Banks say they are being unfairly penalized because Robo Signing is basically a victimless crime; the vast majority of the people being foreclosed upon have been delinquent on their mortgages for a significant period of time.
One of the arguments the administration is using with some success is that the foreclosure investigation has prevented banks from removing people from their homes who can’t pay their mortgages, and as a result, the banks can’t sell foreclosed property to people who can afford mortgage payments.
Banks, Obama Administration Pressure AGs on Fraudclosure Settlement
The Obama Administration has finally found something it can agree on with the nation’s big banks: The need for the 50 state attorneys general to finally reach a deal to end the year-long investigation into faulty mortgage foreclosure practices and reach a long-awaited settlement, the FOX Business Network has learned.
People at the big banks say the Obama Administration is prodding the state AGs, led by Iowa’s Tom Miller, to agree on a deal that is currently on the table that calls for fines and revised mortgage foreclosure practices — but also limits banks’ liability on legal action.
Banking executives say if there has been any progress made in reaching a deal in the near future — and there is wide disagreement among banks and regulators about how to define progress — it’s because the Obama Administration has begun to side with the big banks and not some of the state AGs who want far greater fines and the ability to sue banks in the future.
“This may be the only thing that we have agreed on with the administration on in a long time,” said one senior banking executive with direct knowledge of the discussions.
This executive said that banking officials are hoping that the Obama Administration’s Justice Department will continue to apply pressure on the state AGs to agree on a deal when the two sides meet this Thursday and Friday in Washington.
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