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AG sues ReconTrust for illegal foreclosures

AG sues ReconTrust for illegal foreclosures

(Housing and Lending) Permanent link

The Attorney General's Office is suing ReconTrust Company, a subsidiary of Bank of America, for conducting illegal foreclosures on thousands of Washington homeowners.

“ReconTrust ignored our warnings, repeatedly broke the law and refused to provide information requested during our investigation,” McKenna said during a news conference Friday. “ReconTrust’s illegal practices make it difficult, if not impossible, for borrowers who might have a shot at saving their homes to stop those foreclosures.”

ReconTrust is a foreclosure trustee that is legally required to act as a neutral party on behalf of both the lender and the borrower while conducting foreclosure proceedings in good faith and in accordance with the law.

Full details in our news release. And a couple of videos below.




Posted by Kristin Alexander All Consuming Blog Moderator at 08/08/2011 03:26:58 PM | 

Why are the state attorneys general willing to settle with the banks for an amount that won't even come close to helping the American Homeowner? Why is the settlment for $20 billion when losses from bank fraud, forgery, etc; are in the trillions? Why isn't anyone in jail? The one AG who seems unwilling to settle - Eric Schneiderman - has been removed from the settlement panel. Why?
And lastly - What is being done about the banks that continue their illegal practices of robo-signing (a fancy phrase meaning FORGERY)?
It's hard to have faith in any government official these days.
Posted by: Kathy McKinley ( Email ) at 9/16/2011 4:55 PM

There has been a lot in the news and in the blogosphere lately about these negotiations between the country’s largest mortgage loan servicers and a group of state attorneys general and a number of federal agencies. You may have read about a dispute between Eric Schneiderman, the New York Attorney General, and the other state attorneys general. Our Attorney General and staff are among the longtime leaders in the fight to protect consumers from unfair or deceptive lending practices. With that in mind, I hope you’ll let me give you our perspective on the negotiations and the potential settlement.

Beware the misrepresentations, distortions and outright falsehoods being circulated by those who don’t know the substance of the settlement negotiations. The truth is that the settlement is still being negotiated and any criticism of it at this point is rank speculation. Nevertheless, it is not too early to make a few observations as negotiations continue.

A settlement promises significant benefits for distressed homeowners. We estimate the final settlement amount will be in the tens of billions of dollars in total value – unless it is allowed to be indefinitely stopped by critics who insist on diverting our focus away from the needs of homeowners. Those harmed by the mortgage meltdown need relief now, not months or years down the road. Every day we delay, more homeowners face losing their homes to foreclosure.

A settlement promises new approaches to the problems. Principal reduction for “under- water” borrowers is very much on the table and will likely be part of any settlement. The settlement will also set new and stronger standards for loan servicing, including provisions that will ensure greater accuracy and greater responsiveness to borrowers.

A settlement will not give the banks “total immunity” or a “blanket” or broad release of matters not covered by the settlement. As is typical of all multistate settlements, the States will provide the servicers with a release appropriate to the relief they provide homeowners, including increased loss mitigation efforts and reformed systems to ensure that these servicing problems do not reoccur. Moreover, there will be no amnesty from criminal prosecution. This is a civil investigation not a criminal one. The states have never contemplated doing anything that would interfere with any criminal prosecution. While some state attorneys general have criminal jurisdiction, many are like Washington State, where the Attorney General does not have the authority under the law to bring criminal matters without a request by a prosecutor or the Governor. If you have concerns regarding criminal prosecutions, you should address those to criminal prosecutors such as the U.S. Attorney’s Office or local county prosecutors. But you should also understand that over a decade ago, Congress deregulated the financial services industry. That means there are a lot fewer rules to accuse bankers of violating.

A settlement will not interfere with the work of other state or federal agencies or of attorneys general who elect not to join the settlement nor will it waive any rights of individuals without their consent. The settling states may only release the claims of their own states. They cannot release the claims of states that do not choose to settle or the claims of individuals without their consent. If a state is unhappy with the settlement, they are not required to join it. The settlement will thus have no effect on that state or its citizens. New York Attorney General Eric Schneiderman has a unique statute, called the Martin Act, which gives him broad powers over the financial markets in New York that other attorneys general do not have. He does not need the blessing or assistance of other states to investigate securities violations or pursue his claims under New York law.

The attorneys generals involved in multistate negations with the banks maintain a laser-like focus on bringing as much help to distressed homeowners as soon as we can. Mr. Schneiderman and his allies are wrong to try to divert that focus. The interests of homeowners are not the same as those of the hedge funds and other Wall Street investors he seeks to include in our negotiations. Diverting our energy and losing precious time while investigating the securities industry will only delay relief to homeowners--and could blow up our whole effort.

Contrary to what some have alleged, this settlement will give us more, not less, leverage with the servicers to ensure that the home mortgage servicing industry serves the needs of America’s homeowners, and puts in place national servicing standards they will have to adhere to. We are at a critical juncture in our settlement talks. These negotiations are being handled by a savvy and experienced group of consumer protection professionals who have a long track record of bringing real relief to defrauded mortgage borrowers. If the states agree to a settlement, it will be because they believe the terms are in the best interests of America’s homeowners. Combining the claims of private institutional investors with the claims of investors puts homeowners’ interests on the back burner at a crucial time. We believe the settlement holds the prospect of significant and immediate relief to distressed homeowners, which is good for homeowners, good for the real estate marketplace and good for the economy.

In closing, we recognize that there is much conversation in the blogosphere and that emails from various interest groups are being circulated. However, what I’ve offered here is the view from one of the states actually leading the settlement talks. These remarks are based on factual information about the actual substance of the negotiations. Please take accusations from those not involved in the talks with a healthy dose of skepticism.
Posted by: Sarah Lane - Blog Moderator ( Email ) at 9/26/2011 3:49 PM

The AG's office should issue a moratorium itself on ALL pending foreclosures. All county records should be looked at for "proper" documentation and automatically checked for the signatures of suspected robo-signers which these banks have continued to engage in . This is an outright crime. It should not come down to the individual homeowner to take up in the courts. The AG knows these documents exist within the county records so they all need to be examined. Its bad enough most homeowners cant afford an attorney. Any settlement should go to the homeowners and the counties because the banks got out of recording fees which should have been paid off at the beginning of the loan. If found that the banks have fraudulent paperwork, then the homeowners should get clear title to their properties-Period. Government CANNOT cut a deal with the banks that lets the banks get away with a crime. They should be made to remedy the problem with the homeowners. If the government wont prosecute these bankers, then make them pay the homeowners in the form of giving them free and clear titles.
Posted by: Omar Norwood ( Email ) at 12/10/2011 12:39 PM

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