David Dayen | Foreclosure Fraud Settlement Docs (I): Ally’s Side Deal
Foreclosure Fraud Settlement Docs (I): Ally’s Side Deal
I spent last night reading most of the foreclosure fraud settlement documents that were filed in federal court in DC yesterday. I’m going to lay out my findings in a series of posts. Let’s take a look at the penalties being paid to the states.
There’s a discrepancy between the numbers initially contemplated to be delivered to the states and the eventual numbers in the settlement documents. Simply put, all of the numbers in the settlement documents are slightly lower. For example, the spreadsheet showing very specific settlement numbers released on February 9 shows that Alabama would receive $26,474,753. In reality, in the settlement documents, Alabama will receive $25,305,692. New Jersey’s haul from the February 9 spreadsheet? $75,520,276. Their actual total? $72,110,727. The reductions range from $100,000 (in the case of Wyoming) to $20 million (in the case of California). I didn’t do a full tally of the total reduction, but my back-of-the-envelope guess would be over $100 million.
What accounts for this? Probably this little nugget buried in a Reuters article on the settlement:
Some banks negotiated separate requirements.
Ally Financial, for example, negotiated a steep discount on the fine part of its settlement, based on an inability to pay it, according to people familiar with the matter.