Mortgage Servicers Threatened With Litigation by U.S. States If Talks Fail

Mortgage Servicers Threatened With Litigation by U.S. States If Talks Fail

The five largest U.S. mortgage servicers negotiating with state attorneys general over foreclosure practices would be sued if a settlement isn’t reached, two of the state officials leading the talks said.

Illinois Attorney General Lisa Madigan and North Carolina Attorney General Roy Cooper threatened litigation if settlement talks with the companies, including Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM), break down.

“If we don’t get an agreement, we’re prepared to go to court,” Cooper told homeowner advocates at a meeting of state attorneys general in Chicago yesterday.

Check out the rest here…


13 Responses to “Mortgage Servicers Threatened With Litigation by U.S. States If Talks Fail”
  1. Marvin Keith says:

    Foreclosure is a Dark Ages, meat-axe approach to debt collection. Compared to causing the death of someone else which has a wide range of accusation from guilty of premeditated murder to not guilty by insanity for the criminal case and fhrough a similar large range of causing unintentional death. Each particular case is argued by a defense attorney until a conviction or dismissal is obtained. In the case of a Mortgage Contract there is no trial. Foreclosure,with its primitive, cruel and devastating result to the family, the community and the culture, includes mostly and often only innocent victims. In earlier times the victim of the mortgage non-payment was the bank with its historical connections to the politically powerful. In today’s securitized world where the banks sell off risk along with mortgage payment streams to sophisticated investors who were warned in advance about the high likelyhood of default by the lower tier borrowers (which is why a higher interest rate was paid to induce the investor to invest, not to lend). Lending carries far less risk than investing when the quality of the payment source is disclosed to the investor as even probably being in default at the time of the securitzation. Logically, what just solution does this dilemma require? Who should suffer, the homeowner exercising an age old desire to have a secure place to raise a family and to retire in old age? Or should it be someone with excess funds looking for profits and knowing the risks as spelled out in the Prospectus of the Trust, chooses the greater risk for the greater profit and loses it all, no differently than by going to a gambling casino. That pension funds and municipalities were attracted to this honeypot of money is of no import. Where rating agencies committed fraud the courts will decide who loses. But in the case of home owners, they were and are pigeons ripe for easy harvest as long as the foreclosure laws of tody remain on the books and economic crises around the world can effect the income stream, pension, and home equity of anyone.

    • Marvin Keith says:

      So I will reply to my own post with a proposed solution. Let there be a trial of each borrower to determine their guilt in causing a failure to pay. In the Pooling and Servicing Agreement (PSA) which governs each securitization there often is a paragraph which directs that foreclosure be reserved for only the most arbitrary failures to pay but otherwise to work out something less devastating to the homeowner. Where it could be shown that the homeowner was a participant in his apparent default he could be assesed a fraction of his regular payment consistent with his culpability. In general homeowners would stay in their homes. Lenders and servicers would be required to reimburse homeowners for their proportionate share of the blame for their part as creators of the securitization mess. This reimbursement would be in a form that would return the borrower to a condition of income production via training, investment, or the like. Lawyers would be employed at rates much closer to the minimum wage to represent the trusts, servicer, and lenders and at rates much closer to the pay of teachers or plumbers if they represent homeowners. Houses in default that are investment properties would not be eligible for this treatment but would follw the usual foreclosure process. The overall result of my proposal would be a significant reduction in homes on the market, most people staying in their homes buying more stuff and improving the economy, and a Judiciary branch of the government dispensing Justice for a change rather than grief. In the present situationthere is no Justice, the miscreants escape completely, and we are much worse off.

  2. Jason Werner says:

    Litigation is not going to do any good, it already has not. The criminals must be stopped immediately.

  3. This is just a show to peace us all, but people are getting smarter and waking up..

  4. Jim Bethea says:

    SETTLEMENT HELL NO ~~~~ These crooks have been willingly & knowingly promoting & profitting from their “constructive fraud” ~~ “deceptive practices” ~~ “endorsement forgeries” ~~ and on and on…..

    When the media mentions that Citi, Chase, Bank of Am, Wells Fargo, etc is forced to pay $ 2 / 3 /4 hundred millions in fines, it seems like a big deal penatly, but in fact the sums relate to a couple of days “take” on their credit cards & bank fees. SLAP-ON-THE-WRIST and back to business as usual………NO SETTLEMETN….REVOKE THEIR BANKING LICENSE …..BLOCK THEM FROM PURCHASING ANOTHER BANK TO CONTINUE THEIR FRAUD UNDER A DIFFERENT NAME….

    THE EXECUTIVES SHOULD PAY WITH JAIL TIME …..Did anyone see Wall Street???? They go to jail on TV; why not jail in the real world???????????

    The US Supreme Court has ruled many times that “fraud is fraud ~ no matter where you find it”………

  5. l vent says:

    WOW, It is high time Illinois got loud. Lisa Madigan, sue them now, ask questions later. The fraud is everywhere in the public recordings. THE AG’s NEED TO AN AUDIT OF THESE PUBLIC RECORDINGS!!!!! I WILL GLADLY HELP!!!!.

  6. Bust them! says:

    Can we sue and/or file criminal charges against the individuals instead of their employers? That is to say bank employees versus the banks? Do these thugs have corporate shielding or something? What about class actions?

  7. FEDUP says:

    Can a citizen charge them? Is that legal? Why can’t a bunch of us file criminal charges against JP Morgan Chase, Bank of America, Citigroup, etc.? Because we apparently can’t rely on any government agencies or regulatory offices to actually pusue some criminal charges and ask for them to do some jail time. I want to know if I can stroll over to the court house and slap them with criminal charges. We’ve filed civil suits, joined class action suits, and sent letters to the AG’s and County Records Clerks, made complaints to the OCC, and yet not one Bankster has been led away in handcuffs or done a night in jail. Why not us? I’m not venting, I’m preparing my case. If Chase or any of the other Banksters suddenly got millions of criminal charges made against them, that might actually land one of them in jail, where they belong, instead of them not admitting anything and buying their way out of crap. Legal system is actually illegal system.



  8. Wayne Moon says:

    What kind of an agreement with the states AG’s is going to help the homeowners, or actually curb the servicers (LIARS) current practices? It doesn’t matter what the AG’s do. All this means is money for the state coffers. Nothing will trickle down to the homeowner, regardless of the servicers BS commitments to modification. It is all smoke. We must go after these bastards ourselves…All of them!

    • ben franklin says:

      Wayne you are so R I G H T !!! All this crap about how they are investigating this and that…..its all smoke. They investigated, found tons of fraud and now what???? Jail??? Hell No….I say find out where these banksters live and post their addresses online.. and let the angry homeless people have them. Maybe it would send out the message eh? By the way, thank u so much for the Obama making homes affordable hahahahahahahaa……..more smoke! I have a son in Afghanistan clearing IEDs off the roads up north… this the gov and America he is defending? Its nice the gov is making the banks pay….pay who?
      them of course…..what about to the people for the people……Our forefathers are rolling around in their graves….grrrrr I better stop now

  9. leapfrog says:

    Attention Roy Cooper: We the people don’t give a “fig” about “talking”. File a criminal lawsuit ALREADY. And don’t sell us out like Tom Miller did.

    • Readdocs says:

      The banks involved in this fraud cannot fix what they’ve broken through appeasing the state AGs.
      This must be investigated and prosecuted. Then the hard work of repairing the unimaginable damage
      they have done to the nation and the citizens must begin.
      It’s hard to wrap ones’ head around when it’s been noted that in one state alone it will take 67 years
      to repair what has been done to that one state,

Leave a Reply