Suffering an Unfair Job Loss is Tough, our california employment attorneys can help.

Federal Deals With Banks Could Undercut Robo Signing Settlement Talks With States

April 7, 2011

Our Riverside County foreclosure defense attorneys have written here before about the ongoing attempts by state attorneys general to understand and penalize robo-signing. This created a scandal when it was originally uncovered because of the risk of wrongful foreclosures, and because every robo-signed affidavit is perjury, which could have imperiled thousands of foreclosures on procedural grounds. In addition to responses in individual courts, attorneys general from all 50 states banded together last fall to investigate the practice and determine what penalties may be appropriate. Now, Bloomberg News reported April 6, a proposed settlement may be imperiled by deals the banks under investigation have quietly made with federal regulators.

The settlement proposal from the attorneys general was somewhat controversial, with seven AGs arguing that fines and a principal reduction proposal were too extreme. That settlement was pending when banks apparently got in touch with federal agencies including the Office of the Comptroller of the Currency, the Federal Reserve, the FDIC and the Office of Thrift Supervision. They signed deals with at least one of 14 mortgage servicers this week, agreeing to communicate better with lenders and create internal controls. No further details were reported, but the penalties are unlikely to be as extensive as the tens of millions in fines, principal reductions and other proposals by the AGs. A spokesperson for Iowa's Tom Miller, the leader of the group, said the deals won't affect their own efforts. However, analysts told Bloomberg that the servicers may use federal agreements to undermine the states' negotiations.

As Yorba Linda foreclosure defense lawyers, we suspect that was the goal of the federal deals. The article notes that OCC in particular has been "aggressive" in its position that federal laws preempt state laws. Banks, of course, prefer to face as few financial penalties and regulations as possible, despite openly acknowledging that they have broken the law. As the article notes, they may argue that federal law preempts state law, or that they are already demonstrating good faith, as a way to wiggle out of penalties proposed by the AGs. That would leave consumers right back where they started: vulnerable to lenders who break the law because no one is truly holding them accountable, at least outside individual court cases.

At Howard Law PC, we believe mortgage servicers and lenders need more accountability under the law -- not less. That's why we represent homeowners who are suing lenders to protect their homes from preventable or even wrongful foreclosures. In a non-judicial foreclosure state like California, foreclosures don't typically get judged by any independent third party before the home is taken away. And as frustrated homeowners know very well, the foreclosure process at major banks is filled with errors, omissions, miscommunications and incompetent behavior by lenders. Our Lawndale foreclosure defense attorneys hold them accountable for those lapses and others with lawsuits, whenever necessary to prevent an imminent foreclosure or protect our clients' rights.

If your home is in danger of foreclosure and you're willing to fight to hold on to it, you should call Howard Law right away. For a free, confidential case evaluation, send us a message online or call 1-800-872-5925 today.