WSJ | Foreclosure Talks Snag on Bank Liability

Foreclosure Talks Snag on Bank Liability

Efforts to reach a settlement that would end the long-running probe of foreclosure practices are snagged over whether banks will get broad legal immunity from state officials for mortgage-related claims.

Federal and state officials are seeking penalties of $20 billion to $25 billion from Bank of America Corp., J.P. Morgan Chase & Co. and other financial firms under investigation since last fall. The banks are pushing hard for a deal, but they have insisted on a wide-ranging legal release from state attorneys general.

“They wanted to be released from everything, including original sin,” said a U.S. official involved in the discussions. The legal protection sought by the banks included loan origination; securitization and servicing practices; fair-lending procedures; and their use of the Mortgage Electronic Registration Systems, an industry-owned loan registry that often acts as an agent for owners of mortgage loans, people familiar with the discussions said.

“The reason the banks would settle or pay anywhere near $20 billion to $25 billion is to get this behind them,” said one person familiar with the banks’ thinking. “There’s no reason the banks would pay that amount of money and leave their flank exposed.”

U.S. and state officials dismissed the push for broad immunity as a “nonstarter,” according to a federal official involved in the talks, but they have countered with a narrower offer. It would cover robo-signing and other servicer-related conduct but leave banks open to potential legal action for wrongdoing in fair lending and securitization, according to people familiar with the situation. Attorneys general in California, Delaware, Massachusetts and New York have said they are investigating mortgage-securitization practices.

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7 Responses to “WSJ | Foreclosure Talks Snag on Bank Liability”
  1. They need to all go to jail not pay sanctions. All their money plus should go to pay full restution to the victims. Talking with the crooks is unacceptable. Put hand cuffs on them. There are banks that will take over the banking industry. Smaller banks.

  2. Bill McAuliffe says:

    I’m in total agreement with Jim. ANY ordinary citizen who commited acts of fraud and deceipt would be imprisoned and fined HEAVILY. Being one of the Country’s Largest Fiduciary Institutions, any of these Big banks should suffer every consequence afforded by the Law. Some people, (More so than myself) have suffered tremendously with anxiety, depression, physical and other hardships. I hope these Big Dogs have enjoyed their Leer Jets, 4 Homes, yachts; what have you, but now is the time for “Our” compensation. Any fines should impose daily compunded interest as well, just like their customers. And late fees? HA! (Retroactive)

  3. Readdocs says:

    If the feds or state AGs think they are going get billions out of Bank Of America, they need
    to look at the graph over at Market Ticker. The last posting showed their stock at 6.62 per share
    and dropping like a rock. Be sure to read Kents posting on what is happening.

    • lvent says:

      Readdocs, On paper they are bankrupt. They rang America up with 40 trillion in debt backed by 8 trillion in real estate..They stole all of the wealth out of America in the intentional stock market collapse and hid it all in overseas bankster accounts. The U.S Government should freeze their assets like they did to Kadaffi. These Wall Street crooks and their Globalist owners, are Kadaffi on steroids. They are just a hell of lot sneakier and more deceptive. I heard a report on the news a few months ago that Goldman Sachs “lost” a ton of Kadaffi’s money in some investment scam and they offered for him to be a shareholder in their company because they felt so bad about it.. They all need to be held accountable for what they have done to the world’s economy and be forced to return everything they stole from the people in the biggest Ponzi Scheme Swindle and Heist of our wealth in history by the diabolical and maniacal ruling elite, and all of their cohorts and minions..

  4. Jim Bethea says:

    There should be NO SETTLEMENT ~ easy payoff and easy escape for these crooks…………..

    I think each victim should be refunded all mortgage monies with interest plus any damages and court costs…

    These banksters want the courts to treat their many years of fraud, which is being exposed more and more with every passing day, to be referred to as “irregularities in documentation” ?????

    Well, what do we call the ramifications their fraud has caused for millions of people? What classification do you file the ones that just could not take the pressures anymore and ended their agony in suicides? How do you describe the situation where the man had set fire to his own house and when he came out of the house to face the sheriff’s eviction and one of the deputies shot this unarmed man 7 times??? SEVEN TIMES ~ UNARMED

    What file do we file that many years of credit damages that these crooks have caused the people to be forced to pay 2 and 3 times higher interest rates?? i.e. = just the difference between passing credit and excellent credit in 2004 – based on a $175K home loan had a $140K variance ~~

    FRAUD IS FRAUD IS FRAUD ~ The US Supreme Court has ruled many times that fraud should be treated as fraud wherever it is found ~~~ NO POLITICS ~ NO SETTLEMENTS

    • Fury says:

      defrauded homeowners should get back the money that they put into their homes plus damages
      as well as the ill-gotten gains that were made by securitizing and selling our loans numerous times.

      it should not be a blanket “settlement.”

      the money is there to pay us back, despite the fallen stock price or their lame boo-hooing.
      it is in off-shore accounts, most likely the Cayman Islands.

      • lvent says:

        Fury, I could not agree more. I spoke with an attorney today who asked me what I wanted to accomplish. I told him I will accept no less than a full loan recission. He told me that if these banks can’t fraudclose because you force discovery on them, the judges are going to push for principle reductions of half. It is obvious what their evil owners want is a nation of renters who will never be able to pay off these homes. No recission after what I now know is unacceptable and I would rather bulldoze it after the hell they put my family through than pay another dime to these crooks who set America up to fail.. . They rang America up with 40 trillion in speculated debt and there is 8 million in real estate to back that up. They are bankrupt and just want to keep their Ponzi Scheme going and keep gambling off of some more new debt they create off of these underwater homes and they can all go to hell. I for one, refuse to pay for any more of their fraud or unsustainable debt creation.

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