So, the wires are alive with news that America’s model of banking integrity, Bank of America will pay some billions of dollars to settle claims that they were not exactly….ummm….model corporate citizens.
Well, yipee and pass the popcorn….right? Some victory for the victims in all this right? A little well-deserved justice and if not a pound of flesh, then at least a couple of ounces…..right?
WRONG.
Here we go all over again…..it’s deja vu. This is the second time this group of loans has cut a multi billion dollar check.
First, let’s just start with the proposition that banks are not in the business of being nice and they don’t just walk around cutting billion dollar checks unless they’re really stuck. Now I of course will repeat that oft-abused legal phrase, “the settlement is not an admission of liability”, but again they ain’t cutting any check because BofA felt like doing the right thing. The other thing is who knows really how much of this money might even make it to the investors on whose behalf the settlement was reached and how much of it will be siphoned away by attorney’s fees and other costs of the settlement.
But here’s what really makes me angry. I fight for individual consumers, many whom have Countrywide Loans and who are fighting Bank of America/Bank of New York Mellon/BAC Servicing. All of my consumers have fought like hell to get a settlement or a short sale or a deed in lieu out of the Bank Bandit, but have not been able. Many of our claims and defenses are very similar to those raised by the big shot investor groups, but the consumer is repeatedly told the claims do not matter or do not count. Courts don’t take into consideration the fact that Angelo Mozillo, the executive who headed up Countrywide was charged with a whole laundry list of improprieties, related to the very same allegations of wrongdoing, but he just skates away not serving any consequence at all…save a paltry fine.
And don’t forget most of the loans that we’re all talking about here were already part of one big settlement already. Remember a few years ago when attorneys general from all over the country got together to announce they caught Countrywide cheating, they nailed them and forced a quick and dirty settlement….the number was $8 billion. Read the press release here. And read the full lawsuit here: countrywide
But here’s the thing….how many consumers benefited from that prior agreement? How much principle was forgiven? How many loan terms were re-worked? Just for a goof, check on the Countrywide Settlement Site and have a look around. The point of all of this is the loans that make up these settlements are loans on individual American homes and Bank of America is still busy foreclosing on Americans who are infected with all these abusive loans.
As noted in the news reports, the terms of settlement may actually lead to faster foreclosures against these people, my clients, real Americans.
But here’s the real kicker in all of this….
The settlement is subject to court approval and covers 530 trusts with original principal balance of $424 billion.
Whaddya figure the “value” of these trusts are today? How much have they written down the loans that are in foreclosure or in default? Chew on that one for a while…..