Whistleblower Lawsuits Against Banks Extinguished in Foreclosure Fraud Settlement

Whistleblower Lawsuits Against Banks Extinguished in Foreclosure Fraud Settlement

I think my disgust over federal housing policy is just about complete. As you know, we’re still waiting for the actual terms of the foreclosure fraud settlement, more than one month after the announcement. But more information has dribbled out, not much of it to the good. Michael Hiltzik rounded up some of the more troubling issues. He mentions that OCC penalties will get folded into the settlement, basically charging $0 for their violations. The Federal Reserve did the same thing. He mentions the Ted Gayer study showing that only 500,000 borrowers will even be eligible for the principal reduction in the settlement, half of what HUD and other regulators promised. And he adds that the Treasury Department restored all HAMP incentive payments for servicers who failed to meet their obligations under the programs. As Hiltzik writes, “If the banks had shown as much forbearance toward their struggling borrowers as these three agencies have shown toward the banks, the foreclosure settlement wouldn’t have been necessary in the first place.”

But it gets worse. Remember those whistleblower lawsuits announced last week, alleged fraud in how Bank of America abused HAMP? iWatch News expanded on those reports, showing the different strategies BofA used to delay and deny loan modification claims for eligible borrowers:

The suit claims Bank of America:

Told borrowers and regulators that a complaint was “under review” while internally classifying the files as incomplete.

Parked cases with terminated or vacationing employees and sent payments to a “partial account” instead of crediting them to the loan, artificially inducing or prolonging a delinquent status.

Tried to persuade borrowers that did qualify for HAMP to take a proprietary loan that came with much less favorable terms, a violation of the bank’s agreement with the government when it took the bailout money.

And there was another whistleblower case, unsealed last month…

Rest here…



5 Responses to “Whistleblower Lawsuits Against Banks Extinguished in Foreclosure Fraud Settlement”
  1. To Tell The Truth says:

    I do not believe that this agreement stops anyone individual homeowner to follow due process to file their own complaint. We will see. I knew that they were waiting out the result of this agreement so they can continue with the same old, same old again. Is it true that BOA is sister bank to Deutsch?

    Now that the agreement is over the banks are showing their teeth again…my case that was dismissed over a year ago, well, Deutsch finally got a new attorney to pick up from Stern and Robo signer Jeffery assignment to file a new lawsuit this time with a ‘new’ copy of a note now endorsed by 2-3 parties…and claiming ownership of both note and mortgage. He is a brave attorney to attach the same robo signed doc and newly endorsed notes ( of course no dates on them) but they dont know what I know or have….anyway…here we go again back to the courts and I will surely keep you all informed should my case be able to help another. We share the knowledge.

  2. Ken Hansen says:

    This enrages me. This is beyond unfair. Whose country is this??!?! OCCUPY.

  3. talktotennessee says:

    Did anyone expect the banks to play FAIR???
    The iceberg that sank the Titanic was largely beneath the surface. This is why the settlement was so important. It was a sell out because lenders knew the banks had a lot under the surface.
    I assure you the banks are not modifying loans differently and that includes both Wells Fargo and Bank of America, nothing has changed. They are breaking the settlement terms by sending out modification offers that blatantly state they are continuing to foreclose if the foreclosure was in the works prior to the HAMP application and obviously that is almost all of them.
    Even the administration is spouting that only underwater mortages for those who are reliable and current are really being considered. Charge this up to Geithner and others who speak mainly for the financial industry and not the people.

    I am afraid we are toast unless we find another way because it looks like it is more of the same only anks are more immune to investors and homeowners. So what did we expect? Fairness from either party, from AGs from our own government, President, Congress? They are all cut from the same cloth frankly!
    We are squarely in a Plutocracy and have been for some time. The only difference is that NOW we know it and before we just had the wool pulled over our eyes by our own.

    Anyone got any new suggestions?

    • talktotennessee says:

      Actually, I would think the AGs could not bind the courts on a Whistleblower issue if the suits have already been filed. Wouldn’t you think they would be grandfathered in? Maybe some of our legal minds can enlighten here? Not sure individuals could be bound anyway unless laws are enacted binding the courts. The AGs certainly don’t speak for everyone in all situations, do they?

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