Settlements/ Servicers

Posted by kevin on March 9, 2015 under Foreclosure Blog | Comments are off for this article

Over the last few years, the major players including Bank of America, Citigroup, Goldman Sachs, JPMC, Morgan Stanley and Wells Fargo, have agreed to over $63 billion to settle cases involving mortgages or mortgaged backed securities. Just last week, the courts gave final approval to BOA’s settlement of claims related to Countrywide. The price tag was $8.5 billion. Two major cases are up for final approval in the next month- JP Morgan Chase and Wells Fargo.

I heard Bill Maher ravage Chris Christie because he settled a supposed $8.9 billion claim against Exxon Mobil for $225 MM. But, isn’t that settlement comparable to the settlements that DOJ has gotten against the major banks for taking down the economy. The $25 billion dollar settlement dealt with claims in excess of a trillion dollars. Moreover, the details of those settlements often indicate that the payments or credits to be made by the banks was illusory. In NJ, the vast majority of mortgage modifications or forgiveness was on second loans that were completely underwater. So, the banksters “forgave” loans that they had long written off, and got credit toward the settlement 100 cents on the dollar.

Sorry for the rant.

Although many publications say that mortgage foreclosure litigation is winding down, and that it is getting progressively more difficult to get a down the middle ruling, the next battlefield is going to be in the area of mortgage servicing. TILA (Truth in Lending) and RESPA (Real Estate Settlement Procedures Act) and the 2014 regulations administered by the CFPB open the door a bit to smack servicer violations. Figure that door is open as long as the Democrats control the White House. I suspect that federal district court judges will not be happy with the prospect of these cases, but the regs do provide a private right of action with attorneys fees.

We’ll see.