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U. S. Officials Disagree On Penalties For Mortgage Mess

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http://www.nytimes.com/2011/03/03/business/03mortgage.html?_r=1&ref=business

Even as state attorneys general and regulators in Washington approach the end of their investigation into abuses by the nation’s biggest mortgage companies, deep disputes are emerging over how much to punish the banks as well as exactly who should benefit from a settlement.

The newly created Consumer Financial Protection Bureau is pushing for $20 billion or more in penalties, backed up by the attorneys general and the Federal Deposit Insurance Corporation.

But other regulators, including the Office of the Comptroller of the Currency, which oversees national banks, and the Federal Reserve, do not favor such a large fine, contending a small number of people were the victims of flawed foreclosure procedures.

As the negotiations grind on, there are signs that the banks still have not come to grips with the problems plaguing the foreclosure process. These problems burst into view last fall with accounts of so-called robo-signers processing thousands of foreclosures at a time without the required legal safeguards. The resulting furor prompted the attorneys general and other government officials to step in. Some banks suspended foreclosures to review their processes before resuming.

On Monday, though, HSBC disclosed that it had suspended foreclosures after regulators found “deficiencies” in its handling of them. These included problems with court affidavits, notarization, mortgage documentation and oversight of law firms, a spokesman for the lender, which is based in London, said. HSBC declined to say how many homeowners were affected.

“The events of the fall really uncovered and provided a degree of focus on fundamental problems in the way banks service and foreclose on mortgages,” said Paul Leonard of the Center for Responsible Lending. “Regulators have a great opportunity to come up with some serious fixes.”

Assuming, that is, they can agree. As difficult as it is to decide on a figure for any broad settlement, the question of what to do with the money could ultimately prove more vexing.

If only victims of problems at the servicers are helped in a settlement, that would cover a small portion of homeowners who are in default and even fewer of those whose homes are valued at less than they owe.

All the regulators declined to comment publicly on just how close they are to wrapping up a global settlement that would be presented to the banks. But signs of the differences have emerged in public testimony as well as in private conversations with government officials.

Uncle Ben sticking up for the banks again. A nice $20bn fine should help the banks capital requirements, also it will undoubtedly be a tax write off, meaning less taxes..... It's a marvellous can of worms, although what ever fine is agreed upon I bet the consumer doesn't get any. And if a fine is agreed will the civil lawsuits follow, costing even more?

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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