Wednesday, April 10, 2013

Mortgage Fraudsters Paying Pittances

Here's an outrageous news story you may not have heard about: the federal government has just settled the case of millions of homeowners who were foreclosed on unethically, inappropriately, and sometimes illegally.

Victims -- ranging from active-duty soldiers who should have been immune to proceedings to people who were "dual tracked" into both refinancing and foreclosure but who lost to foreclosure, and even including some people who were completely current on their mortgages (!) -- will receive somewhere between $125,000 and $500, depending on their circumstances. To compensate for the loss of their homes. Regardless of the value of the homes, or the trauma it caused, or the lack of legal standing to foreclose in the first place.

And -- get this -- the consultants who figured out how much to pay everyone were paid $250 an hour to do the work, which means they received upwards of $10,000 for each of those $500 payments. In total, the amount of money the consultants took home exceeds half the payment to the millions of victims.

At the core of this is a government institution that is completely in the pocket of the banks: the Office of the Comptroller of the Currency.

As briefly outlined by former New York governor and attorney general Elliot Spitzer in the linked clip, the OCC has been running interference for the banks and the mortgage industry for over a decade. They rushed this settlement to prevent the new Consumer Financial Protection Bureau from getting their teeth into the mortgage fraudsters.

The list of payouts for various types of wrongful foreclosures can be seen in full here.

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