The Federal government is about to settle the ForeclosureGate affair, according to a report in the New York Times on April 9. The Times noted that twelve million homes will be lost by 2012. Home equity values are down by $5.6 trillion since the real estate crash.
The draft agreement released to American Banker shows another corporate-friendly deal designed to maintain the incumbent perpetrators at the expense of the people. (Image: zoonabar)
The proposed settlement culminates an effort by federal prosecutors to address strongly supported allegations of widespread mortgage fraud perpetrated on as many as sixty percent of current mortgage holders. Homeowners were sold mortgages, serviced for the loans, and, in some cases, subjected to foreclosure and eviction based on fictional contracts and collections practices that violate the most basic principles of contract law and specific federal code pertaining to fraudulent debt collection.
When Wall Street got massive bailouts in 2008, the ultimate rationale was, pass the bailouts or face a complete financial collapse. We are already hearing hints of a similar deep rationale in the ForeclosureGate affair. '
The proposed settlement will not move the evicted back to their homes. It will not establish a moratorium on foreclosures, running at over a million per year. There will be no cram downs forcing the banks to absorb part or all of inflated housing prices caused by a real estate bubblethat the banks and Federal Reserve Board helped create. In addition, be assured that the settlement will not hold bankruptcy courts accountable nor the attorneys for their failure to spot obvious errors in bankruptcy proceedings, errors that would have invalidated many creditor claims.
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