Naked Capitalism | 50 State Attorney General Effort to Sell Out to Banks Makes Even More Egregious Offer

50 State Attorney General Effort to Sell Out to Banks Makes Even More Egregious Offer

The so-called 50 state attorney general mortgage settlement negotiations (a bit of a misnomer, since at least 4 attorneys general appear to be out, and various Federal banking regulators are alos party to the deal) are looking more and more like a desperate effort to reach any kind of a deal so as to save the officialdom’s face. The only good news is the banks are so insistent on total victory that despite the efforts to pretend the talks are making progress, the odds of a deal being consummated still look remote.

It is nevertheless frustrating to continue to see the media depict the flailing about by the attorneys general headed by Tom Miller as progress. I’ve been involved in negotiations for much of my career, and I’ve never seen so much incompetence on open display. The Financial Times headline, “US banks offered deal over lawsuit” is substantively misleading. You can’t credibly put forward a proposal unless your side has signed off on it. Yet he has just made an offer that his own side may not support. And this isn’t the first time Miller has pulled this trick.

Per the Financial Times:

According to five people with direct knowledge of the discussions, state prosecutors have proposed settlement language in the “robosigning” case that also might release the companies from legal liability for wrongful securitisation practices.

Some state officials have expressed concern that they have offered the banks far too broad a release from liability. Others say the broad language was perhaps inadvertently crafted and will be tightened as negotiations continue. Participants on both sides stressed the talks remain fluid.

The article later gives more of the substance of the proposed release, and it isn’t hard to see why some attorneys general have reservations:

The worry over the states’ counterproposal stems from its treatment of loan documents. The term sheet proposes to release the banks from legal liability over how mortgage documents were maintained, prepared and transferred, people familiar with the matter said.

Though the counteroffer attempts to release the banks from liability with respect to home repossessions, and explicitly states that the release does not include securitisation claims, the language is broad enough in that it could prevent state officials from bringing securitisation claims in the future should they sign up to the agreement.

At the heart of securitisation claims, which involve missteps in how home mortgages were bundled into bonds, are allegations that the banks did not properly maintain and transfer documents from one step in the complicated chain to the next.

Be sure to check out the rest of the details here…


6 Responses to “Naked Capitalism | 50 State Attorney General Effort to Sell Out to Banks Makes Even More Egregious Offer”
  1. Granicus says:

    What about mortgagors who have paid to these fraudsters and no longer have clear title on their homes? How does anyone know if a loan is paid off by the right party? MERS has no chain of title repository. They only allowed Members to transfer assignments not county recorders. How the hell are they going to fix 400 years of common law covering land records?

    • lvent says:

      Nope nobody knows who owns what.THAT IS THE PLAN…THE RULING ELITE WANT US TO OWN NOTHING BUT DEBT….PAY ETERNAL INTEREST AND NEVER OWN OUR HOMES…..They dumped all of the toxic crap into a global pool…this is a Hitler plan by the ruling elite to steal everything they can from the people and if they can’t steal our homes they want to turn us into a nation of renters….People who try for a loan mod are being thrown into default intentionally by the New World Order..The people need to wake up and realize that no one, not one person is safe…There have even been people who do not even have a mortgage thrown into fraudclosure…..A couple that had this happen to them was on Jon Stewart a few weeks ago….they never had a mortgage and BOFA fraudclosed on them…If you wanted to pay your home off tomorrow, they would not let you…The Jesuit New World Order “thinks” they are the TRUSTEE of everything, including all of us and want all of us to be peasants and own nothing of value…Have you seen the price of gold?…..They don’t really own anything..they just want all of us to “think” they do…..they stole all of their accumulated wealth from all of the nations and all of the people…….They are a huge ring of thieves..and counterfeiters….The Vatican holds all of the worlds gold that they have stolen in Swiss Banks is what I have heard..

  2. To Tell The Truth says:

    Banks said to balk at ‘robo-signing’ offer
    NEW YORK – Sept. 6, 2011 – U.S. banks are balking at an offer by state officials to limit their blame for alleged improper mortgage practices in return for a multibillion-dollar payment.

    Mortgage giants Bank of America Corp., J.P. Morgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. say the latest attorneys general proposal over so-called robo-signing and other sloppy mortgage practices is a “non-starter” because it does not release the banks from all future liability for past mortgage practices and mortgage-backed securities they sold to investors, people with direct knowledge of the discussions told the Financial Times.

    Robo-signing involves employees signing foreclosure documents en masse without reviewing them, as required by law. The documents are used to prove banks have a right to foreclose if a homeowner isn’t making mortgage payments.

    The banks alleged they were so overwhelmed with paperwork that they cut corners.

    The scandal led the five big lenders in negotiations with attorneys general to temporarily halt foreclosures nationwide last fall.

    The banks’ all-encompassing immunity demand comes as some attorneys general express concern the negotiations, involving a proposed total $20 billion to $25 billion penalty payment, already offer the banks far too broad a release from liability, the Financial Times said.

    The talks, which resume this week, include discussions about releasing the banks from legal liability for wrongful securitization practices.

    Securitization involves pooling unrelated residential and commercial mortgages, and sometimes adding pooled auto loans and credit-card debt, and selling the debt as bonds and other securities to investors. The practice produced billions of dollars of profits for banks but eventual investor losses in the tens of billions.

    The attorneys general of New York, Delaware, Massachusetts and Nevada are probing such securitization matters and have told the 46 other states in the talks they don’t agree with this part of the proposal, the newspaper said.

    They say the proposal seeks to resolve allegations that have not been fully investigated, the newspaper said.

    Other state officials counter that cleaning the slate with banks can heal the deteriorating housing market and secure fresh debt relief for distressed homeowners.

    Copyright © 2011 United Press International

  3. debi p says:

    This whole settlement thing is proposterous and should be viewed
    As illegal at any cost. Since when is FRAUD and not securitizing the loan
    And then forging millions of documents alright? Who the fuk is looking
    Out for the homeower who IS the investor under any definition?
    Florida is laiden with fraud deceit and theft. Since when is this
    Sunject to any settlement? Is this really america?? Or america– the
    Home of the banks?! So sick of all of this we need a whistle to stop
    The circus. Florida is ruined. Forever. When u have seen thousands for
    Fraudulent documents and no perfection none, when are these liars
    And thieves going to do some hard time. Its time. For Gods sake and ours!!
    Bless those still worthy and for the banks and the servicers and all
    The lyiing fuk lawyers, may the devil get his FULL dues
    With out a general ledger. Debi. 5613899339

    • Malco says:

      It’s time for vigilante justice Debi , I have thru the internet compiled a list of ALL of B of A’s Executive staff , home addresses , phone #’s , I really dont even care about my house anymore after 4 years of living hell , I will strip it and my friend has a 963 Cat track loader and I will drive it right thru the house and outbuildings , oh , the property itself ? My friend is a Class III firearms dealer ( full auto) , we have pumped 10000 + rounds into the property so good luck B of A , when the EPA gets done making YOU clean it up you will lose at least a half a million – and I will be playing Mad Max -Beyond Bankerdome at your houses banker bitches , how will it feel when I throw you out of your home ? your alarm system ? I used to install them and can circumvent the best , even the cellular back-up type , I already have the same type of jammer the gov. uses , amazing what you can buy online – I just dont give a fuck anymore

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