Forsythe Appraisals, LLC, 54 28th avenue North, St. Cloud, MN. 56303 Phone 320-259-8958 He asked the appraiser to treat the property like it was on Lake Minnetonka, so the second time it came in at $420,000. It satisfied the loan guidelines. Then he sent me two checks, one he asked if I would destroy, I did, the other I cashed:
      Exhibit “B,” (He said, he had other companies,) that’s why the check was drawn on: MJC ENTERPRISES LLC, 5115 EXCELSIOR BLVD., SUITE 422, SAINT LOUIS PARK, MN 55416
      This was unfair because my property tax statements for years 2007 through 2009 stated: MARKET VALUE ESTIMATED $324,700 IN 2007/2008 which is $95,300 less than appraisal. The second property tax statement for years 2008/2009 which is $92,000 less than appraisal.
      I ask for a modification JUNE, 2009 and was denied because of insufficient income; I keep up my requests and hired a lawyer, Avi Liss, Liss Law, LLC., Hereford Street, Boston, MA, 02115 (W) phone 617-778-0363 Finely brought me a modification on August 1, 2009 (lawyer said it was the Best he could do!) Loan Amount $327,410.93 @ 5.375% for 40 years, graduated principal by $17,410, lowered interest by 1%, making the pay off difference before the modification the principal was $310,000,00 interest $386,238.81 = $696,238.81… New Modified Mortgage 40 years, principal $327,410.93, interest $489,836.12 = $817,247,247.05… The difference of $121,008.24 it was Unaffordable, I signed it at the Lawyers suggestion. Beginning with the payment due 08/01/2009 monthly Including escrow were $2,135.51 Knowing this modification wasn’t something I could afford , I asked for HELP, A FORBEARENCE PLAN was offered: Exhibit “C,”: The “Forbearance Plan” offered: The due dates were set-up all wrong.
      The third misrepresentation and final stress, on all FORECLOSURE NOTICE’S sent out by the Lawyers representing Fifth third BANK: Usset, Weingarden & Liebo, PLLP, 4500 PARK GLEN RD, #300, MINNEAPOLIS, MN 55416, PHONE 952-925-6888, Knowingly this is information sent to the lawyers from Fifth Third Bank, mislead the mortgagee.
      Exhibit “D,” Multiple & Conflicting Dollars amounts in Default on “Foreclosure notice” making it impossible for Mortgagee to understand what they meant and get help if needed.
      #1: March 9, 2009 $12,880.19
      #2: March 9, 2009 $15,276.19
      Exhibit “E:” Multiple & Conflicting Dollars amounts in Default on “Foreclosure notice” making it impossible for Mortgagee to understand what they meant and get help if needed.
      #1: March 22, 2011 Fifth Third Bank said I owed $2,365.80 to reinstate mortgage.
      #2: March 22, 2011 Fifth Third Bank said I owed $3,874.40 to reinstate mortgage.
      #3: March 22, 2011 Fifth Third Bank said I owed $35,100.90 to reinstate mortgage.
      I had a 3 Hernia Operation on August 5, 2011 @ the VA Hospital in Minneapolis, MN.
      I had to stay in the hospital because I was on a Vac healing machine that restricted my staying in the hospital and their rules. Outside contact was difficult. I still have a home health nurse that comes to my home every Wednesday until Mid-April. Fifth Third Bank knew of my operation and still proceeded with the foreclosure by having the sheriff’s Sale on Nov 16, 2011.
      The information the broker collected was suspicious, wrong, and different, I realize now. Forced Hazard Insurance should been follow-up at enforcement. And I just do not understand the lesser amounts to reinstate the mortgage, it was confusing on the Foreclosure Notices and made it impossible to redeem, also difficult to sell.
      Discussion: When my dream home was foreclosed on, my heart was broken. I try my best with circumstances beyond my control. I hope you would look into this matter. I still care for this home. I’m writing because the Office of the Comptroller of the Currency (OCC) recommends that I should attempt to resolve my complaint with FIFTH THIRD BANK first.
      Without prejudice

      Mr. Robert L. Tatge March 27, 2012
      Cc: Usset, Weingarden &Liebo, PLLP, Attn; Amy Van Zummeren @ FAX: 952-925-5879
      Cc: Independent Foreclosure Review (occ), (Letter) PO BOX 2587, Fairbault, MN 55021-9981
      Attn: Paul-Allen Bixler, Regulatory Support Specialist Office of the President: Fax 513-358-3493

      Cc: Office of Minnesota Attorney General, Lori Swanson, Honorable: Bill Gosiger, File: 439011, FAX 651.282.2155
      Cc: Jerome A. Ritter Attorney at Law, FAX: 651-222-1263


        Where are the LAWYERS THAT KNOW WRONG DOING?, AND DO SOMETHING ABOUT IT…Payments to borrowers who lost their homes to foreclosure
        The deadline to make your claim is January 18, 2013

        The National Mortgage Settlement Administrator mailed Notice Letters and Claim Forms in late September through early October 2012 to those borrowers who lost their home due to foreclosure between January 1, 2008 and December 31 2011 and whose loans were serviced by one of the five mortgage servicers that are parties to the settlement.

        You can now access the secure claim filing site where you can submit your Claim Form.

        You must have your personalized claimant ID number, which is located on the Notice Letter and Claim Form you received, to submit your Claim Form online.


        Federal Government & Attorneys General reach landmark settlement with major banks

        Roughly $25 billion in relief for distressed borrowers, states and federal government…

        In February 2012, 49 state attorneys general and the federal government announced a historic joint state-federal settlement with the country’s five largest mortgage servicers:
        •Bank of America
        •JPMorgan Chase
        •Wells Fargo

        The settlement provides as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government. It’s the largest multistate settlement since the Tobacco Settlement in 1998.

        The agreement settles state and federal investigations finding that the country’s five largest mortgage servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these practices violate the law. The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.
        PLEASE don’t through up your hands and let FIFTH THIRD BANK get bye this WRONGFUL FRAUD PRATICES, THEY DID SO MANY WRONG.

  6. 2little2late

    I met all the criteria and more for foreclosure rescission with a $125K settlement, having supplied multiple examples of incontrovertible fraud. Actually, it was downright Theft by Modification.

    I’ve been awaiting the decision for nearly two years, having received two notices from the OCC that my file was being reviewed during that period. However, with these new developments, instead of being able to move somewhat gracefully into our senior years after losing our home to the cartel, I’ll instead tackle the job of re-duct taping the entrance flap to the drafty camper my wife and I are living in, all thanks to the generous $875 payout.

    Thanks OCC.

  7. LucyLulu

    As mentioned above, with reports of 3.8 million borrowers to receive checks, and splitting $3.3 billion, that averages out to a little under $870/homeowner.

    But if they nixed all the reviews, and the reviews were flawed anyways, how on earth will they decide who gets what amount of money?

  8. LucyLulu

    And last I read, only 425,000 had submitted claims. Presumably, a large number of the 3.8 million won’t be able to be tracked down (though if they search IRS and W-2 databases, that would help find many). What will happen to the funds designated to go to homeowners unable to be located? The state “unclaimed money” sites?

    1. Yves Smith Post author

      We’ll be having more on this, but my understanding is the banks looked only to their own records. So if they did not have a forwarding address for the borrower (yes I am not making that up, why would a foreclosed borrower leave a forwarding address with a bank that turfed them out), they didn’t go further.

  9. MIWill

    Stockholm syndrome

    Maybe I shouldn’t want a house…people are helping me with this..and they’re so smart…

  10. EMR

    want to here a story, how about mine!!!!, HSBC did the following, in this order,
    1. Filed lis pendes with the court december 2008
    2. Jan, 2009 served us notice of foreclosure
    3. June 2009 file with court the legal document saying authorizing the home to be foreclosed, which should have been #1
    4. to make the story worse, the signature on the document file in June 2009, authorizing the home to be foreclosure, while it came last, (June of 09), and should have been the first step, the person signing this authorization, was the same person who notarized this document!!!!! The signature were undoubtly, the same. Ray charles could have seen this and stevey would not had to Wonder!!!!!!,


  11. scraping_by

    Random thought.

    If, instead of private Promontory, it was some government set up, say a temp pool run by the OCC or HUD, or whoever, would these reviews fall under the FOIA laws?

    Anyone directly involved, dripping with money to throw around, might go court and serve subpoenas. Class action, if need be. But still, this is another act of information control. We’re depending on whistle-blowers to learn the awful truth.

    Heartening, but not efficient.

  12. matt weidner


    You see, that $100,000 homeowner foreclosure judgment loaded up with $2,500 in bogus fees does not begin and end with the homeowner….remember, the 49 State AG settlement was a False Claims case…..the servicers were inflating bogus fees, then passing those false insurance claims on to their insurors and to agencies and adjuncts of the federal government…(google “OIG AUDIT REPORTS GMAC/WELLS FARGO”) read what the federal government found about the claims.

  13. joe

    The united states government really thinks this Foreclosure fraud stuff is a joke.Any money recovered from the banks was used to line their pockets. I really think we need another country to intervene here so they can really see the abuse we are getting from these banks ,servicers and the united states shit government. Every settlement they get they just keep on taking it for themselves.Then we have these judges that received campaign funds from these banks just like Obama did. Plus they are throwing families on the street with forged documents this is chaos. Let’s talk about the settlements again I think there we’re three a $26 billion dollar settlement then there was a money settlement with the occ now another $8.5 billion settlement not one cent to any Foreclosure victims including me. Every settlement is used to line their pockets. Wow we can’t even trust our great government .

  14. Old Soul

    I really like the part that the fraudclosure entities are allowed to credit themselves with loan modifications as the larger portion of the “settlement.” They have already had HAMP incentives for this. How many incentives do they get to claim for modifications? The people who lost their homes upon forged documents get a smaller portion of the “settlement” funds allocated to them than the amount negotiated as a second credit for modifications (or third credit for modifications if the entity was covered by the 49 State AG “settlement”.) The one thing that can be trusted in the current government approach to financial fraud is that the financial institutions will not only be protected from their crimes, but will profit from them.

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