Foreclosure Settlement Shows 4.2 Million Borrowers Shafted in 2009-2010

The truth comes out on the mortgage fraud settlement.  The OCC announced the payout terms and for most people, they get less than $1,000 out of the deal.  Only in America can one be fraudulently foreclosed on, lose their home, have their credit ruined, only to be compensated less than $1,000 for the ordeal.

Mortgage Settlement Is Corruption Poster Child

housemazeIt's simply a failure of law. Barry Ritholtz wrote a admonishment of the Obama administration and state attorney generals for buying into the 50 state mortgage settlement pig in a poke:

We never want to see an innocent party “accidentally” evicted from a home. The legal system has evolved so this has become a “legal impossibility.” Imagine returning home from work or vacation to find the front door padlocked, the belongings strewn all over the block, a big orange sticker screaming “FORECLOSED” on the garage door, with an auction sign in the front lawn. Now imagine that this occurred even though you are not in default or even delinquent on payments. Thanks to the robosigning banks, this legal impossibility has happened repeatedly, even to homeowners who paid cash for their houses and had no mortgages. Imagine that — foreclosed with no mortgage.

Pretty incredible huh? It used to be no one could simply just take your home. Such a violation of personal and property rights was unheard of. Now the stories are so routine, the press barely covers them.

Bloomberg Law interviewed an on fire Ritholtz, who explains, in simple English, why this settlement is such a big deal. Literally the settlement throws out 1000 years of individual property rights, law and is a loss of personal freedom you really need to pay attention to.

Saturday Reads Around the Internets - It Pays to Do Your Homework

shocknews Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.


Whole Foods - Made in China

Spending $8 bucks a pound for organic grapes? Think again. This video report shows Grocery chain Whole Foods so called organic foods are actually imported from China. Check out what happens with organic inspection and certification when food is imported.

BoA & ForeclosureGate: They don't care because they don't have to


At the moment, things look bad for Bank of America but this too shall pass.

Yves Smith wrote a nice summary of the latest on ForeclosureGate . This includes just released information concerning HUD assistant regional inspector general William Nixon. Supposedly, he is after BofA for significantly hindering an investigation into wrongfully filed claims on failed mortgages, about $6 billion worth.

Smith reminds us that she saw the BofA purchase of Countrywide as a real loser. Her reference to a prescient column by Gretchen Morgenson from August 27, 2007 contains this gem:

Bankruptcy Hell - The Sequel to ForeclosureGate

Michael Collins
You're headed for bankruptcy court tomorrow. It's been a long and difficult road. You and your husband both worked. You made decent money. Then your husband became ill. There was no sick leave because he worked for himself. His disability insurance had a six-month delay and only covered half of the lost income. That was all you could afford. (Image Wikimedia Commons)

His condition was critical and required medication three times a day at a monthly cost of $2500. Your company plan covered your husband but it didn't cover the medication because the insurance company termed it experimental. It was the sole option for the crippling illness according to the three specialists consulted.

Your husband contributed 40% of the family income. The loss was a big hit but you persevered. You couldn't sell the house, even if you wanted to. It was $150,000 upside down. There was no federal or bank program to relieve that burden. After four months of cashing in a modest 401(k), it became obvious that you couldn't make it. You needed relief and time for your husband to get well.

You consulted your accountant. On his advice, you decided to file for bankruptcy.

Beyond ForeclosureGate - It Gets Uglier

Michael Collins

The ForeclosureGate scandal poses a threat to Wall Street, the big banks, and the political establishment. If the public ever gets a complete picture of the personal, financial, and legal assault on citizens at their most vulnerable, the outrage will be endless. (Image)

Foreclosure practices lift the veil on a broader set of interlocking efforts to exploit those hardest hit by the endless economic hard times, citizens who become financially desperate due medical conditions. A 2007 study found that medical expenses or income losses related to medical crises among bankruptcy filers or family members triggered 62% of bankruptcies. There is no underground conspiracy. The facts are in plain sight.