Mortgage Settlement Talks Appear like Tobacco II

Stop me if you’ve heard it before: the politically ambitious state attorneys general purpose unpopular industry lawsuits on the basis of creative legal theories that will be a difficult time in court. Their explicit legal force from the other side brings to the table. The talks grind on. Finally, the big deal is struck, that the industry buys some extent the immune system and sends the money sluicing areas that will help AG in his political career.

It’s like a big village of tobacco declined, and it looks like the mortgage settlement is headed the same direction. In both cases, the AG is sufficient for behavior that looks bad and may technically violate the law, but it is difficult to relate directly to the consumer injury.

Of course, the evil tobacco executives lauded the useful properties of smoking, but at the same time, the high country doctor has told consumers of cigarettes killed. In the government required labels on all packages. Thus, the tobacco executives were a lie cause of smoking-related injuries and deaths? Alternatively, smokers have something to do with it? In any case, it was difficult for government lawyers to the case that smoking costs the state money, after accounting for taxes on cigarettes and the fact that smokers tend to die quickly and the young, reducing health care, social security and pension payments.

It is difficult, even ghoulish argument to make. And it will, arguing that the signing of plunder and other practices in the mortgage industry does not really hurt anyone. But where evidence to the contrary?

Take the December lawsuit Attorney General Catherine Cortez Nevada Masto against the lender processing services, DOCX and other documents, training firms. In Nevada AG “, the foreclosure crisis was caused by two major problems. Chaos and speed,” There’s no mention of the main reason: Borrowers do not pay their mortgages. Though the trial throw around words such as “kickbacks” and “forging scheme,” it is especially lacking evidence of a homeowner’s recovery suffered while on their current payments.

Instead, the complaint refers to “confidential witnesses” who have signed thousands of documents per day, with no “personal knowledge” of their accuracy. What would that “personal knowledge” is? The computer record shows the mortgage was in default. Computerized mortgage industry for a long time, and “personal knowledge” within the mortgage machine institutional syndication. Lawyers, notaries and registrars around the case may cling to the fact that a knowledgeable person, preferably a lawyer, to bless each document in foreclosure. But where is the evidence that the computers were wrong, and a huge number of foreclosures have been filed on mortgage loans have not been by default?

How did they do with tobacco companies, the attempt to build a case of hypertension, citing that the loan processor said, rather than specific actions that are detrimental to consumers. The case of Nevada makes a lot of applications in the SEC LPS suggesting that it is not falsify documents or do other bad things – to lay the foundation for the barrage of securities fraud lawsuits, when he agrees to a settlement that perhaps it was (there are two already). He is also accused of violating LPS Nevada consumer protection laws, without giving any of its clients – banks and investors – who complains about being cheated. Instead, consumer fraud is vague, a derivative of this. Consumers are not told that the penalty will be charged processors lawyers filing them $ 125 fee for access to their computer database, which is Nevada calls “kickbacks,” but LPS is characterized as “administrative fee”.

With all these confidential witnesses and tens of thousands of illegal purchase, why can not lead the state of a single case of foreclosure, which was done by mistake?

Attorney General Chris Koster of Missouri raised the stakes yesterday accused DOCX on 136 counts of fraud, as well as founder and former president of the Lorraine Brown, for the same violations of the documents. The criminal case said someone in the 68 DOCX signed notarized release of the case under the name “Linda Green” and illegally filed them with the “Boone County Recorder affairs, as if they were genuine.”

News reports indicate the last iteration of the national mortgage settlement will include a major reduction for people who paid for their homes than they are now worth $ 2,000 and paying for people who have stopped paying for their homes and were excluded from them. The big banks, of course, are desperately trying to complete this transaction and receive absolution legal AG are in a unique position to provide.

But I think the economic premise behind all of this litigation. First, where thousands of homeowners who were forced to abandon their homes, they made payments? There must be at least a few cited in this trial. Second, most fraud schemes, at least, is designed to make money on the scam, whether or not they succeed. But the banks lose money on foreclosures and for services that they mean the end of the stream of monthly payments. Who makes money on this massive fraud?

Like tobacco, hypertension attack tragedy with many causes by going after the least popular actors in the drama. This is a good theater, but it’s hard to figure out how to beat refineries will prevent home prices from finding their natural base. This will only happen when the economy recovers, and the new wave of buyers bet on the house now occupied by people who can not afford what they agreed to buy at the peak of the bubble.

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