Banks Are Off the Hook Again
"Americans know that banks have mistreated borrowers in many ways in foreclosure cases. Among other things, they habitually filed false court documents. There were investigations. We’ve been waiting for federal and state regulators to crack down.
Prepare for a disappointment. As early as this week, federal bank regulators and the nation’s big banks are expected to close a deal that will be a wrist slap, at best. All homeowners will suffer as a result. Some 6.7 million homes have already been lost in the housing bust, and another 3.3 million will be lost through 2012. The plunge in home equity — $5.6 trillion so far — hits everyone because foreclosures are a drag on all house prices.
We know that robo-signing was not an isolated problem. Many other abuses are well documented: late fees that are so high that borrowers can’t catch up on late payments; conflicts of interest that lead banks to favor foreclosures over loan modifications. The deal does not call for tough new rules to end those abuses. Or for ramped-up loan modifications. Or for penalties for past violations. (If approved,) you can add foreclosure abuses to other bank outrages, like bailout-financed bonuses and taxpayer-subsidized profits."
---NY Times Editorial April 9, 2011
