In this week's edition of ANH Legal Group Bankruptcy Blog, we will discuss the status of the global "settlement" that is being "negotiated" on behalf of the American consumer by the Attorney Generals of several states. As we all know, foreclosures are at and all time high with many more to come. As we all also know, the Banks have not been playing fair with the way they are foreclosing on homes, handling loan modifications, and have generally failed to abide by the foreclosure laws of various states.
This week we learned that the discussions on the Global "Settlement" with the Banks are not going well at all. After nearly a year of negotiations, it appears that the discussions will not yield a deal which is good news for the American consumer. As it stands, the banks have modified very few loans and have shifted their focus from loans to new sources of revenues i.e. FEES. In sum, this global "Settlement" would just allow these greedy banks to walk-away from all the harm they have caused!
The negotiations were jolted this week when the Attorney General of Massachusetts filed a lawsuit against Bank of America, JP-Morgan Chase, Citigroup, Wells Fargo and GMAC Mortgage to stop the "unfair and deceptive business practices" of these banks in their foreclosure processes. Coakley is seeking damages for borrowers who were hurt by these banks foreclosure practices, which range from filing fraudulent legal paperwork to the use of so-called "robo-signers" and refusing to follow lending laws.
"Whether those institutions believe they are too big too fail, they certainly have demonstrated they believe they are too big to care about the impact of their actions. We believe they are not too big to have to obey the law," Coakley said.
Overall, many had believed the banks would have reached this overarching "settlement" with all the states, rather than see it go to litigation. The banks are self-servingly arguing if there is an out-of-court settlement soon, it would be better for homeowners than lengthy litigation. The "settlement" would include, presumably, some sort of immediate compensation to homeowners across the country but in reality this settlement would be pennies on the dollar!