WASHINGTON — The nation’s five largest mortgage lenders have agreed to overhaul their industry after deceptive foreclosure practices drove homeowners out of their homes, government officials said Monday.
A draft settlement between the banks and U.S. states has been sent to state officials for review.
Those who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from the settlement, which could be as high as $25 billion. About 750,000 Americans —about half of the households who might be eligible for assistance under the deal — will likely receive checks for about $1,800.
But the agreement could reshape long-standing mortgage lending guidelines and make it easier for those at risk of foreclosure to restructure their loans. And roughly 1 million homeowners could see the size of their mortgage reduced.
Five major banks — Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial — and U.S. state attorneys general could adopt the agreement within weeks, according to two officials briefed on the discussions. They spoke on condition of anonymity because they are not authorized to discuss the agreement publicly.
The settlement would be the biggest of a single industry since the 1998 multistate tobacco deal. And it would end a painful chapter that grew out of the 2008 financial crisis.
Nearly 8 million Americans have faced foreclosure since the housing bubble burst. In some cases, companies that process mortgages failed to verify the information on foreclosure documents. The worst practices, known collectively as “robo-signing,” included employees signing documents they hadn’t read or using fake signatures to sign off on foreclosures.
President Barack Obama is expected to tout the settlement in his State of the Union address Tuesday. His administration has put pressure on state officials to wrap up a deal more than a year in the making.
Canadian man gets 18 years for credit fraud
FARGO, N.D. — A Canadian man accused of masterminding one of the largest high-tech bank robberies in U.S. history was sentenced to nearly 18 years in prison Monday following a years-long investigation into fake debt collection agencies that prosecutors say stole the identities of about 38,000 people.
Adekunle Adetiloye was accused of organizing a scheme to open nearly 600 fraudulent bank accounts and bilk 22 major banks, potentially costing credit card firms and banks up to $5 million. Assistant U.S. Attorney Nick Chase in North Dakota, where the case was handled, said the 40-year-old had an “insatiable hunger for other people’s money.”
Defense attorneys had argued that their client, the only person charged in the case, was a “marginal and minimal participant” whose role was to handle mail and withdraw money from ATMs. But prosecutors and the judge believed he was central to the scheme.
Investigators said Adetiloye incorporated two different companies in Delaware — Syspac Financial Services and Commet Consultant Inc. — that claimed to be debt collection companies. He gained access to commercial data providers, including large-scale outfits LexisNexis and ChoicePoint that only allow access to law enforcement, financial services and debt collection companies.
With access to those data providers, Adetiloye and others obtained the personal identification information to about 38,000 people, most of whom were medical professionals, and used that information to open credit card, debit and checking accounts, prosecutors said.
Those data providers said it was only the second such breach of that scale.
Jailed NY fraudster admits plot to kill witness
NEW YORK — The convicted mastermind of a $100 million mortgage fraud scheme admitted Monday to plotting the death of a key witness in his trial while behind bars, with an undercover investigator posing as a hit man.
Former AFG Financial Group Inc. President Aaron Hand pleaded guilty to conspiracy to commit murder. Prosecutors had said he gave the phony contract killer money to buy a gun, issued detailed instructions — including how to make the murder look like a gang attack — and agreed to pay $2,000.
“I wish I was there to … watch him suffer,” Hand told the investigator in a recorded conversation at the prison, according to prosecutors.
He was already serving 8 1/3 to 25 years in prison and is facing an additional sentence of 8 to 16 years to run consecutively when he is sentenced Feb. 6. He had faced 25 to life if convicted on the more serious charge of attempted murder.
His attorney told the New York Post the deal was a “more appropriate” way to resolve the situation.
Where are the criminal indictments? Where are the Prosecutions? Where are the perpwalks? Where are the prison sentences?
The devastating impacts of the Bush administration continue to haunt us. The rolled back regulations. the placement of industry insiders in regulatory posts as well as stocking the courts with anti-consumer judges have all resulted in an environment permissive of looting the people. The underlying problems with mortgage banking continue on, almost entirely unabated. The single legislation intended to prevent future consumer abuses, the Dodd-Frank financial reform law, has been watered down by lobbyists and strongly decried by conservatives. Key appointments have been blocked. the people are still exposed to nearly the same risks as they were before the crash.
There is another real estate market crash poised to strike. The amount of overhang, homes that are seriously delinquent but not yet foreclosed upon, is devastatingly large. For every home that has short-sold or been foreclosed upon, there is another that is pending action. This some three years after the meltdown and six years after the housing boom ended. There is more pain to come for homeowners and the equity they have. Due to no fault of their own, they have been sacrificed for the temporary and clearly unsustainable gains of a few. Banks are moving slowly in foreclsoure to prevent loss of their collateral valuation which is tied to their very solvency. Do not be deceived by the somewhat positive housing data in the last few months. this is all misleading once you scratch the surface.
This issue I have heard will be a subject for the State of the Union tonight. I can foresee more pro-banker action in our future. The extraction of the peoples wealth continues on.
Remember the Ownership Society speech by Bush? This was the prelude to a plot to destroy the middle class homeowner to enrich those who specialize in financial chicanery. For those keeping score, we have already seen $5 trillion transferred from the people to the banksters in this heist. Watch closely because there is more to come. Fully, one third of our national debt is directly attributable to making sure that unscrupulous bankers do not lose when they gamble. Feeling strapped? This is the tumor on our “free market” economy that will not permit full recovery until it is excised.