Adam Levitin | Foreclosure Fraud Settlement: The Empire Strikes Back (or Why Are Republicans So Obsessed with Backdoor Cramdown?)

I don’t know what these people are complaining about. The 27 page “term sheet” is mostly made up of existing laws that the servicers are asked to adhere to with no “or else” clauses.

As for the monetary penalties, 20 or 30 billion is NOTHING compared to the TRILLIONS that they stole. How bout we apply the money to fund an army of legal aid attorneys to defend the “deadbeats” against these predators. If they have the legal ability to foreclose, and did everything THE WAY IT SHOULD HAVE BEEN DONE IN THE FIRST PLACE, then there shouldn’t be a problem getting the house repossessed, right?

But that may be to much to ask since they have already polluted our courts beyond belief…

Foreclosure Fraud Settlement: The Empire Strikes Back (or Why Are Republicans So Obsessed with Backdoor Cramdown?)

posted by Adam Levitin

It’s not surprising to see the banks and their supporters on the Hill pushing back on the proposed Foreclosure Fraud settlement term sheet. (See here and here and here).  There seem to be three major lines coming out of the banks:

(1) It’s “backdoor cramdown,” and the agencies shouldn’t be pursuing a policy rejected by Congress.

Thus, House Republicans wrote to Treasury Secretary Geithner that “The settlement agreement not only legislates new standards and practices for the servicing industry, it also resuscitates programs and policies [namely bankruptcy cramdown] that have not worked or that Congress has explicitly rejected.”  These House Republicans want to know:  “What specific legal authority grants federal and state regulators and agencies the power to require mortgage principal reductions when the House and Senate have voted down such proposals?”  .  Similarly a coterie of bank-friendly pundits chimed in calling this sub rosa cramdown.

(2) CFPB has no business being involved given that it doesn’t have a director.

This has to be read between the lines as a thinly veiled Elizabeth Warren witch hunt.  At least one commentator was upfront about that in the American Banker.

(3) The settlement could negatively affect the safety and soundness of the banks.

Let me address all of these points.  There’s a lot of willful confusion about this term sheet and what it is.

Check out his response here…

House Republican Letter below…

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4closureFraud.org

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House Republican Letter to Timmay Geithner RE 27 Page Servicing Term Sheet

Comments
9 Responses to “Adam Levitin | Foreclosure Fraud Settlement: The Empire Strikes Back (or Why Are Republicans So Obsessed with Backdoor Cramdown?)”
  1. internetasker says:

    These blogs are a good place to be; thank you for all the enlightenment. A question:
    What about Mortgage Fraud. the point where homes were actually taken.

    Of course foreclosure is an extremely important arena but does anyone see it as downstream from the really traumatic and traumatizing events – the takings across the local loan desk?

    Is the looking under the lamp-post phenomenon acting to some extent here? Things are more visible but the lost item is elsewhere,

  2. pamelag says:

    here come the banks and they are not using tanks. GOD BLESS AMERICA

  3. Katheryn says:

    The letter is to the Honorable Geithner. He does not deserve “Honorable” before his name.

  4. John says:

    Stanley,

    After a while with it sitting there as you let everyone know the title is screwed up, you through a friend can offer to rent it for 1/4 or less a month. Don’t have to pay homeowners insurance just occupants or renters insurance at 1/8 the cost and no taxes or upkeep either. Heck, if it sits long enough, they may even cut the grass for you!

    Keep your spirits up and make a silk purse out of a sows ear!

  5. Bust them! says:

  6. RCL says:

    GREAT…. but not signature. Who can we write to if there are no signatures on this document???

    Can you provide the names of those who signed this???

  7. How come they foreclose upon me and want the full amount but when they get my houses and put them on the marker 60 to $100 k is knocked off?
    Stanley Putra
    Racine WI

  8. l vent says:

    So, the criminal enablers, are worrying about a mortgage bankrupcy cramdown hurting the banks? PUHLEASE!!! They are all a bunch of treasonists. Offf with their heads.

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