I don’t know what these people are complaining about. The 27 page “term sheet” is mostly made up of existing laws that the servicers are asked to adhere to with no “or else” clauses.
As for the monetary penalties, 20 or 30 billion is NOTHING compared to the TRILLIONS that they stole. How bout we apply the money to fund an army of legal aid attorneys to defend the “deadbeats” against these predators. If they have the legal ability to foreclose, and did everything THE WAY IT SHOULD HAVE BEEN DONE IN THE FIRST PLACE, then there shouldn’t be a problem getting the house repossessed, right?
But that may be to much to ask since they have already polluted our courts beyond belief…
Foreclosure Fraud Settlement: The Empire Strikes Back (or Why Are Republicans So Obsessed with Backdoor Cramdown?)
It’s not surprising to see the banks and their supporters on the Hill pushing back on the proposed Foreclosure Fraud settlement term sheet. (See here and here and here). There seem to be three major lines coming out of the banks:
(1) It’s “backdoor cramdown,” and the agencies shouldn’t be pursuing a policy rejected by Congress.
Thus, House Republicans wrote to Treasury Secretary Geithner that “The settlement agreement not only legislates new standards and practices for the servicing industry, it also resuscitates programs and policies [namely bankruptcy cramdown] that have not worked or that Congress has explicitly rejected.” These House Republicans want to know: “What specific legal authority grants federal and state regulators and agencies the power to require mortgage principal reductions when the House and Senate have voted down such proposals?” . Similarly a coterie of bank-friendly pundits chimed in calling this sub rosa cramdown.
(2) CFPB has no business being involved given that it doesn’t have a director.
This has to be read between the lines as a thinly veiled Elizabeth Warren witch hunt. At least one commentator was upfront about that in the American Banker.
(3) The settlement could negatively affect the safety and soundness of the banks.
Let me address all of these points. There’s a lot of willful confusion about this term sheet and what it is.
Check out his response here…
House Republican Letter below…