We've heard a fair amount about attorneys general for most of the states - as well as the federal government - going after mortgage companies for the way they conducted themselves in the years leading up to the Great Recession. The authorities have been at it for nine months now and are pushing the companies for a settlement of $30 billion plus the companies swearing they will be good boys from now on. However, it looks as though the AGs don't have the detailed evidence they should have to make theirs a slam dunk settlement.
The investigators don't really know how many wrongful foreclosures have been attempted or the volume of fraudulent documents filed in courts or how many cases involve 'robo-signing'. Yes, the feds have inspected documents but not very many. For example, they've looked at .001 percent of those who received a foreclosure notice last year. At the five major banks they looked at only 200 loans at each bank; these banks hold over 50% of all home mortgages, valued at $5.7 trillion.
Sure the money is a big number, but the AGs really don't know how much that number should be. The banks have offered $5 billion, the AGs $30 billion. Given the limited knowledge the AGs now have, it seems to be quite risky to also absolve the banks of any future claims in these matters.
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