Banks Admit Fault in Politically Motivated Settlement That Retains Individual Rights to Action
Newport Beach, CA (PRWEB) February 21, 2012
“The settlement numbers can’t hide the fact that the problems of hundreds of thousands of homeowners have not been addressed. This is an attempt by the Banks to escape judgment for the problems they caused while giving politicians an opportunity to act like they are helping homeowners,” said Vito Torchia, Jr. “We disagree that the outcome gives California a fair deal commensurate with the harm done here and will continue to help individual homeowners facing wrongful foreclosures. Now that the banks have admitted their fault in court, there will be new opportunities for consumers with expert legal help to protect their rights.”
According to media coverage, the nation's three largest mortgage servicers — Bank of America, JPMorgan Chase and Wells Fargo & Co. — committed last week to subsidize a $12 billion fund to address principal write-downs, including through short sales, in California over the next three years, the single largest such commitment to come out of the negotiations with state attorneys general over the role of those lenders in the foreclosure crisis.
"By signing on for political reasons, the state of California acted against the interests of homeowners by waiving many claims it could have brought against the banks on behalf of victimized homeowners, including widespread unfair or deceptive business practices and general consumer protection statutes that applied to wrongdoing in the loan modification and foreclosure process,” said Vito Torchia, Jr. “With expert legal counsel, those claims can still be pursued by individuals.”
According to media reports, the settlement doesn't include about 60% of the state's homeowners whose loans are owned by government-controlled mortgage giants Fannie Mae and Freddie Mac. California's mortgage market currently accounts for about 13% of total U.S. loans serviced and 20% of loans by dollar size. The settlement covers only homeowners whose mortgages are owned by the banks in the deal or are serviced by them on behalf of private investors so will impact only about 250,000 Californians. Iowa Atty. Gen. Tom Miller, who led negotiations for the state attorneys general, noted that they were amazed by “how much of a problem there was in California.”
“California is by far the most important mortgage lending state in the country, and so is the most important foreclosure state, so as we have predicted, the banks now get to go back to business of aggressively processing foreclosures,” said Vito Torchia, Jr.
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