Tuesday, March 29, 2011
Why we need Elizabeth Warren and the CFPB
As she organizes the bureau, setting up its rules and procedures, she also had her people put together a presentation on the Great Mortgage Fraud for the 50 Attorneys General working on that investigation.
The nation's five largest mortgage firms have saved more than $20 billion since the housing crisis began in 2007 by taking shortcuts in processing troubled borrowers' home loans, according to a confidential presentation prepared for state attorneys general by the nascent consumer bureau inside the Treasury Department.This action by the CFPB will no doubt infuriate the Republican/Teabaggers and cause them to double down on their efforts to destroy anything of value in government. Pity we don't have a president who can fight back.
That estimate suggests large banks have reaped tremendous benefits from under-serving distressed homeowners, a complaint frequent enough among borrowers that federal regulators have begun to acknowledge the industry's fundamental shortcomings.
The dollar figure also provides a basis for regulators' internal discussions regarding how best to penalize Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial in a settlement of wide-ranging allegations of wrongful and occasionally illegal foreclosures. People involved in the talks say some regulators want to levy a $5 billion penalty on the five firms, while others seek as much as $30 billion, with most of the money going toward reducing troubled homeowners' mortgage payments and lowering loan balances for underwater borrowers, those who owe more on their home than it's worth.
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